Overview and Current Trends

Sweden’s international sanctions framework is undergoing its most significant change in decades. The international sanctions applicable in Sweden are principally those adopted by the European Union, including measures implementing sanctions adopted by the United Nations Security Council.

The International Sanctions Act (SFS 2025:327), which entered into force in June 2025, introduced a broader and more stringent criminal law framework for sanctions violations. This was followed in July 2026 by the establishment on a permanent footing of the Sanctions Co-ordination Council, bringing together the principal Swedish authorities involved in sanctions implementation and enforcement.

These developments reflect a broader shift in Sweden’s approach to international sanctions: from a regime centred primarily on self-driven compliance to one with a more pronounced enforcement orientation. For Swedish businesses, international sanctions are consequently becoming a question of criminal exposure, corporate governance and transaction risk.

The Legal Framework: Broader Criminal Enforcement

The International Sanctions Act

The International Sanctions Act (SFS 2025:327) entered into force in June 2025 and is the core legislation governing international sanctions under Swedish law. It sets out which sanctions apply in Sweden, and provides for their criminal law enforcement.

More specifically, the provisions of the Act are structured as blanket offences. Criminal liability arises from breaches of prohibitions, obligations or restrictions adopted by the European Union under the Common Foreign and Security Policy or the United Nations Security Council; see Restrictions of Practical Importance below for more detail.

Importantly, Swedish sanctions legislation is primarily prohibition-based. It designates conduct as prohibited or restricted, but does not prescribe specific control measures that individuals and businesses must proactively perform in order to be compliant. There are therefore no statutory requirements under Swedish law to conduct sanctions screening, perform sanctions-specific due diligence or maintain particular policies, procedures or internal controls, although such controls are often justified as a practical approach to ensuring compliance; see Governance and Compliance Gain Importance below for more detail.

European Union sanctions

International sanctions within the European Union are normally introduced through a decision under the Common Foreign and Security Policy; where European Union-level implementation is required, they are given effect through directly applicable Council regulations. Measures requiring action by individual member states, such as certain arms embargoes or admission restrictions, are implemented nationally. The substantive restrictions applicable to Swedish businesses are therefore determined principally at European Union level.

United Nations sanctions

United Nations Security Council sanctions bind Sweden under international law but do not create obligations directly enforceable under Swedish law. They are normally implemented through European Union regulations. Pending European Union implementation of certain United Nations asset freezing designations, the Swedish Financial Supervisory Authority must adopt corresponding interim measures under the International Sanctions Act.

Personal scope

Criminal liability under the International Sanctions Act attaches to natural persons, while legal persons may be subject to corporate fines where an offence is committed in their business; see Materially Strengthened Enforcement Regime below for more detail.

Territorial scope

The territorial scope of the applicable international sanctions is separate from the scope of Swedish criminal law jurisdiction.

As Sweden does not maintain an autonomous national sanctions regime, the territorial scope of the international sanctions obligations applicable in Sweden is determined by the relevant European Union regulation. Sanctions adopted by the European Union typically apply:

• within the European Union;
• to member state nationals, wherever located;
• to entities incorporated under member state law, wherever they operate; and
• to business conducted wholly or partly within the European Union.

A company incorporated under Swedish law therefore remains subject to European Union international sanctions in respect of its activities inside and outside the European Union, including activities conducted through a foreign branch. Swedish nationals are likewise bound by the relevant prohibitions while abroad.

Subsidiaries of Swedish parent companies domiciled outside of Sweden are not – solely by having a Swedish parent – automatically subject to European Union international sanctions. However, the Swedish parent remains subject to its international sanctions obligations under Swedish law, including applicable anti-circumvention prohibitions forming part of European Union sanctions applicable in Sweden. In addition, certain European Union sanctions explicitly require European Union persons and entities to undertake their best efforts to avoid any participation by their subsidiaries in activities that undermine the relevant sanctions.

Where international sanctions adopted by the United Nations Security Council are implemented through European Union regulations (as is normally the case), their territorial scope in practice corresponds with that of other sanctions resolved by the European Union.

The territorial scope must be distinguished from the jurisdiction of Swedish courts over an alleged international sanctions offence. Swedish criminal jurisdiction is governed by the Swedish Penal Code (SFS 1962:700). An offence is regarded as having been committed in Sweden where:

• the relevant act occurred in Sweden;
• a legally required act should have been performed in Sweden; or
• if a particular effect is an element of the offence, that effect occurred or was intended to occur in Sweden.

In certain circumstances, Swedish courts may have jurisdiction over international sanctions offences committed abroad. For offences under the International Sanctions Act, Swedish jurisdiction is not conditional on the conduct also being criminal in the country where it occurred.

Foreign sanctions and competing legal obligations

Sanctions adopted by other states are not binding as such under Swedish law. United States and United Kingdom sanctions may nevertheless be relevant to Swedish businesses because of their corporate structures, contracts, financing or other jurisdictional connections. Compliance with such measures must be distinguished from compliance with sanctions applicable under Swedish law.

One relevant consideration is that compliance with international sanctions applicable under European Union or Swedish law may provide a lawful basis for processing personal data, whereas obligations arising solely under foreign law may not. This may limit the circumstances in which a Swedish business may screen individuals against foreign sanctions lists.

Another relevant consideration is that Regulation (EU) 2271/96 – commonly referred to as the Blocking Regulation – prohibits Swedish legal persons from complying, directly or indirectly, with requirements or prohibitions arising from certain extraterritorial United States laws listed in its Annex.

Importantly, this does not prohibit the consideration of, or compliance with, United States international sanctions generally. A Swedish legal person must therefore determine whether a decision to refuse, suspend or terminate a transaction or business relationship is based on directly applicable United States law, on genuine and independent commercial considerations or solely on an attempt to comply with an extraterritorial United States measure covered by the Blocking Regulation. In the latter case, compliance is prohibited unless authorised by the European Commission.

Interaction with adjacent regulatory regimes

Swedish law differentiates between international sanctions and adjacent but independent regulatory regimes.

One example is the export control regime. Legislation on export controls applies independently from that on international sanctions, and imposes separate requirements concerning classification, licensing, end use and end users. In practice, this means that the same transfer may be subject to both export control requirements and international sanctions requirements. An export control licence does not over-ride a prohibition under an international sanctions regime, and an authorisation or exemption under an international sanctions regime does not dispense with any separate export control licence.

Another example is the anti-money laundering and counter-terrorist financing regime. Legislation in this area applies independently from that on international sanctions, and imposes separate requirements concerning risk assessments, customer due diligence, ongoing monitoring and suspicious transaction reporting. In practice, this means that the same customer relationship or transaction may be subject to both anti-money laundering requirements and international sanctions requirements. Compliance with anti-money laundering obligations does not over-ride a prohibition under an international sanctions regime, and compliance with international sanctions obligations does not dispense with any separate anti-money laundering or counter-terrorist financing requirement.

Fragmented Responsibilities But Closer Co-Ordination

Sweden has no central sanctions authority; responsibility is divided among several authorities according to the relevant measure. For example:

• the National Board of Trade handles many trade, services, financial restriction and derogation matters;
• the Inspectorate of Strategic Products is responsible for military equipment and dual-use items;
• the Swedish Financial Supervisory Authority performs certain reporting, authorisation, freezing and supervisory functions; and
• Swedish Customs enforces import and export restrictions at the border.

Suspected sanctions offences are investigated by the competent law enforcement authority – principally the Swedish Police Authority or Swedish Customs, with the Swedish Security Service involved in matters falling within its national security remit.

This fragmentation has been identified as a weakness in the Swedish enforcement framework. To improve co-ordination, the Sanctions Co-ordination Council, led by the Swedish Police Authority, was placed on a permanent footing in July 2026. It does not replace the participating authorities nor create a single point of contact, and businesses must still identify the competent authority for each specific application, notification or inquiry.

Restrictions of Practical Importance

Common structure of European Union sanctions regimes

As Sweden principally applies sanctions adopted through European Union regulations, the substantive restrictions are set out in the regulation governing the relevant sanctions regime. Their precise scope varies, but the recurring measures include asset freezes, prohibitions on making assets available, restrictions on trade and services, and prohibitions on circumvention; see The Legal Framework: Broader Criminal Enforcement above for more detail.

Asset freeze – screening and indirect exposure

International sanctions commonly require all funds and economic resources owned, held or controlled by a listed person or entity to be frozen. They also prohibit funds or economic resources from being made available, directly or indirectly, to or for the benefit of a listed person. These obligations apply to all Swedish operators, not only regulated financial institutions.

International sanctions may therefore prohibit more than direct payments to listed persons. Transactions involving employees, creditors, service providers, relatives or intermediaries may also be prohibited where they release value to, discharge an obligation of or otherwise benefit a listed person.

Consequently, international sanctions screening cannot be limited to the immediate counterparty. Businesses must also consider whether an unlisted counterparty is owned or controlled by a listed person.

Ownership will generally exist where a listed person holds at least 50% of the proprietary rights or a majority interest. Holdings of several listed persons may need to be aggregated.

Control is a separate, substance-over-form assessment. Relevant considerations include the ability to appoint or remove a majority of the governing body, control voting rights, exercise dominant influence or otherwise direct the entity’s affairs. Where ownership or control exists, making assets available to the entity will generally be treated as indirectly making them available to the listed person.

Systematic sanctions screening has traditionally been less common among Swedish businesses operating primarily in the domestic market, particularly outside the regulated financial sector. This is changing, and more Swedish businesses are introducing counterparty screening. The appropriate level of screening and due diligence depends on the company’s risk profile, including its ownership structures, payment flows and exposure to foreign jurisdictions; see Governance and Compliance Gain Importance below for more detail.

Sectoral and trade restrictions – a reality for Swedish businesses

International sanctions may also restrict, inter alia, imports, exports, financing, investment and the provision of professional services to specified counterparties, sectors or whole jurisdictions.

These measures remain highly relevant to Sweden’s export-oriented industrial and technology sectors. For many Swedish businesses, the sanctions against Russia represented their first significant exposure to broad sectoral restrictions affecting a geographically proximate market. Although sectoral measures were introduced in 2014, their expansion following Russia’s full-scale invasion of Ukraine in 2022 brought sanctions compliance into the day-to-day operations of a much wider range of Swedish industrial, technology, financial and professional services businesses.

Circumvention – a potential enforcement priority

Participation in arrangements intended to circumvent international sanctions is prohibited under international sanctions regimes. Circumvention may include:

• routing goods, payments or services through intermediaries or third countries;
• concealing the identity or ownership of the ultimate counterparty;
• providing false end user or destination information; or
• restructuring a transaction so that a listed person retains control or receives the economic benefit.

Swedish authorities have specifically highlighted the diversion of Swedish-origin industrial products and technology through third countries to actors connected with the Russian military industrial sector. Higher risk products and supply chains may therefore require enhanced counterparty, end use and transaction due diligence.

Circumvention is likely to remain a central Swedish enforcement priority. Further investigations and prosecutions can be expected as the authorities increase their focus on indirect exports, procurement networks and the use of third-country intermediaries; see Materially Strengthened Enforcement Regime below for more detail.

Governance and Compliance Gain Importance

Compliance is mandatory, internal measures voluntary

Swedish sanctions law is prohibition-based rather than process-prescriptive. Businesses must comply with the applicable restrictions, but are not generally required to maintain specific screening, due diligence or internal control arrangements. Unless such requirements arise under sector-specific regulation, the choice of compliance measures is therefore formally voluntary.

This distinction is becoming less significant in practice. The broader criminal law framework introduced in 2025 has increased the importance of businesses being able to identify and address international sanctions risks.

The board of directors is ultimately responsible

The board of directors is ultimately responsible for ensuring that the company conducts its business in accordance with the applicable laws and regulations, including international sanctions. The board should therefore ensure that responsibilities are allocated and that proportionate procedures and controls are in place in this area.

Documented compliance arrangements may be relevant both when assessing whether an individual acted with gross negligence and when determining whether the company took the measures that could reasonably have been required to prevent an offence. Appropriate controls may therefore reduce both the risk of a violation and the resulting exposure to individual criminal liability and corporate fines; see Materially Strengthened Enforcement Regime below for more detail.

Compliance framework – developing market practice

Structured sanctions compliance frameworks cannot yet be regarded as standard practice across all segments of the Swedish market. It is nevertheless becoming more common, particularly among established businesses, exporters and companies with international operations or supply chains.

Developing best practice, which has been codified by the European Banking Authority’s non-mandatory guidelines applicable as of 30 December 2025, includes a documented risk assessment, clear allocation of responsibilities, and practical controls tailored to the company’s operations and sanctions exposure.

The risk assessment should identify where sanctions violations may arise in light of the company’s operations, markets, products, customers, suppliers, payment flows, distribution channels and corporate structure. Higher risk arrangements should receive particular attention, including those involving distributors, agents, freight forwarders and foreign subsidiaries. The assessment should be updated following material changes to the business or its sanctions exposure.

Responsibility for sanctions compliance should be clearly allocated between management and relevant operational functions. Internal procedures should specify when transactions may be approved, escalated, suspended or rejected, and training should be directed at functions exposed to sanctions risk, including sales, procurement, finance and logistics.

Screening, due diligence and other control measures should be proportionate to the company’s sanctions exposure, and may extend beyond the direct counterparty to owners, controlling persons, intermediaries, banks, consignees and end users. Higher risk transactions may require verification of ownership records, product classifications, end use information, shipping documents, payment flows and commercial rationale. Businesses with complex supply chains should also consider re-export restrictions, downstream obligations, information and audit rights, ongoing monitoring and termination provisions, without relying on contractual assurances where other circumstances indicate a risk of diversion or circumvention.

Materially Strengthened Enforcement Regime

Individual liability

Individual liability for sanctions violations is criminal in nature under Swedish law. Liability therefore requires that the offence was committed intentionally or through gross negligence; ordinary negligence is insufficient.

The International Sanctions Act establishes the following offences.

• Minor sanctions offence: a fine or imprisonment for up to six months. Prosecution may be brought only where justified in the public interest.
• Sanctions offence: imprisonment for up to three years. Liability may arise where the offence is committed intentionally or through gross negligence.
• Aggravated sanctions offence: imprisonment for two to six years. This requires intent and may apply where the offence concerns property of very significant value, military equipment or dual-use items, or is otherwise particularly dangerous.
• Repeated sanctions offence: imprisonment for two to six years where two or more connected intentional offences together concern property of very significant value.

Attempts to commit a sanctions offence, minor sanctions offence or aggravated sanctions offence are also punishable. The general Swedish rules on participation apply, meaning that a person who induces or facilitates an offence may be liable for incitement or aiding and abetting.

Criminal liability attaches to natural persons and depends on the individual’s own acts, omissions or participation rather than their formal position. A director, officer or employee is therefore not liable merely because of their role. Gross negligence does not require an intention to violate sanctions, but represents a substantial departure from the required standard of care. Relevant considerations may include the person’s responsibilities, authority, knowledge and response to identified risks. Proceeding despite clear warning signs or failing to carry out elementary checks may support a finding of gross negligence, depending on the circumstances.

Corporate liability

Legal persons cannot themselves be convicted of criminal offences under Swedish law. A company may nevertheless be subject to a corporate fine where an offence has been committed in its business and:

• the company failed to take the measures that could reasonably have been required to prevent the offence; or
• the offence was committed by a person in a senior position or with particular responsibility for supervision or control.

A corporate fine may be imposed even if no individual has been convicted, provided that the underlying offence and the conditions for corporate liability are established.

The corporate fine is based on a sanction value of between SEK5,000 and SEK10 million. For larger companies, a sanction value of at least SEK500,000 may be increased by reference to the company’s financial position, resulting in a maximum fine of SEK500 million. Remedial measures and voluntary reporting may justify a reduction. Property connected with the offence may also be confiscated.

Limited case law

As the International Sanctions Act only entered into force in June 2025, there is not yet an established body of published case law interpreting its provisions. However, investigations announced during 2026, including cases involving persons in senior corporate functions, indicate that sanctions enforcement is becoming more active. Published judgments and further guidance on gross negligence, corporate preventative measures and the classification of aggravated offences can therefore be expected as these cases progress.

Sanctions Move Into Transactions and Disputes

The expansion of the sanctions against Russia and the introduction of the International Sanctions Act have made sanctions a more prominent feature of Swedish transaction practice. Recent criminal investigations involving persons in senior corporate functions have further increased awareness that sanctions exposure may result in personal liability, corporate fines and intrusive investigations.

In Swedish mergers and acquisitions, the focus has expanded from straightforward list screening to the target’s historical and indirect exposure. Relevant areas include:

• exports;
• payment flows;
• distributors;
• end users;
• foreign subsidiaries;
• ownership structures; and
• restricted contracts.

In a share acquisition, historical exposure remains with the target after completion. Identified risks may be addressed through warranties, covenants, conditions precedent, indemnities or purchase price protection, while incomplete information may justify enhanced pre-completion review or post-completion remediation.

Financing and payment arrangements increasingly require separate analysis. A transaction may be lawful in principle but impossible to complete through the proposed banks, currencies or payment routes because a bank applies stricter internal policies, requires further ownership information or is unwilling to assume the relevant risk. Transaction documents may therefore need to address restrictions affecting lenders, account banks, sources of funds and payment intermediaries. A contractual payment obligation does not authorise a prohibited transfer, and an authorisation covering one element of a transaction does not necessarily extend to related financing, fees or payments.

Sanctions clauses have accordingly become more common in Swedish commercial agreements. Under Swedish law, sanctions do not automatically terminate or suspend an agreement, nor exclude liability for non-performance. The consequences depend on the applicable restriction, the contractual terms and general principles of Swedish contract law. Clauses may address suspension, termination, alternative performance, notice and prolonged prevention of performance. They should also distinguish between legally binding sanctions and internal policies or foreign sanctions that do not apply under Swedish law.

Disputes may arise over contractual performance, payment obligations and the enforcement of judgments or arbitral awards. Certain sanctions regimes contain no-claims provisions restricting claims by designated or specified parties where performance has been affected by sanctions. Even where the parties’ underlying contractual rights have been determined, payment, transfer of assets or enforcement may remain prohibited. The existence of a contractual right must therefore be distinguished from whether that right can lawfully be exercised or enforced.