KYC legal requirements for accounting firms: how to comply

Many accounting firms struggle to interpret and meet the legal requirements for customer due diligence. Anti-money laundering regulations are extensive, and failing to comply can lead to severe penalties. Yet KYC (Know Your Customer) efforts often consume an unreasonable amount of time and resources, and there's widespread uncertainty about what is actually required.

Customer due diligence – truly knowing your customer – is a cornerstone of Sweden’s Anti-Money Laundering Act (Penningtvättslagen). Still, the industry wrestles with questions like: When do we need to perform checks? What information must we collect? And how do we stay up-to-date with changes in the regulations? In this article, we clarify what the law demands, common misconceptions, and how your firm can ensure compliance in an efficient way.

What does the law require?

Swedish anti-money laundering law sets clear customer due diligence (CDD) obligations for all covered businesses. According to the Penningtvättslagen (Sweden’s AML Act), accounting consultants and similar firms must take KYC measures in several scenarios. This requirement applies primarily when you start a business relationship with a new client or handle large one-off transactions.

KYC requirements mean you must verify your client’s identity and understand the purpose of the business relationship. This includes checking whether the client or their beneficial owners are politically exposed persons (PEPs) or appear on sanctions lists. You should also assess the client’s risk level to determine if enhanced due diligence measures are necessary. For example, the law calls for stricter controls for clients with a high-risk profile.

A common misconception is that due diligence is only needed for new clients, but the law also requires ongoing monitoring. You must continuously update client information and react if something seems off. Another pitfall is assuming small transactions are exempt – if multiple smaller deposits are connected and together exceed 15,000 EUR, the due diligence requirements kick in as well. Finally, any suspicion of money laundering must be reported to the Swedish Financial Intelligence Unit (Finanspolisen), regardless of the amounts involved.

Swedish authorities like Länsstyrelsen (the County Administrative Board, which supervises accounting firms) emphasize the importance of a risk-based approach. Strong KYC procedures and continuous monitoring of client relationships are highlighted as critical measures to prevent money laundering.

Best practices to meet the requirements

So how can your firm live up to these requirements in practice? Here are some concrete tips and best practices to ensure compliance:

• Conduct an overall risk assessment of your business to understand where the money laundering risks lie, and update this assessment regularly.

• Establish clear KYC policies and procedures. Document how you identify clients, verify identities (e.g. using BankID or other e-ID), and determine the purpose of client relationships.

• Know your customers: Identify and verify all new clients and their beneficial owners. Gather the necessary information before you start doing business together.

• Apply a risk-based approach. Devote more resources to clients assessed as high risk (e.g. complex ownership structures, international clients, or PEPs), and streamline the process for low-risk clients where appropriate.

• Continuously monitor the business relationship. Set up routines to regularly screen clients against PEP and sanctions lists, and to update clients’ information as needed.

• Train your staff. Ensure everyone on your team understands the AML law, can recognize red flags for suspicious activity, and knows how to report any suspicions.

Automating customer due diligence with Qapla

Despite your best efforts, manual KYC work can be time-consuming and prone to error. This is where modern technology comes in. With a platform like Qapla, many of these processes can be automated, saving time and reducing the risk of mistakes. Qapla is designed to meet current regulatory requirements and is tailored to Swedish AML rules – perfect for accounting firms that want to stay one step ahead.

By digitizing the due diligence process, compliance becomes easier. For example, you can integrate BankID (Sweden’s electronic ID) for quick and secure identity verification, and let Qapla automatically check clients against PEP and sanctions registers in real time. Risk assessments are generated and updated without manual intervention, and all documentation is stored centrally for audits and oversight. In addition, Qapla facilitates a smooth transition from older KYC systems or manual workflows – you can get up and running quickly with minimal disruption.

In summary, customer due diligence and legal requirements don’t have to be a burden. With the right tools, it becomes a natural part of your firm’s routine. Interested in seeing how Qapla can help you meet KYC requirements in a smarter way? Book a demo with us today and let us show you how Qapla simplifies your compliance work.