According to the prosecutor, the crimes could not be corroborated.
Three men were arrested in February of this year on suspicions of sending funds to Somalia to support terrorism.
Investigators believed the activity started in 2006 and continued up until the time of the men’s arrest.
Two of the men were subsequently remanded in custody, while the third suspect was released.
The two remaining suspects were later released in June after spending more than three months in jail pending the filing of formal charges.
Following their release, however, the two were banned from leaving Sweden as the prosecutor continued to investigate the case.
In his decision to finally shutter the investigation, Jacobsson writes that filing charges would have required him to prove beyond a reasonable doubt that the men had sent the money with the intention of financing terror.
“The investigation has not able to show to a sufficiently high degree to whom or what in Somalia and for what purpose the money was sent,” wrote Jacobsson in a statement.
The prosecutor stressed that the men are no free of all suspicions.
“They should be regarded as innocent following this decision, they are of no interest to us at all,” said Jacobsson to the TT news agency.
At the same time, he explained that there were great difficulties in finding evidence to support the suspicions.
“There are lots of things that need to fall into place. I have to prove clear intent when it comes to collecting and sending the money, that it will be used for terror attacks. Then we need to follow the money all the way from Sweden to whoever may actually carry out a terrorist attack. There are challenges in both of these paths,” he said.
One problem with the money train is that the transactions can only be followed through to a certain point, after which the traditional, informal money handling system takes over, with bookkeeping methods which are less accessible for Swedish investigators.
“We were able to follow the money to Dubai, but then we couldn’t go any further because there isn’t a functioning bank system. We don’t have the ability to get much help from the United Arab Emirates, as there is no treaty on judicial cooperation,” said Jacobsson.
“I’ve made several attempts to interview people down there, both regarding the money and other matters which I don’t want to go into, but I haven’t succeeded.”