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Crime Prevention Strategies for Financial Institutions in Denmark

Denmark’s reputation as a financial hub has been tarnished by recent high-profile money laundering incidents, with suspicious transactions amounting to €200 billion flowing through some of the eastern European branches of a Danish bank. The scandal led to criminal charges, prosecutions, and financial penalties of over $2 billion.

In response, Danish authorities are placing a greater focus on anti-money laundering (AML) compliance, requiring firms operating in Denmark to understand how to meet their AML and counter-terrorism financing (CFT) obligations. Given the prospect of significant fines and reputational damage, it is essential for financial institutions to take a closer look at Denmark’s AML landscape and how they can approach regulatory compliance.

Finanstilsynet: Denmark’s Financial Regulator

Finanstilsynet, Denmark’s financial regulator, was established in 1988 to provide financial stability and confidence in financial undertakings. As the country’s national regulator, it is responsible for supervising banks and financial institutions, including insurance companies, pension funds, investment funds, and securities brokers.

Ensures compliance with Denmark’s AML/CFT regulations
Sets out rules and best practices
Assists in developing new legislation
Issues guidance and best practice information

Denmark’s AML Regulations

The main article of AML legislation in Denmark is the Act on Preventive Measures Against Money Laundering and the Financing of Terrorism, also known as the Money Laundering Act. The act requires financial institutions to develop and implement a risk-based AML/CFT compliance solution, including:

Customer due diligence (CDD)
Screening measures

Firms must also appoint an AML Officer responsible for overseeing their organization’s compliance solution.

Recent AML Initiatives

Denmark’s government has announced a nationwide crackdown on money laundering, releasing a 5-pillar AML/CFT strategy that will run until 2025. The strategy focuses on areas of high AML risk, including:

High-value goods
Money transfer companies
Cryptocurrencies
The gambling industry

As part of the strategy, the Danish police has established a new unit dedicated to tackling money laundering.

Complying with Denmark’s AML Regulations

To comply with Denmark’s AML regulations, firms must implement risk-based AML/CFT solutions that reflect the level of criminal risk they face. An effective solution should include:

Customer due diligence
Transaction screening
Sanctions and watchlists
Adverse media screening

The Importance of Screening Technology

Ripjar’s Labyrinth Screening platform is designed to help firms meet their compliance obligations in crowded and complex regulatory environments. Powered by cutting-edge AI and machine learning software, Labyrinth enables global customer screening and delivers accurate, actionable data in real-time.