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Denmark: Tough Stance on Money Laundering, Terrorism Financing and Fraud

Copenhagen, Denmark - In an effort to combat money laundering, terrorism financing, and fraud, Denmark has implemented strict legislation with severe penalties for those found guilty. The country’s laws do not provide for a de minimis threshold, meaning that even occasional transactions without a business relationship can trigger customer due diligence.

Penalties for Money Laundering, Terrorism Financing and Fraud

The penalties for money laundering, terrorism financing, and fraud in Denmark are severe, with fines and imprisonment ranging from several months to eight years. The government has proposed increasing the fines in response to the current political climate.

• Fines and imprisonment ranging from several months to eight years
• Government proposes increasing fines in response to the current political climate

“Fit and Proper” Assessment of Financial Undertaking Managers

Denmark’s “fit and proper” assessment of financial undertaking managers will now take into account breaches of anti-money laundering legislation, making it more challenging for individuals to manage financial institutions.

Plea Agreements Not Possible

Unlike some other countries, plea agreements are not possible under Danish law. This means that defendants accused of money laundering, terrorism financing, or fraud must go through the full legal process.

Defences Available

While there are no specific defences available in Denmark for these crimes, all general defences - including self-defence - can be used by defendants.

Record Keeping and Disclosure Requirements

Companies and individuals subject to anti-money laundering, terrorism financing, and fraud legislation must keep records for at least five years after the relevant incident. They must also report suspicious transactions to the Financial Intelligence Unit and maintain documentation to support their claims.

• Keep records for at least five years after the relevant incident
• Report suspicious transactions to the Financial Intelligence Unit
• Maintain documentation to support claims

Compliance Measures Required

Financial institutions are required to have internal compliance measures in place, including a risk-based approach to preventing money laundering and terrorism financing. Public authorities can conduct physical inspections or desk reviews to ensure compliance.

Customer Due Diligence

All undertakings must conduct customer due diligence to identify and verify customers or business partners and their beneficial owners. Enhanced or reduced due diligence may be required depending on the level of risk associated with a particular transaction.

• Identify and verify customers or business partners and their beneficial owners
• Conduct enhanced or reduced due diligence based on the level of risk

Private Enforcement

While there are no specific provisions for private enforcement in Denmark’s anti-money laundering legislation, private actions can still be brought under general Danish law. The court will decide on the level of damages to be awarded, and successful claimants may also receive other remedies such as injunctive relief or restitution.

Conclusion

Denmark’s tough stance on money laundering, terrorism financing, and fraud demonstrates its commitment to combating these serious crimes. The country’s strict legislation and severe penalties serve as a deterrent to those who would engage in illegal activities, while also providing protection for victims of these crimes.