Denmark Fails to Prioritize Anti-Money Laundering Efforts, Report Finds

Copenhagen - A new report by an international organization has raised concerns about Denmark’s efforts to combat money laundering and terrorist financing. According to the report, the Danish Business Authority (DBA) and the Financial Intelligence Unit (FIU) have not prioritized anti-money laundering policies and activities in response to identified risks.

Lack of Prioritization

The report found that neither the Money Laundering Reporting Authority (MLRA) nor the Terrorist Financing Reporting Authority (TFRA) provides an adequate basis for justifying exemptions or applying enhanced or simplified measures. The FIU, responsible for analyzing and disseminating financial intelligence to law enforcement agencies, has limited resources and prioritizes its analysis based on ongoing investigations of predicate offenses rather than identifying new money laundering cases.

Concerns about Human Resources

The report also highlighted concerns about the diminishing human resources of the FIU and the impact this has on the quality of analysis conducted. Additionally, there are concerns regarding the operational autonomy of the FIU.

Deficiencies in Legal Framework

Denmark’s criminal code does not cover self-laundering, and the country’s authorities were unable to provide statistics that differentiate between investigations, prosecutions, and convictions related to money laundering and traditional handling of stolen goods offenses.

Asset Recovery and Terrorist Financing

The report noted that Denmark’s legal framework for freezing, seizing, and confiscation measures is sound, but in practice, recoveries are modest, with only 20% of confiscated amounts being recovered. The country’s Asset Recovery Office has had some significant successes in recent years, but the use of tax powers to recover criminal proceeds has not yet achieved significant results.

Regarding terrorist financing, Denmark has a robust legal framework and has investigated and prosecuted several cases, resulting in convictions. However, the report noted that the maximum penalty for terrorist financing is ten years’ imprisonment, but in practice, more lenient sanctions are often applied, limiting their dissuasiveness.

Recommendations

The report’s findings have raised concerns about Denmark’s efforts to combat money laundering and terrorist financing, and its recommendations aim to improve the country’s anti-money laundering and counter-terrorism financing measures.

• Improve the prioritization of anti-money laundering policies and activities
• Enhance the resources and operational autonomy of the FIU
• Strengthen the legal framework for asset recovery and confiscation
• Increase penalties for money laundering and terrorist financing offenses
• Implement effective tax powers to recover criminal proceeds