Financial Crime World

Title: Faroe Islands and Greenland Granted Derogation from EU Anti-Money Laundering Laws

Background

On 25th January 2012, the European Commission granted a derogation to Denmark allowing transfers of funds between Denmark, the Faroe Islands, and Greenland to be treated as domestic transfers, in compliance with EU anti-money laundering regulations.

Reasons for the Decision

The European Commission’s Implementing Decision (EU) 2012/43, outlines the reasons for the decision. Denmark made the application for the derogation in December 2006, and since then, transfers of funds between Denmark and both Greenland and the Faroe Islands have been provisionally treated as transfers within Denmark.

Criteria for the Derogation

The European Commission considered the necessary information and found that Greenland and the Faroe Islands met the criteria set out in Article 17(1) of Regulation (EC) No 1781/2006:

  1. They form part of Denmark’s currency area.
  2. Their payment services providers participate in Danish payment and settlement systems.
  3. They have adopted regulations corresponding to those of Regulation (EC) No 1781/2006.
  4. They have issued appropriate anti-money laundering legislation.
  5. They have legislation in place to impose financial penalties on entities or individuals listed by the United Nations or the European Union.

Compliance with EU Data Protection Laws

The agreements between Denmark and Greenland, as well as Denmark and the Faroe Islands, will need to ensure compliance with Directive 95/46/EC of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data.

Opinion of the Committee on the Prevention of Money Laundering and Terrorist Financing

The Commission’s decision is in accordance with the opinion of the Committee on the Prevention of Money Laundering and Terrorist Financing.

Conclusion

This derogation means that transfers of funds between Denmark, the Faroe Islands, and Greenland will no longer be subjected to the same reporting requirements as those involving countries outside the European Economic Area.