Financial Crime World

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Denmark’s Financial Supervisory Authority Issues Revised AML Guidelines for Small Businesses

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The Danish Financial Supervisory Authority (Danish FSA) has issued revised Anti-Money Laundering (AML) guidelines under the Danish Act no. 380 on Measures to Prevent Money Laundering and Financing of Terrorism of April 2, 2020. The new guidelines aim to strengthen preventive measures against money laundering and financial crime.

Key Changes in the Revised AML Guidelines

  • Enhanced customer due diligence procedures
  • Reporting obligations to companies’ board of directors
  • Adjustments regarding obtaining and verifying identity information on beneficial owners
  • Guidance on AML requirements for Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs)

AISP Requirements

  • AISPs are not subject to the same AML requirements as other payment service providers due to their limited involvement in the payment chain and lack of customer funds.
  • Most European countries have explicitly excluded AISPs from national AML requirements.

PISP Requirements

  • PISPs are subject to the AML Act and must consider establishing a customer relationship with customers.
  • Guidelines emphasize that PISPs should carry out a risk assessment of the customer relationship, taking into account geographical factors, business models, and other risk factors.

Danish FSA’s Approach vs. Other European Countries

  • The Danish FSA’s guidance on AISP and PISP AML requirements is seen as pragmatic, considering the limited ML/TF risk associated with these providers.
  • However, it differs from the approach taken by some European countries, including the UK, Italy, and the Netherlands, which have explicitly included AISPs in their national AML requirements.

Importance of Compliance for Small Businesses

  • The revised AML guidelines are an important step towards strengthening Denmark’s fight against money laundering and financial crime.
  • Small businesses operating in Denmark should take note of these changes and ensure they comply with the new guidelines to avoid potential legal and reputational risks.