Financial Crime World

Title: Denmark’s Finance Sector Faces Scrutiny: Money Laundering Crackdown and the Role of Authorities

Denmark’s Financial Sector Under Scrutiny

The Danish banking sector has faced increased scrutiny in recent years, with a growing focus on the fight against money laundering and white-collar crimes. To fortify Denmark’s financial system and ensure compliance with the law, various government entities are taking a more active role in enforcing money laundering regulations.

Agencies Responsible for Enforcing Money Laundering Laws in Denmark

  • The Financial Supervisory Authority (FSA): While Danish anti-money laundering (AML) legislation primarily governs criminal offenses under Danish jurisdiction, the FSA has been granted the power to fine non-compliant financial institutions under section 78a of the Act on Money Laundering.

Prosecution of Money Laundering Cases

  • Danish Police: Money laundering investigations and prosecutions are carried out by the Danish police, specifically the Money Laundering Secretariat of the State Prosecutor for Serious Economic and International Crime.
  • Individuals and Corporations: Both natural and legal persons can be prosecuted for money laundering under section 1 of the Act on Money Laundering.

Defining Money Laundering

Under Danish law, money laundering is defined as:

  • Unlawfully receiving or obtaining profits from criminal activities (section 3 of the Act on Money Laundering).
  • Concealing, storing, transporting, or assisting in the disposal of such proceeds and associated economic benefits.
  • Breaching Act on Money Laundering requirements by financial institutions.

Assets and Transactions

There are no restrictions on the types of assets or transactions that can form the basis of a money laundering offense under the Danish Act on Money Laundering.

Predicate Offenses

Predicate offenses refer to the underlying criminal activities linked to money laundering. These can be any violation of the Danish Criminal Code or any special legislation, committed both locally and internationally.

Defenses and Sanctions

  • No Explicit Defenses: Danish law does not provide explicit defenses for defendants facing money laundering charges.
  • Mitigating Circumstances: Some circumstances may be considered mitigating and could potentially reduce the severity of penalties.

Forfeiture, Disgorgement, and Compensation

There is no specific Danish legislation regarding asset freezing, forfeiture, disgorgement, or victim compensation related to money laundering. However, under general Danish criminal law, seized assets can be claimed by victims if they have suffered losses.

Limitation Periods

  • Five-Year Limit: The limitation period for bringing actions under the Danish Act on Money Laundering is typically five years (section 78(5)).
  • Longer Limitation Periods: Crimes involving false money, risk assessment, management, and know-your-customer procedures, and the duty of notification have a ten-year limitation period.

Extraterritorial Reach

The Danish Act on Money Laundering primarily applies to Danish entities but does have some extraterritorial effect.

  • Foreign Companies: Foreign companies with branches and local agents operating in Denmark are required to comply with specific provisions within the Act.
  • Groups of Foreign Companies: Groups of foreign companies with Danish establishments must implement appropriate policies and procedures to comply with the Act on Money Laundering.