Financial Crime World

Title: Denmark’s Battle Against Money Laundering and Terrorist Financing: A Work in Progress

Subtitle: A FATF evaluation finds Denmark has the right foundations but needs to improve implementation and coordination

Evaluation Results

Copenhagen, Denmark – The Financial Action Task Force (FATF) has published a new evaluation report on Denmark’s efforts to combat money laundering and terrorist financing. Though Denmark was found to have the necessary foundations, there is a need for improvement in key areas.

Strong Foundations

The evaluation highlights Denmark’s strong regulatory framework, effective financial intelligence unit, and robust anti-money laundering and counter-terrorist financing (AML/CTF) supervisory mechanism.

Areas for Improvement

However, the report also underlines Denmark’s need to strengthen its risk assessment processes, national policy coordination, and implementation of AML/CTF measures.

Risk Assessment

Denmark’s risk assessment approach lacked sufficient granularity in some sectors, particularly the real estate and art markets. Effective measures are required to address identified risks in these sectors.

Response from Denmark

In response to the FATF recommendations, the Danish government has announced a package of measures aimed at improving the country’s AML/CTF regime.

Proposed Measures

  1. Strengthening the risk assessment framework: A dedicated risk assessment unit is to be established within the Ministry of Justice to coordinate efforts across agencies and improve the granularity of risk assessments.

  2. Enhancing national policy coordination: A national AML/CTF governance framework will be established, to be chaired by the Minister of Justice, with the goal of improving information sharing and communication between agencies.

  3. Implementing targeted measures: Enhanced supervisory practices and targeted measures in identified sectors, such as real estate and art markets, are planned.

Ongoing Commitment

The report acknowledged that despite the identified areas for improvement, Denmark remains a well-positioned jurisdiction in the global fight against financial crime. The country has implemented nearly all previous FATF recommendations and is taking the new recommendations seriously.

Previous EU Evaluation

The evaluation follows a similar exercise conducted by the European Union (EU) in 2021, which also emphasized the need for further improvements in Denmark’s AML/CTF regime.

Denmark’s Focus

Denmark has committed to addressing the issues raised by both the FATF and the EU to maintain its position as a leader in the global fight against financial crime.