Denmark’s AML/CFT Efforts Fall Short of Expectations

Lack of Coordination and Inadequate Statistics Hinders Denmark’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Efforts

A recent assessment by international experts has revealed that Denmark’s efforts to combat money laundering (ML) and terrorist financing (TF) have been hampered by a lack of coordination, inadequate statistics, and methodological deficiencies.

Coordinated Approach Lacking

The report found that Denmark’s ML National Risk Assessment (NRA) was not conducted in a coordinated manner across government agencies, resulting in limited relevance and utility for the private sector. Moreover, the country lacks comprehensive statistics on the effectiveness and efficiency of its AML systems, which has negatively impacted the NRA.

Inadequate Laws and Regulations

Denmark’s laws and regulations also fall short in addressing ML and TF. The country criminalizes ML through a handling of stolen goods offence, but this does not cover self-laundering. Moreover, the maximum penalty for ordinary ML is considered insufficiently dissuasive, and the average penalties imposed are low, often resulting in suspended imprisonment.

Positive Developments

On a more positive note, Denmark has made efforts to recover the proceeds of crime through its Asset Recovery Office (ARO), which has achieved some significant successes in recent years. However, recoveries remain modest, and the use of tax powers to recover criminal proceeds has yet to yield significant results.

Recommendations for Improvement

To improve its AML/CFT efforts, Denmark must address these deficiencies and develop a more comprehensive approach to combating ML and TF. This includes:

• Developing a national AML/CFT strategy and coordinated policies
• Improving statistics on the effectiveness and efficiency of AML systems
• Enhancing coordination among government agencies and with the private sector
• Strengthening laws and regulations to address ML and TF
• Prioritizing CFT policies and activities
• Increasing penalties for ML offenses

Conclusion

While Denmark has a robust legal framework for investigating and prosecuting TF, its effectiveness is limited by inadequate statistics and coordination among authorities. To improve its AML/CFT efforts, Denmark must take concrete steps to address these deficiencies and develop a more comprehensive approach to combating ML and TF.