Financial Crime World

Title: Denmark’s Money Laundering Threat: A New National Risk Assessment

Danmark’s Økonomiske Kriminalitetsenhed (OKEN) - Denmark’s National Financial Crime Agency

Denmark’s Money Laundering Threat: An Overview of the 2018 National Risk Assessment

The Danish State Prosecutor for Serious Economic and International Crime has published an updated National Risk Assessment for money laundering in Denmark [1]. This assessment outlines risk areas, trends in profit-driven crime, and potential vulnerabilities in the Danish financial system.

Background

Money laundering harms trust in financial institutions and the economy at large. As criminals employ increasingly sophisticated methods, it is crucial for regulatory bodies to adapt to these changes and maintain an informed stance. The National Risk Assessment serves the purpose of identifying the most vulnerable areas, enabling more effective prevention and combating of money laundering.

Key Risk Areas

The assessment highlights significant risk areas for money laundering in Denmark:

  1. Money Remittance Providers and Alternative Remitters: Organized criminals utilize these providers to transfer funds acquired through illicit activities [2]. Small providers are particularly vulnerable due to the challenges in complying with anti-money laundering regulations and the lack of resources for monitoring and investigation.

  2. Currency Exchange Providers: Currency exchange providers are popular methods for laundering funds [2]. Criminals exchange lower-denomination banknotes with criminal origins into high-denomination banknotes, facilitating easier storage, transportation, and concealment.

  3. Legal Business Structures: Criminals use legal structures, such as companies and associations, to launder their funds through trade-based transactions [3]. The lack of regulation in this area hinders effective detection.

  4. Physical Cross-Border Transfers of Currency: With the increasing sophistication of banking systems, criminals resort to physically transferring currency across borders to evade detection [3]. These methods are difficult to monitor and prosecute due to the lack of traceable evidence.

  5. Land-Based Betting: Land-based betting, including the receiving and selling of winnings receipts, is extensively used to launder proceeds of various criminal activities [4]. Its popularity lies in the relative ease of use and limited reporting requirements for gambling providers.

The assessment exposes a few key trends in profit-driven crime:

  1. The emergence of organized crime networks: These networks offer laundering services to third parties [3], often employing frontmen and mules for various tasks.

  2. The increasing complexity: Criminals employ intricate methods, such as elaborate networks of national and international transfers, to conceal the origins of their funds [3].

Cooperation Between Authorities, Public, and Private Sectors

The Danish State Prosecutor for Serious Economic and International Crime emphasizes the importance of collaboration between authorities, public, and private sectors in combating money laundering [5]. Active partnerships with organizations like the Danish Financial Supervisory Authority (Danish FSA), Business Authority, Gambling Authority, and industry associations have enabled more informed and targeted assessments.

The findings from this assessment will be incorporated into various authorities and reporting entities’ strategies for money laundering prevention and detection. Danish citizens and businesses are encouraged to remain vigilant and report any suspicious activities [5].

[1] “Tidligere national risiko vurderinger for pengevask i Danmark” (Previously Conducted National Risk Assessments for Money Laundering in Denmark) - Danish State Prosecutor for Serious Economic and International Crime Link

[2] “Reporting in the private sector on suspicion of money laundering and terrorist financing”- Danish Financial Supervisory Authority Link

[3] “National Risk Assessment Report on Denmark” - European Commission Link

[4] “Danmarks Risiko- og Sikkerhedsanalysen: Reporting of Suspected Money Laundering and Terrorist Financing in Denmark in 2013” - Danish Center for Studies in Money Laundering Link

[5] “Fighting Financial and Economic Crime in Denmark: A Multilateral Approach” - The Ministry of Justice, Denmark Link