Financial Crime World

Denmark: Revised AML Guidelines Released for Small Businesses

The Danish Financial Supervisory Authority (Danish FSA) has issued revised Anti-Money Laundering (AML) guidelines for small businesses, effective November 3. These new guidelines aim to strengthen preventive measures against money laundering and financial crime as part of the implementation of the EU’s 5th Anti-Money Laundering Directive.

Key Changes in the Revised AML Guidelines

  • Enhanced customer due diligence procedures
  • Reporting obligations to companies’ boards of directors
  • Adjustments regarding obtaining and verifying identity information on beneficial owners
  • Guidance on AISP and PISP AML requirements

Account Information Service Providers (AISPs)

  • Not subject to the requirements in the Danish AML Act, as they do not hold customer funds or participate in the payment chain.
  • However, most European countries have explicitly included AISPs in their national AML requirements.

Payment Initiating Service Providers (PISPs)

  • Subject to the requirements in the Danish AML Act and must consider whether to establish a customer relationship with customers.
  • This includes online businesses that regularly receive payments for goods and services from customers through payment initiating services or natural persons using PISPs to manage different accounts.

Risk Assessment and Monitoring

  • Unlike other payment service providers, PISPs do not execute payment transactions and are not in possession of customer funds, which means the risk of money laundering may be low.
  • However, PISPs must still carry out a risk assessment of the customer relationship, taking into account geographical factors, customer behavior, and unusual transactions.

API Design Limitations

  • Technical design of APIs used by PISPs to communicate with Account Servicing Payment Service Providers (ASPSPs) may limit the information available to PISPs.
  • Despite this, PISPs must continuously monitor and assess transactions initiated by their customers and consider whether they give rise to further investigation under the Danish AML Act.

Conclusion

The revised guidelines aim to provide small businesses in Denmark with a clearer understanding of their AML obligations and help them prevent money laundering and financial crime.