Denmark’s Efforts to Combat Cross-Border Money Laundering and Terrorist Financing
Copenhagen - As Denmark continues to grapple with the challenges of money laundering and terrorist financing, its financial authorities are working tirelessly to strengthen international cooperation and domestic coordination to mitigate these risks.
International Cooperation
According to a recent report by the International Monetary Fund (IMF), Denmark’s Financial Supervisory Authority (DFSA) plays a crucial role in exchanging information with foreign counterparts, conducting joint inspections, and working closely with other Danish stakeholders to effectively supervise cross-border banking activities. The report highlights that close international and domestic cooperation can enable the early detection of new and evolving threats, support the identification of deficiencies in banks’ internal controls, and facilitate law enforcement investigations.
Exchanging Information
The DFSA has made significant strides in exchanging information with EU/EEA counterparts, even in the absence of specific bilateral agreements. Under Danish law, the authority is obligated to cooperate with EU/EEA authorities, which enables spontaneous exchanges of information on a wide range of topics related to money laundering and terrorist financing.
Room for Improvement
However, the report notes that the DFSA’s arrangements for international supervisory cooperation are too narrow, given the current networks of Denmark’s international banking groups. The authority has yet to conclude MOUs with its local counterparts in non-EU, non-EEA countries, including:
- Australia
- Brazil
- Hong Kong SAR (China)
- India
- Russia
- Singapore
- Switzerland
Domestic Cooperation
The report also highlights the need for greater international cooperation on AML/CFT supervision, particularly within established regional groupings and supervisory colleges. The authorities support enhanced information-sharing at the national and European levels, but there is no settled view within the country as to the desirability of formally integrating AML/CFT supervision.
Money Laundering Forum
In terms of domestic cooperation, the report notes that the Danish authorities took an important step by enshrining in law the role of the Money Laundering Forum (MLF), which serves as a key forum for AML/CFT-related cooperation within Denmark. The MLF is responsible for:
- Coordinating risk assessments
- General measures against money laundering and financing of terrorism
Conclusion
Overall, the report concludes that while Denmark has made significant progress in combating cross-border money laundering and terrorist financing, there is still much work to be done to strengthen international cooperation and domestic coordination.