Financial Crime World

Danish Authorities Warn of High Money Laundering Risks: Currency Exchange, Legal Business Structures, and Betting Sectors

New National Risk Assessment Identifies High-Risk Areas for Money Laundering in Denmark

The Danish State Prosecutor for Serious Economic and International Crime has released the 2018 National Risk Assessment of money laundering in Denmark. The report outlines several high-risk sectors and methods for money laundering, emphasizing the need for increased vigilance from authorities and financial institutions.

High-Risk Sectors for Money Laundering in Denmark

According to the report, some of the most significant risk areas for money laundering in Denmark include:

Currency Exchange Providers

  1. Currency exchange services: Criminals often use currency exchange services to launder funds. Exchange smaller banknotes into larger ones, making it easier to transport and store the funds. Anonymity offered by this method reduces the risk of detection. Unlicensed providers operating outside the regulatory framework further increase the risks.
  1. Front companies and fake owners: Criminals exploit various business structures for money laundering. They may use front companies or appoint fake owners and directors to hide their involvement in criminal activities. Proceeds of crime are laundered via trading, combining legitimate and illegitimate funds to create seemingly legal transactions.

Physical Cross-Border Transfer of Currency

  1. Physical transfer of currency across borders: As banks become increasingly adept at detecting and monitoring suspicious transactions, criminals opt for less traceable methods. Physical transfer of currency across borders is a popular choice because it is less traceable, and the low detection risk makes it attractive for money launderers.

Additionally, the report highlights trends in profit-driven crime and the actors involved. Organized crime groups turn to sophisticated methods like tech-related crimes and cyberattacks to generate profits, which can be laundered.

Combating Money Laundering Risks

The report emphasizes the importance of international cooperation among law enforcement agencies and the need to strengthen regulatory frameworks. Financial institutions must detect and report suspicious transactions. Earlier this year, Denmark’s Financial Supervisory Authority (Danish FSA) issued a public warning about the risks of money laundering in the financial sector.

Additional Information

The full report, which includes details on identifying threats and vulnerabilities, analysis of trends, and conditions in society, is available on the Danish State Prosecutor for Serious Economic and International Crime’s website.