Financial Crime World

Danish Anti-Money Laundering Regulations Expanded: Key Highlights and Updates

The Danish Ministry of Industry, Business and Financial Affairs has consolidated and expanded its Anti-Money Laundering (AML) regulations through the new Consolidation Act on Measures to Prevent Money Laundering and Terrorism Financing. This article outlines the main changes in the updated regulations.

Key Highlights

  • The new Act consolidates the existing AML Act with recent amendments, broadening its scope to cover a greater number of businesses and professions.
  • The following industries and professions are now subject to the AML regulations:
    • Banks
    • Mortgage credit institutions
    • Investment firms
    • Life insurance companies and cross-sectoral pension funds
    • Savings institutions
    • Issuers of electronic money and providers of payment services
    • Insurance intermediaries
    • Other undertakings and persons engaging in relevant activities
    • Branches, distributors, and agents of foreign companies
    • Investment management companies and managers of alternative investment funds
    • Danish UCITS and alternative investment funds with direct customer contact
    • Operators of regulated markets
    • Actors involved in auctions
    • and more.
  • Individuals and entities outside of these specific industries, such as lawyers, auditors, real estate agents, and others, are also affected when they conduct relevant transactions or activities.

Definitions and Key Concepts

  • The Act defines several key concepts, including:

    • Financial transactions
    • Business relationship
    • Correspondent relationship
    • Customer relationship

  • Section 3 of the Act also includes definitions for money laundering and terrorist financing.

Risk Assessment and Management

  • Undertakings and persons covered by the Act are required to identify and assess the risks of money laundering or terrorist financing in their businesses.
  • The risk assessment should be documented and updated regularly.
  • The Act sets forth specific requirements for designating an authorized employee to make decisions regarding AML compliance and the appointment of a compliance officer at management level.

Customer Due Diligence Procedures

  • The Act mandates customer due diligence (CDD) procedures for various situations:

    • The establishment of a business relationship
    • Significant transactions
    • Suspicious activities

  • In general, the CDD procedures include identifying and verifying the customer’s identity, assessing the purpose and intended nature of the business relationship, and continuously monitoring the relationship for consistency.

Exemptions and Additional Requirements

  • The Minister for Industry, Business and Financial Affairs and the Minister of Taxation have the ability to issue rules for exemptions from the requirements of the Act.
  • For example, lawyers have specific exemptions regarding advisory services and transactions mentioned in Section 1 (1), no. 14.

The updated Danish AML regulations aim to strengthen the country’s efforts to combat money laundering and terrorist financing. By enforcing stricter requirements on a wider range of businesses and professions and ensuring sufficient knowledge and resources for compliance, these measures will help to keep Denmark safe from financial crimes.

  • Consult the original Danish document for a full understanding of the updated AML regulations.
  • Familiarize yourself with the key concepts, your obligations, and the customer due diligence procedures.
  • Establish and document a risk assessment plan, and update it regularly.
  • Designate an authorized employee and appoint a compliance officer at management level.