Denmark

1. Does Denmark have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes. Engaging in money laundering and terrorist financing is illegal under the Danish Money Laundering Act (the “Act”).

2. To whom does the legislation apply?

The legislation primarily applies to legal and natural persons when they are designated as or employed by commercial banks, mortgage credit institutes, savings undertakings, stockbrokers, life assurance companies and traversing pensions funds, electronic money institutions and payment services providers, insurance mediator, attorneys, auditors, real estate agents and real estate companies, etc. as stated in divisions no 1 through 26 of section 1 of the Act. Please note that division no. 8 of the 26 is a provision for residuary activities which are listed in the Act’s appendix 1.

3. What does the legislation prohibit?

The Danish Money Laundering Act prohibits money laundering and terrorist financing, and, in this connection, the Act states several investigation and notification obligations that the companies and persons covered by the Act must observe e.g., a duty to establish risk assessments, written policies, business procedures and controls, KYC, whistleblower scheme, monitorization of business relations and constant documentation of all of the above obligations etc.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Money laundering is defined as (i) unjustifiably receiving or obtaining for oneself or any other part of financial gain obtained by a criminal offense, (ii) unjustifiably concealing, storing, transporting, assisting in disposal or otherwise subsequently acting to secure the financial gain from a criminal offense or (iii) attempted or complicity in such dispositions. The foregoing is interpreted as an underlying criminal activity must be proven before a person can be sanctioned for an act of money laundering. However, the persons subject to the Act may still be sanctioned without the evidence of an underlying criminal activity based on gross negligence or intent at the compliance and prevention level.

5. What level of intent or knowledge is required to establish a violation?

It requires either intention or gross negligence to establish a violation of the Danish Money Laundering Act.

6. What are the potential penalties for infringing the legislation?

The penalty for infringing the Act is either a fine or imprisonment (of up to 2 years in serious cases) depending on the gravity of the crime. Excepted are cases where more severe penalty is due to provisions within the Danish Criminal Code. The provisions of the Danish Criminal Code on Terrorist financing are capped at maximum imprisonment of six years with the possibility of increase to 10 to 16 years imprisonment in a case of partaking in terrorist activities.

7. Does the legislation have extra-territorial reach?

No, the Act in Denmark does not have extra-territorial reach. This was recently challenged by the authorities and the challenge was rejected by the court.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

There may indeed be additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations for businesses or individuals that operate in particular sectors or undertake particular activities. The many amendments to the Act subsequently amend special acts regulating the financial sectors.

Depending on which of the four AML supervision authorities an industry or activity is supervised by, the supervised subject will have to register itself in the AML register of that supervising authority. An important note is that provision 26 of the Act. obligate the subject to notify the Danish Money Laundering Secretariat (in Danish: Hvidvasksekretariatet) of any suspicion or assumption of money laundering or terrorist financing immediately. For one to be able to notify immediately one must have been pre-approved as a user of https://hvidvask.politi.dk/Home thus all subjects to the Act must register with https://hvidvask.politi.dk/Home from moment they fall within the scope of the divisions no 1 through 26 of section 1 of the Act.

9. What are the potential penalties for failing to comply with these obligations?

The penalties for failing to comply with these obligations is either daily or weekly fines issued by the supervisory authority or imprisonment (of up to 3 years in serious cases) depending on the gravity of the crime. Excepted are cases where more severe penalty is due to provisions within the Danish Criminal Code.

10. Who are the relevant enforcement authorities in Denmark and what are their contact details?

The Danish Financial Supervisory Authority, the Danish Business Authority, the Danish Gaming Authority and The Danish Bar and Law Society may issue injunctions in accordance with the Act. If these injunctions are not complied with, the above-mentioned Authorities may issue a fine.

Notification of money laundering and terrorist financing must be given to the Danish Money Laundering Secretariat. The notification must be uploaded here: https://hvidvask.politi.dk/Home. For inquiries regarding this, an email may be sent to fiu@politi.dk or in urgent situations by telephone on +45 451 547 10 or outside business hours on +45 114.