Denmark’s measures to combat money laundering and the financing of terrorism and proliferation

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Language

English

Country

Denmark

Mutual Evaluation of Denmark - 2017

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MER-Denmark-2017.pdf
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Paris, 7 August 2017 - Denmark has the foundations for a sound regime to tackle money laundering and terrorist financing, but needs to improve the implementation of measures to mitigate the risks, including through better assessing those risks and enhancing national policy coordination.

The FATF conducted an assessment of Denmark’s anti-money laundering and counter-terrorist financing (AML/CFT) system, based on the 2012 FATF Recommendations. This assessment covers the entire Kingdom of Denmark (hereafter Denmark), including Greenland and the Faroe Islands. This assessment reviews both the level of effectiveness of Denmark’s AML/CFT regime as well as its level of technical compliance with the FATF Recommendations.

Denmark does not have a national strategy to combat money laundering and terrorist financing and needs to do more to properly assess and understand the risks it is exposed to. The report also recommends that Denmark enacts an independent and modern money laundering offence that criminalises self-laundering.

In almost all segments of the financial sector and many of the other businesses and professions covered by the FATF Standards, money laundering and terrorist financing risks are not sufficiently assessed or updated, and there is a weak implementation of measures to mitigate the risks. Stronger implementation needs to be complemented by a fully comprehensive set of legal requirements in line with the Standards. Fundamental improvements are also needed to implement an effective risk-based approach to AML/CFT supervision of financial institutions and most DNFBPs, with stronger powers to enforce compliance and increased supervisory action.

On the operational side, Denmark has achieved substantial level of effectiveness in the investigation and prosecution of terrorist financing and international cooperation with foreign counterparts, in particular the Nordic and Baltic countries. The report recommends that Denmark similarly prioritise the investigation and prosecution of money laundering.

Denmark demonstrated its commitment to enhance its regime to detect, prevent and punish money laundering and terrorist financing and protect the integrity of the financial system, including through recent legislative amendments that could not be reviewed as part of the assessment. These developments are welcome and the Danish authorities are encouraged to ensure an effective implementation of these new legal provisions.

This report was adopted by the FATF at its Plenary meeting in June 2017.

Technical Compliance

Ratings which reflect the extent to which a country has implemented the technical requirements of the FATF Recommendations.

Denmark Mutual Evaluation 2017

R.1 - Assessing risk & applying risk-based approach
PC
R.2 - National cooperation and coordination
PC
R.3 - Money laundering offence
LC
R.4 - Confiscation and provisional measures
LC
R.5 - Terrorist financing offence
C
R.6 - Targeted financial sanctions related to terrorism & terrorist financing
PC
R.7 - Targeted financial sanctions related to proliferation
PC
R.8 - Non-profit organisations
PC
R.9 - Financial institution secrecy laws
LC
R.10 - Customer due diligence
PC
R.11 - Record keeping
LC
R.12 - Politically exposed persons
PC
R.13 - Correspondent banking
PC
R.14 - Money or value transfer services
LC
R.15 - New technologies
PC
R.16 - Wire transfers
PC
R.17 - Reliance on third parties
PC
R.18 - Internal controls and foreign branches and subsidiaries
PC
R.19 - Higher-risk countries
LC
R.20 - Reporting of suspicious transactions
C
R.21 - Tipping-off and confidentiality
C
R.22 - DNFBPs: Customer due diligence
PC
R.23 - DNFBPs: Other measures
LC
R.24 - Transparency and beneficial ownership of legal persons
PC
R.25 - Transparency and beneficial ownership of legal arrangements
PC
R.26 - Regulation and supervision of financial institutions
PC
R.27 - Powers of supervisors
LC
R.28 - Regulation and supervision of DNFBPs
LC
R.29 - Financial intelligence units
LC
R.30 - Responsibilities of law enforcement and investigative authorities
C
R.31 - Powers of law enforcement and investigative authorities
LC
R.32 - Cash couriers
LC
R.33 - Statistics
PC
R.34 - Guidance and feedback
PC
R.35- Sanctions
PC
R.36 - International instruments
LC
R.37 - Mutual legal assistance
LC
R.38 - Mutual legal assistance: freezing and confiscation
LC
R.39 - Extradition
LC
R.40 - Other forms of international cooperation
LC

C = compliant   |   LC = largely compliant     |   PC = partially compliant   |   NC = non-compliant

Effectiveness

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Denmark Mutual Evaluation 2017

IO1
ME
IO2
SE
IO3
LE
IO4
LE
IO5
ME
IO6
ME
IO7
ME
IO8
ME
IO9
SE
IO10
ME
IO11
SE

HE = high level of effectiveness   |   SE = substantial level of effectiveness    |   ME = moderate level of effectiveness   |   LE = low level of effectiveness

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