Denmark is an excellent example of the Nordic Model, designated by an internationally high tax level and a correspondingly high level of government-provided services and income transfers to various groups like disabled people, retirees, unemployed persons, and students. Because Denmark is the EU member, Danish legislation and regulations conform to EU standards on almost all issues. Denmark is one of the strongest supporters of trade liberalization.
Denmark is not a country with serious cases of financial crimes. Therefore, we cannot say that there are many risks of money laundering in the country. In addition, there are no trade-based money laundering activities in Denmark, and there is almost no public corruption. Besides, Denmark is geographically vulnerable to serving as a transit country for smuggling, just like Norway.
Foreign criminal activities generally cause money laundering activities in Denmark, and the foreign crimes mentioned here are related to the trafficking of illegal drugs such as cocaine and heroin. According to the Danish Special Crimes Unit, money laundering techniques can be used to launder the revenues of theft, tobacco smuggling, robbery, and human trafficking. In Denmark, illegal money transfers and foreign exchange services are commonly used to launder funds from this drug trafficking.
Denmark is one of the world’s least corrupt countries, and bribery and other corrupt practices are not considered business obstacles. The rating of transparency International Corruption Index is 87/100, and the world Governance Indicator - Control of Corruption is 99/100, which is pretty amazing! The Danish Criminal Code forbids active and passive bribery in international anti-corruption conventions. Safeguards against corruption and abuse of power primarily rest with a healthy practice of integrity rather than formal rules and regulations.
Denmark is not on the FATF List of Countries determined to have strategic AML deficiencies. The latest follow up to the Mutual Evaluation Report in Denmark was undertaken in November 2019. Based on this Assessment, it has been considered compliant for 6 of the Danish FATF 40 Recommendations and Largely Compliant for 28.
The Danish AML Act covers persons and legal entities that commercially provide gambling with a license in Denmark. The Act protects all gambling products as a rule. However, the Minister for Taxation can exempt the offer of particular gambling products from the legislative requirements partly or entirely if the gambling product is assessed to constitutive a low risk of being exploited in conjunction with money laundering. That possibility is to utilize so that the Act covers gambling operators that offer:
The critical regulatory instrument setting out banks’ obligations in this area is the Danish AML Act. The Danish AML Act is not a Danish invention but primarily implements EU anti-money laundering regulation. The EU’s central regulation in the area is the so-called Anti-Money Laundering Directives, predominantly based on the FATF recommendations. Also, there are the sanctions lists adopted by the EU based on, for instance, the UN Security Council resolutions.
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