Denmark - FATF-GAFI.ORG

1 August 2017 Anti-money laundering and counter-terrorist nancing measuresDenmarkMutual Evaluation ReportThe Financial Action T ask Force (F ATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CTF) standard. For more information about the FATF, please visit the website: This document and/or any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

2 This assessment was adopted by the FATF at its June 2017 Plenary meeting. Citing reference: 2017 FATF. All rights reserved. No reproduction or translation of this publication may be made without prior written permission. Applications for such permission, for all or part of this publication, should be made to the FATF Secretariat, 2 rue Andr Pascal 75775 Paris Cedex 16, France (fax: +33 1 44 30 61 37 or e-mail: Photo credits cover photo: Finanstilsynet FATF (2017), Anti-money laundering and counter-terrorist financing measures - Denmark , Fourth Round Mutual Evaluation Report, FATF, Paris laundering and counter-terrorist financing measures in Denmark 2017 1 CONTENTS EXECUTIVE SUMMARY.)

3 13 Key Findings .. 3 Risks and General Situation .. 5 Overall Level of Effectiveness and Technical Compliance .. 5 Priority Actions .. 10 Effectiveness & Technical Compliance Ratings .. 12 MUTUAL EVALUATION REPORT .. 13 Preface .. 13 CHAPTER 1. ML/TF RISKS AND CONTEXT .. 15 ML/TF Risks and Scoping of Higher-Risk Issues .. 16 Materiality .. 19 Structural Elements .. 19 Background and other Contextual Factors .. 19 CHAPTER 2. NATIONAL AML/CFT POLICIES AND COORDINATION .. 29 Key Findings and Recommended Actions .. 29 Immediate Outcome 1 (Risk, Policy and Coordination) .. 30 CHAPTER 3. LEGAL SYSTEM AND OPERATIONAL ISSUES.

4 39 Key Findings and Recommended Actions .. 39 Immediate Outcome 6 (Financial intelligence ML/TF) .. 41 Immediate Outcome 7 (ML investigation and prosecution) .. 49 Immediate Outcome 8 (Confiscation) .. 56 CHAPTER 4. TERRORIST FINANCING AND FINANCING OF PROLIFERATION .. 65 Key Findings and Recommended Actions .. 65 Immediate Outcome 9 (TF investigation and prosecution) .. 67 Immediate Outcome 10 (TF preventive measures and financial sanctions) .. 72 Immediate Outcome 11 (PF financial sanctions) .. 83 CHAPTER 5. PREVENTIVE MEASURES .. 87 Key Findings and Recommended Actions .. 87 Immediate Outcome 4 (Preventive Measures).

5 89 CHAPTER 6. SUPERVISION .. 101 Key Findings and Recommended Actions .. 101 Immediate Outcome 3 (Supervision) .. 103 CHAPTER 7. LEGAL PERSONS AND ARRANGEMENTS .. 123 Key Findings and Recommended Actions .. 123 Immediate Outcome 5 (Legal Persons and Arrangements) .. 124 CHAPTER 8. INTERNATIONAL COOPERATION .. 131 2 Anti-money laundering and counter-terrorist financing measures in Denmark 2017 Key Findings and Recommended Actions .. 131 Immediate Outcome 2 (International Cooperation) .. 132 TECHNICAL COMPLIANCE ANNEX .. 139 Recommendation 1 - Assessing Risks and applying a Risk-Based Approach.

6 139 Recommendation 2 - National Cooperation and Coordination .. 142 Recommendation 3 - Money laundering offence .. 144 Recommendation 4 - Confiscation and provisional measures .. 147 Recommendation 5 - Terrorist financing offence .. 149 Recommendation 6 - Targeted financial sanctions related to terrorism and terrorist financing .. 151 Recommendation 7 Targeted financial sanctions related to proliferation .. 157 Recommendation 8 Non-profit 159 Recommendation 9 Financial institution secrecy laws .. 165 Recommendation 10 Customer due diligence .. 166 Recommendation 11 Record-keeping.

7 171 Recommendation 12 Politically exposed persons .. 172 Recommendation 13 Correspondent banking .. 174 Recommendation 14 Money or value transfer services .. 174 Recommendation 15 New technologies .. 176 Recommendation 16 Wire transfers .. 177 Recommendation 17 Reliance on third parties .. 179 Recommendation 18 Internal controls and foreign branches and subsidiaries .. 181 Recommendation 19 Higher-risk countries .. 182 Recommendation 20 Reporting of suspicious transaction .. 183 Recommendation 21 Tipping-off and confidentiality .. 183 Recommendation 22 DNFBPs: Customer due diligence.

8 184 Recommendation 23 DNFBPs: Other measures .. 185 Recommendation 24 Transparency and beneficial ownership of legal persons .. 187 Recommendation 25 Transparency and beneficial ownership of legal arrangements .. 193 Recommendation 26 Regulation and supervision of financial institutions .. 194 Recommendation 27 Powers of supervisors .. 200 Recommendation 28 Regulation and supervision of DNFBPs .. 201 Recommendation 29 - Financial intelligence units .. 203 Recommendation 30 Responsibilities of law enforcement and investigative authorities .. 206 Recommendation 31 - Powers of law enforcement and investigative authorities.

9 207 Recommendation 32 Cash Couriers .. 209 Recommendation 33 - Statistics .. 211 Recommendation 34 Guidance and feedback .. 212 Recommendation 35 Sanctions .. 213 Recommendation 36 International instruments .. 217 Recommendation 37 - Mutual legal assistance .. 218 Recommendation 38 Mutual legal assistance: freezing and confiscation .. 219 Recommendation 39 Extradition .. 222 Recommendation 40 Other forms of international cooperation .. 226 Summary of Technical Compliance Key Deficiencies .. 231 GLOSSARY OF ACRONYMS .. 237 Anti-money laundering and counter-terrorist financing measures in Denmark 2017 3 Executive Summary 1.

10 This report provides a summary of the anti-money laundering and combating the financing of terrorism (AML/CFT) measures in place in the Kingdom of Denmark as at the date of the on-site visit (2-18 November 2016). It analyses the level of compliance with the FATF 40 Recommendations, the level of effectiveness of Denmark s AML/CFT system, and provides recommendations on how the system could be strengthened. Key Findings Overall, Denmark has a moderate level of understanding of its money laundering and terrorist financing (ML/TF) risks; with TF risks being better understood by authorities.