FATF AML Deficiency List
Non - Compliance with FATF 40 + 9 Recommendations
Denmark is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The latest follow up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Denmark was undertaken in February 2021. According to that Evaluation, Denmark was deemed Compliant for 6 and Largely Compliant for 32 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Denmark was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -
Denmark does not have a serious problem in the area of financial crimes. Money laundering activity is generally derived from foreign criminal activity and is primarily related to the sale of illegal narcotics, specifically cocaine, heroin, and amphetamines. Immigrant gangs as well as outlaw motorcycle gangs have been involved in a range of offenses, including narcotics-related offenses, smuggling of goods, and various financial crimes. The Danish Special Crimes unit also believes human trafficking, car theft, robberies, smuggling of alcohol and tobacco, and tax or duties fraud also generate laundered funds. Illegal money remittances and foreign exchange services and their possible link to terror finance pose risks. There are no indications of trade- based money laundering as it relates to drug trafficking in Denmark, and public corruption is virtually non-existent. Denmark is geographically vulnerable to serving as a transit country for smuggling into Sweden and Norway.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 88
World Governance Indicator – Control of Corruption 98
Denmark is regarded as one of the world’s least corrupt countries, and bribery and other corrupt practices are not considered obstacles to business. The Danish Criminal Code (in Danish) forbids active and passive bribery and most other forms of corruption offences contained in international anti-corruption conventions. It is also forbidden to bribe foreign public officials, and companies can be held criminally liable for acts of corruption committed by individuals working on their behalf. There is no distinction made between bribes and facilitation payments, and the propriety of gifts and hospitality depends on their intent and the benefit obtained. Safeguards against corruption and abuse of power in Denmark primarily rest with a strong practice of integrity rather than with formal rules and regulations. Despite a very low level of corruption, international monitoring institutions have criticised Denmark for its non-transparent rules on financing of political parties, and for insufficient enforcement of foreign bribery laws. Nonetheless, the government enforces their anti-corruption policies and laws effectively. For further information - GAN Integrity Business Anti-Corruption Portal
This thoroughly modern market economy features a high-tech agricultural sector, advanced industry with world-leading firms in pharmaceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a net exporter of food, oil, and gas and enjoys a comfortable balance of payments surplus, but depends on imports of raw materials for the manufacturing sector. Danes enjoy a high standard of living and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. An aging population will be a major long-term issue.
Denmark is a member of the EU; Danish legislation and regulations conform to EU standards on almost all issues. Despite previously meeting the criteria to join the European Economic and Monetary Union, Denmark has negotiated an opt-out with the EU and is not required to adopt the euro. Within the EU, Denmark is among the strongest supporters of trade liberalization.
After a long consumption-driven upswing, Denmark's economy began slowing in 2007 with the end of a housing boom. Housing prices dropped markedly in 2008-09 but, with significant regional differences, have since recovered. Household indebtedness is still relatively high at more than 305% of net disposable income in 2014, while household net worth - from private pension schemes and other assets - amounted to 546% of net disposable income.
The global financial crisis exacerbated this cyclical slowdown by increasing domestic borrowing costs and lowering foreign demand for Danish exports. Denmark maintained a healthy budget surplus for many years up to 2008, but the budget balance swung into deficit in 2009. The structural budget deficit has remained below 1% and is estimated at -0.4% in 2016. Denmark is experiencing a lackluster economic recovery, having still not regained the GDP level of 2008. GDP contracted in 2012 and 2013, followed by real growth of 1.3% in 2014, and 1.2% in 2015. The government projects 1.9% growth in 2016, while private sector estimates are about 1% growth. A historically low level of unemployment rose with the economic downturn but the labor market has strengthened since 2013, and unemployment stood at about 4.5% in early 2016, based on the national measure. Productivity growth was significantly below the OECD average in 2012–2014.
Agriculture - products:
barley, wheat, potatoes, sugar beets; pork, dairy products; fish
iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture and other wood products, shipbuilding and refurbishment, windmills, pharmaceuticals, medical equipment
Exports - commodities:
machinery and instruments, meat and meat products, dairy products, fish, pharmaceuticals, furniture, windmills
Exports - partners:
Germany 17.8%, Sweden 11.6%, US 8.4%, Norway 6.3%, UK 6.3%, Netherlands 4.4%, China 4.2% (2015)
Imports - commodities:
machinery and equipment, raw materials and semimanufactures for industry, chemicals, grain and foodstuffs, consumer goods
Imports - partners:
Germany 20.4%, Sweden 12.3%, Netherlands 8.1%, China 7.3%, Norway 6.1%, UK 4.4% (2015)
Investment Climate - US State Department
Denmark is regarded by many independent observers as one the world’s most attractive business environments and is characterized by political, economic and regulatory stability. It is a member of the European Union (EU) and Danish legislation and regulations conform to EU standards on virtually all issues. Denmark regularly ranks first as the world’s least corrupt nation. It conducts a fixed exchange rate policy, with the Danish Krone linked closely to the Euro. Denmark is a social welfare state with a thoroughly modern market economy reliant on free trade in goods and services. It is a net exporter of food, fossil fuels and wind power, but depends on raw material imports for its manufacturing sector.
Within the EU, Denmark is among the strongest supporters of liberal trade policy. The country suffered from the 2008 financial crisis, exacerbated by previous over-investment in commercial, private, and agricultural real estate, and by personal over-leveraging by Danish consumers, which contributed to a low level of private investment and consumption. While private consumption is improving, Denmark still faces challenges from generally disappointing growth in exports and lack of investment.
The Danish economy has experienced a period of lackluster growth following the 2008 global financial crisis and subsequent economic recessions. Real GDP grew by just 1.2 percent in 2015, slightly better than the 0.8% annual growth average for 2010 – 2015. The government estimates 1.1% GDP growth for 2016, accelerating to 1.7% in 2017. Private sector estimates are more subdued, in the 0.5% to 0.8% range for 2016. One of the main headwinds in the economy in recent years - restrained private consumption – abated in early 2015.
Contributing factors were decreasing unemployment, a weaker kroner (due to its linkage to the Euro), declining oil prices and record low interest rates. However, the main driver for growth – exports – has exhibited weaknesses since the second half of 2015. Denmark is reliant on international trade (which accounts for about 50 percent of GDP) and developments in its major trading partners – Germany, Sweden, UK and the United States – have substantial impact on Danish national accounts. Gross unemployment, a national definition, was 4.2 percent in March 2016, and is forecast to decrease slightly in coming years as the economy improves and structural reforms take effect. The OECD Harmonized Unemployment Rate was 5.8 percent in March 2016.
Denmark is a major international development assistance donor, contributing DKK 15,546 million (USD 2.31 billion) or 0.74 percent of GNI to development assistance in 2015, with 78.4 percent of Danish assistance bilateral and 21.6 percent multilateral.
Underlying macroeconomic conditions in Denmark are sound, and the investment climate is favorable. Denmark is situated strategically, linking continental Europe with the Nordic and Baltic countries. Transport and communications infrastructures are efficient. Denmark is among world leaders in industries such as information technology, life sciences, clean energy technologies, and shipping.
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