Reference should be made to the Denmark country report for further information (see below): -

FATF Status​

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.

Mutual Evaluation Report Recommendation Ratings

Conclusion from last Follow-up Report (2021)

FATF has re-rated Recommendations 6,7,8,25 and 26 from Partially Compliant to Largely Compliant.

Recommendation 15 was re-rated from Largely Compliant to Partially Compliant.:

Conclusion from last Follow-up Report (2019)

Overall, Denmark has made progress in addressing the technical compliance deficiencies identified in its MER, sufficient to justify upgrading three Recommendations.

Denmark will remain in enhanced follow-up and will report back to the FATF on progress in October 2020.

Conclusions from follow-up report – November 2018

Overall, Denmark has made good progress in addressing the technical compliance deficiencies identified in its MER and has been re-rated on ten Recommendations. Nine Recommendations remain PC. Denmark fully addressed the deficiencies in Recommendation 12 which is re-rated as C. Denmark has also addressed most of the technical compliance deficiencies identified on R.2, 10, 15, 16, 17, 18, 22, 24 and 33, such
that only minor shortcomings remain and these Recommendations are re-rated as LC. Recommendation 3 and 23 remained rated LC. While Denmark complies with the revised requirement of R.7, outstanding deficiencies remain, meaning Denmark remains PC. Denmark complies with the updated requirements of R.18 and R.21. R.18 is being re-rated to LC as noted above and R.21 will maintain its C rating.

Key Findings ​from latest Mutual Evaluation Report

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. Denmark’s assessment of ML risk is comprised of a number of sectoral risk assessments, which underpin the ML national risk assessment (NRA).​

The TF NRA was separately prepared. The NRAs were not conducted in a coordinated, whole-of-government manner, and suffered from several methodological deficiencies in terms of inputs, design and scope. Denmark does not maintain comprehensive statistics on matters relevant to effectiveness and efficiency of their AML systems, and this negatively impacted the ML NRA. Overall, while some risk-based actions have been taken in response to the NRAs, it is limited and variable and does not adequately correspond to the risks identified.​

Denmark does not have national AML/CFT strategies or policies. The objectives and activities of individual competent authorities are determined by their own priorities and are not coordinated. Coordination and cooperation tends to occur informally and on an ad hoc basis.​

The effective functioning of the Money Laundering Secretariat (MLS), Denmark’s financial intelligence unit (FIU), is hampered by its lack of human resources and operational autonomy.​

Denmark has a handling of stolen goods offence that extends to all criminal proceeds thus encapsulating the laundering of all predicate offences. Based on Danish legal tradition, the offence does not cover self-laundering. In practice, the police focus on prosecuting the predicate offence and information provided suggests that serious ML is not actively pursued. As the ML offence also includes traditional handling of stolen goods, it is not possible to obtain separate data on ML. The criminal penalty of 1.5 years of maximum imprisonment for ordinary ML is not fully proportionate or dissuasive, and though aggravated ML carries a higher penalty of six years, the average of penalties imposed in practice were low and in many cases resulted in suspended imprisonment.​

Denmark has a robust legal framework for investigating and prosecuting TF. Every counterterrorism investigation includes an investigation into potential TF. Between 2011 and 2016, Denmark indicted 16 persons with TF offences, resulting in seven convictions. This appears to be in line with the TF risks of Denmark. The maximum penalty for TF is ten years’ imprisonment. However, in practice, more lenient sanctions are applied, which limits the dissuasiveness of the relatively high sanctions.​

Denmark has a legal system to apply targeted financial sanctions (TFS) [both TF and proliferation financing (PF)]. Implementation of TFS related to UNSCR 1267, 1988, and 1373 (and their successor resolutions) has technical and practical deficiencies due to delays at the European Union (EU) level on the transposition of designated entities into sanctions lists and the absence of any specific measures to freeze the assets of EU internals. Understanding and implementation of TFS by reporting entities is varied and limited, particularly outside the banking sector. With a few exceptions, TFS knowledge and compliance by designated non-financial businesses and profession (DNFBPs) is poor. There is some, but insufficient, compliance with obligations by reporting entities. There is limited monitoring of TFS compliance by supervisory authorities.​

Overall, there is an inadequate understanding of risk and weak implementation of AML/CFT measures in almost all segments of the financial sector. With the exception of casinos, DNFBPs’ understanding of risk and implementation is also generally poor. The legal framework of preventive measures also includes a number of gaps which negatively impact the effectiveness of the system. ​

With the exception of the casino sector, a risk-based approach to AML/CFT supervision is limited, and where it exists is in the early stages of implementation. Further, the frequency, scope and intensity of supervision are inadequate. There are also serious concerns related to the severe lack of resources available for AML/CFT supervision in Denmark. The range of supervisory powers to enforce compliance and sanction breaches are insufficient, with referrals to police for investigation and prosecution being the principal used to ensure compliance by financial institutions (FIs). The sanctions that have been applied are not proportionate and dissuasive. ​

Denmark’s extensive system of registers, for both natural (CPR) and legal persons (CVR) provides a solid foundation for obtaining ownership and other information. Beneficial ownership information is relatively easily traced through the Central Business register (CVR) in less complicated structures and where no foreign ownership or control is involved. In these cases (complex and foreign ownership), competent authorities have to obtain beneficial ownership information from FIs/DNFBPs (where the legal person is a customer). However, implementation of AML/CFT measures, including with respect to beneficial ownership, is generally weak. New legislation enacted in 2016, and coming into force in May 2017, will require all legal persons to obtain and hold beneficial ownership information and make it publicly available through the CVR, and this will significantly strengthen the ability of authorities to obtain beneficial ownership information in a timely way.​

Denmark has a sound legal framework for all forms of international cooperation. Where there is an absence of a legal framework to provide legal assistance, authorities apply Danish legislation by analogy.

Risks and General Situation​

The Kingdom of Denmark consists of Denmark, Greenland and the Faroe Islands. The total annual ML potential in Denmark is estimated by authorities to be approximately EUR 2.8 billion, comprising of proceeds from drugs, human trafficking, car theft, robberies, arms trade, smuggling of tobacco and liquor, tax and excise duty fraud, and other economic crime. Of these crimes, Denmark considers tax and excise duty crime to be one of the most profitable crime areas. Specifically, Denmark estimates that fiscal and value-added tax (VAT) fraud generate the largest proceeds of crime in Denmark. Tax authorities estimate that the Treasury suffers a loss of about EUR 0.4 billion a year from tax fraud alone.​

Denmark’s ML NRA identifies the following areas as high risk in Denmark: currency exchangers; legal business structures; money remittance providers; and cash smuggling. Medium risks include: banks, gambling sector; purchasing of real-estate; high-value goods; trust company service providers (TCSPs); electronic payment services; and, lawyers and accountants. Low risk areas include only life assurance and pensions funds.​

In 2015, a terrorist attack occurred in Copenhagen, resulting in three deaths (including the perpetrator) and five injured. Terrorism is recognised as a significant threat to Denmark, particularly from networks, groups and individuals who adhere to a militant Islamist ideology. Terrorist financing in Denmark is primarily conducted to support terrorist groups and networks abroad, including groups in conflict zones. At the time of the onsite an estimated

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.

OECD Common Reporting Standard

Greenland signed up to the implementation of the OECD Common Reporting Standard in 2018.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                          N/A

World Governance Indicator – Control of Corruption              82

​

Reference should be made to the Denmark country report for further information (see below): -

US State Department

Denmark is perceived as the least corrupt country in the world according to the 2019 Corruption Perceptions Index by Transparency International, which has local representation in Denmark. The Ministry of Justice is responsible for combating corruption, which is covered under the Danish Penal Code. Penalties for violations range from fines to imprisonment of up to four years for a private individual’s involvement and up to six years for a public employee’s involvement. Since 1998, Danish businesses cannot claim a tax deduction for the cost of bribes paid to officials abroad.

Denmark is a signatory to the OECD Convention on Combating Bribery, the UN Anticorruption Convention, and a participating member of the OECD Working Group on Bribery. In the Working Group’s 2015 Phase 3 follow-up report on Denmark, the Working Group concluded “that Denmark has partially implemented most of its Phase 3 recommendations. However, concerns remain over Denmark’s enforcement of the foreign bribery offence.”

GAN Integrity Business Anti-Corruption Portal

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.

The Greenlandic government is actively pursuing foreign investment to diversify the economy, advance climate goals, and increase trade.

Greenland is a self-governing area within the Kingdom of Denmark, yet it is not an EU member. Greenland originally joined the EU with Denmark in 1973 but left in 1985 and is today one of the EU’s Overseas Countries and Territories (OCTs).

Two-thirds of Greenland lies above the Arctic Circle, and its northern tip is less than 500 miles from the North Pole. Greenland can be reached by air from Denmark or Iceland. There are currently no direct commercial flights to or from the United States. With approximately 60 kilometers of road in the whole territory, people and goods are transported either by air or by sea.

Greenland’s GDP was estimated at $3.19 billion (DKK 20.19 billion) in 2020. Denmark’s annual block grant to Greenland equals approximately 20 percent of GDP.

The preponderance of jobs is in the public sector or with Government of Greenland-owned enterprises that comprise the telecommunication, power, and transportation sectors. Fishing is Greenland’s single most important commercial industry, accounting for 93 percent of exports. The sector is dominated by two companies, the Government of Greenland-owned Royal Greenland and the privately-owned Polar Seafood. The government is promoting the development of tourism and the extractive minerals sector, as well as hydropower projects. Greenland has large deposits of critical minerals and rare earth elements. Greenland owns and has disposal rights over all mineral resources, including oil and gas resources. The Greenlandic government announced in July 2021 its decision to cease issuing licenses for hydrocarbon exploration.

Greenland’s status within the Kingdom of Denmark is outlined in the Self Rule Act (SRA) of 2009, which details the Greenlandic government’s right to assume a number of additional responsibilities from the Danish government, including the administration of justice, business and labor, aviation, immigration and border control, and financial regulation and supervision. Before 2009, Greenland had already acquired control over taxation, fisheries, internal labor negotiations, natural resources, and oversight of offshore labor, environment, and safety regulations. Denmark continues to have control over the Realm’s foreign affairs, security, and defense policy, in consultation with Greenland and the Faroe Islands. Denmark also retains authority over border control issues, including immigration into Greenland. The annual block grant Denmark provides to Greenland is indexed to inflation and accounts for about half of the Greenlandic government’s revenue. In 2021, this grant was $636 million (DKK 4.0 billion).

The Greenlandic government seeks to increase economic growth and government revenues by promoting the further development of fisheries, extractive resources, energy production, and tourism while periodically trimming the public sector through privatization of enterprises currently owned by the government. Key initiatives include improving access to and localizing financing for new businesses and enhancing Greenland’s corporate tax competitiveness. Over the past decade, rising prices for fish and shellfish, the predominant Greenlandic exports, have generated solid earnings for large parts of the fisheries sector, though they were negatively impacted by COVID-19 border closures in China. The Greenlandic government directed state-owned enterprises to stop trading with Russia in February 2022 and announced the government’s intent to join EU sanctions against Russia. The Greenlandic parliament adopted legislation in May 2022 providing the framework for the government to impose sanctions against Russia.

To meet anticipated demand, the Government of Greenland has extensive plans to improve infrastructure. The capital Nuuk (population 19,000) is growing in large part through economic migration from within the country. The government is expanding the airport to accommodate direct international flights, has a multilingual workforce, an active shipping and cruise port, and additional planned investments in roads, housing, and port expansion. The government is improving access to Greenland’s primary tourist destination Ilulissat (population 4,670) through an airport expansion. Both airport expansions in Nuuk and Ilulissat are expected to be completed in 2024. Additionally, the Government of Greenland is planning a new airport in Qaqortoq, the municipal seat of South Greenland, with plans for additional infrastructure improvements as well. Lastly Sisimiut, the second-largest town (population 5,600) in Greenland, is home to Greenland’s northernmost port that remains ice free year-round. Private partnerships are underway to expand adventure tourism from the shoreline to the polar ice cap and to increase access to the area’s UNESCO World Heritage Site. Other efforts to develop tourism include increases in hotel capacity, a reduction in passenger tax for cruise ships, and a focus on promoting foreign language education to create a more multilingual workforce. The government is calling for stricter safety requirements for navigation in Greenlandic waters.

Greenland offers world-class deposits of rare earths and critical minerals. In the mineral extractives sector, two smaller mines (ruby and anorthosite) are in production. The government granted a company an exploitation license to restart a gold mine in southern Greenland. The Dundas ilmenite project is actively being developed, while an Australia-based company is working to develop one of the world’s largest zinc deposits located in northeast Greenland. Two small Australia-based companies are vying to extract rare earth elements in South Greenland. The resources in both of these projects are globally significant; each would rank in the top five worldwide if they were developed. One of the projects, Kringlerne, received an exploitation license in late 2020. The developer of the Kvanefjeld project has requested arbitration proceedings in its dispute with the Government of Greenland and the Government of the Kingdom of Denmark following Greenland’s passage of a law in November 2021 banning mining of minerals containing more than 100 parts per million (ppm) of uranium, a limit which exploitation of the rare earth elements in Kvanefjeld would exceed.

GREENLANDIC ECONOMIC OUTLOOK

Greenland weathered the first year of the COVID-19 pandemic better than most other countries. While most parts of the world reported a sharp decline in activity in 2020, Greenland experienced positive growth of nearly 1 percent that year. In recent years there has been strong economic growth, mainly driven by large catches and high prices of fish and shellfish, but also supported by consumption, investments, and the resource extraction industry. The Greenlandic Economic Council (GEC) – an independent advisory council – estimated that real GDP grew on average by 2.4 percent annually from 2014 to 2018. The GEC expects growth to reach 1.8 percent for 2021 and 2.5 percent for 2022. A strong economy in recent years has led to labor shortages, both geographically and by sector, especially in connection with large construction projects. The GEC estimated unemployment declined from about 10 percent in 2014 to a projected 4.1 percent in 2021. Currently, 70 percent of all available jobs are in the capital Nuuk, and 90 percent of all available jobs are in just three locations: Nuuk (in which a third of the population resides), Sisimiut, and Pituffik (Thule Air Base).

Greenland’s remote geographical location and the ability to effectively mitigate the risk of infection through travel restrictions reduced the need for lockdowns and restrictions with their attendant adverse economic consequences. The tourism and travel industries bore the brunt of the negative impacts of the pandemic, as lockdowns and travel restrictions in other countries effectively wiped out the 2020 and 2021 tourism seasons in Greenland, but the industry is expecting a sharp upturn in 2022. Following two years of no port calls by the cruise industry, cruise ship reservations for 2022 are the highest numbers Greenland has seen.

The Greenland parliament (“Inatsisartut”) and the Government of Greenland (“Naalakkersuisut”) adopted a Budget Act in 2016, which mandates the budget not be in deficit over four contiguous years. The public budget had run surpluses since 2015, but the COVID pandemic forced a deficit of $21.4 million (DKK 135 million) in 2020, significantly below the initial estimates, and the 2020–2023 budget barely upheld the Budget Law requirement. The government projects a deficit of $12.1 million (DKK 76 million) in 2022. The Government of Greenland adopted a number of financial support measures, which increased public expenditures in 2020 and 2021 for health care, social benefits, and emergency aviation, while fisheries taxes fell. Public consumption in Greenland was 44.7 percent of GDP in 2020, compared to 24.7 percent in Denmark.

The Budget Act is currently under revision and the new revised act will come into force in 2023 with adjustments but in line with the basic concept. The government and government-owned enterprises had a gross debt of approximately 20 percent of GDP in 2020, and the debt is projected to increase from $636 million (DKK 4 billion) in 2020 to $1.1 billion (DKK 7.2 billion) in 2024. The GEC reported initially in 2017 that “projections for the public finances show a major sustainability problem.” The GEC has reaffirmed that finding in subsequent reports, including their latest report from the fall of 2021 in which it projected the fiscal sustainability problem to amount to -5.4 percent of GDP up to 2050. The GEC has warned about the effects of increasing public expenditures as larger portions of the population age into retirement, resulting in fewer wage earners in the labor market. The GEC has also noted that a realistic plan to close the gap between expected expenditures and revenues could require the Greenlandic government to cut social spending, raise the retirement age, and increase vocational education and training. For Greenland to become a more self-sufficient economy, the GEC asserted that the extractive and tourism sectors would need further development. The GEC noted that Greenland has not sufficiently addressed its sustainability challenges and estimated that the public budget would need to be reinforced by $159 million (DKK 1 billion) annually by 2040 to accommodate the aging population.

The vast majority of Greenlandic exports and imports pass through Denmark to and from the rest of the world but are reported as trade between the two. Greenland imports goods from all over the world, primarily through Denmark, and to a lesser extent, via Iceland. Some 93 percent of Greenlandic exports, measured in local currency, are fish products, with the remainder being mainly raw materials and machinery. Royal Greenland and Polar Seafood are the two main seafood exporters. Royal Greenland’s largest country market is China, and one-third of its revenues are generated in Asia, half in Europe, and 10 percent in North America, which the company views as a growth market. After experiencing major losses of exports to China in 2020 due to tightened import restrictions in China as a reaction to COVID-19, Royal Greenland has sought diversification in markets and products to spread risk. Polar Seafood has its main markets in Scandinavia, China, and Japan.

Due to its vast geographic expanse, Greenland’s physical and telecommunications infrastructure is less interconnected and developed than in other parts of the Kingdom of Denmark. Greenland’s government-owned telecommunications company predominantly uses Ericsson equipment and announced that it would continue to do so for future upgrades, including 5G.

ESTABLISHING A COMPANY IN GREENLAND

Danish business (CVR) registration through indberet.virk.dk is required to conduct business in Greenland. Furthermore, companies planning to have employees must register as an employer with the employer register Sulinal: https://sulinal.nanoq.gl . In July 2018, an updated Companies Act entered into force that opened new ways of establishing a company, e.g., with reduced share capital requirements with the possibility of partial payment of the share capital, and the possibility of establishing entrepreneur companies with a share capital of $0.16 (DKK 1). Foreign companies may start their businesses in Greenland either through a subsidiary (both ApS and A/S type companies) or via a registered branch office.

ApS and A/S

An ApS (private limited company) or A/S (public limited company) is a separate legal entity with limited liability for its shareholders. The main difference between a private (ApS) and a public (A/S) limited company is that the shares of a private limited company cannot be issued publicly. Therefore, an ApS cannot be subject to listing or otherwise issue shares to the public to secure more capital. In addition, there are a few differences concerning capital and management requirements. Under the Companies Act, the minimum share capital requirement for an ApS is $6,350 (DKK 40,000). The minimum share capital requirement for an A/S is $63,500 (DKK 400,000). However, under the Danish Companies Act, it is possible to incorporate an A/S and only pay 25 percent of this amount (i.e., $15,875 (DKK 100,000)), leaving the company with a receivable on the shareholders for the outstanding amount (i.e., $47,625 (DKK 300,000)). A founder of a company may be foreign or Greenlandic individuals or corporate entities. Both ApS and A/S companies can be registered via the Danish Business Authority’s (DBA) online system. No registration fees are required.

REGISTERED BRANCH OFFICE

A foreign company may typically establish a registered branch office in Greenland instead of establishing a Greenlandic company. A branch of a foreign company may be created through an application with the DBA. Companies within the EU and European Economic Area (EEA) may set up a branch in Greenland and Denmark without further approval from the DBA. However, companies outside of the EU/EEA must obtain approval before registering.

A foreign company can do business in Greenland in a consecutive or non-consecutive 90-day period over 12 months without being required to register as a business.

GREENLAND TAX

The Greenlandic tax system is based on flat-rate taxation of business profits for both resident and non-resident corporations. Greenland operates with a net income principle, where the taxable income is calculated as a total net amount after deductions. The net income principle means that all income is treated equally, regardless of whether the income comes from employment, self-employment, investment income, or pensions, etc. As the rules of taxation for businesses can be complicated, potential investors may seek to retain guidance from the Greenlandic Tax Agency ( www.aka.gl ) or professional consultants.

Greenland has double taxation agreements with Denmark, the Faroe Islands, Iceland, Norway, Canada, the United States, Cayman Islands, Isle of Man, Bermuda, Jersey, and Guernsey. Greenland signed a Foreign Account Tax Compliance Act (FATCA) agreement with the United States.

The corporate income tax rate is 25 percent (down from 30 percent in 2019); an additional surcharge of 6 percent of the tax payable brings the total corporate tax rate to 26.5 percent.

The taxation of royalty payments is 30 percent. Greenland has no value-added tax (VAT) system, property tax, sales tax, or similar taxes. There are, however, some payable duties, such as taxes for cruise liners, ports duties, etc. There are four types of depreciation in the Greenlandic tax law. Buildings can be depreciated 5 percent annually. Ships, planes, and hydrocarbon prospecting can be depreciated 10 percent annually. Mineral licenses can be depreciated 25 percent each year for four years, and operating equipment can be depreciated at a rate of 30 percent annually. Assets with a cost of less than $15,875 (DKK 100,000) may be depreciated in the year of acquisition.

Greenlandic permanent establishments of foreign companies are taxed under the same rules and rates as Greenlandic resident companies. There is no branch profits remittance tax or other similar tax on branch profits. If a foreign company has more than one location or permanent establishment in Greenland, these are treated as separate taxable entities with no possibility of consolidation.

GREENLAND LABOR

The Greenlandic labor force was 26,978 persons in 2020. Average unemployment for 2020 was 5.3 percent – lower than the OECD average of 7.2 percent, and a decrease from 10.3 percent in 2014. Unemployment has decreased significantly, especially in Nuuk. According to the most recent report by Statistics Greenland, 49.2 percent of the Greenlandic workforce in 2019 had an education beyond municipal primary and lower secondary school. Of the workforce, 27.4 percent had vocational education, while 15.6 percent had a tertiary education. Among the unemployed, 84 percent have no education beyond municipal primary and lower secondary school.

In December 2012, Greenland passed legislation known as the “Large Scale Act,” which allows companies to use foreign labor during the construction phase of development when project costs exceed $795 million (DKK 5 billion) and workforce requirements exceed the local labor supply. The Act is intended for potential mining or infrastructure projects in Greenland. The Act lays out the framework for politically negotiated Impact Benefit Agreements (IBA) for the Government of Greenland and the employer to agree on the exact conditions of employment for foreign labor. The scale of Greenlandic labor utilized will be negotiated for each project and will vary depending on local capacity and the negotiated agreement for each project.

Foreign workers enjoy the same legal protections as Greenlandic workers, including the same $16 (DKK 100.47) per hour minimum wage and retention of the right to strike.

In 2021, Greenland implemented the Fast Track Scheme. This arrangement allows businesses in industries facing labor shortages to hire foreign workers who can begin working before they are approved for a work permit.

INVESTMENT IN NATURAL RESOURCES

Greenland possesses sizable discovered and undiscovered mineral resource potential. Some deposits are among the largest in the world. The country’s resources include iron and ferroalloys (iron, nickel, molybdenum, tungsten, and others), base metals (copper, zinc, and lead), specialty metals (rare earth elements, uranium, niobium, tantalum, and others), precious metals (platinum, gold, and others) and gemstones (diamonds, rubies, and sapphires). Mining industry experts anticipate that Greenland’s retreating ice will make the island’s rich stores of raw materials more easily accessible. However, exploration and exploitation projects will still face higher costs because of remote locations, lack of infrastructure, harsh climate, and distance to world markets. In 2021 the government implemented a limit of 100 ppm for uranium collocated with these deposits and granted the government authority to ban or limit mineral resource extraction for other types of radioactive elements.

With the 2009 SRA, Greenland gained rights to its mineral and hydrocarbon resources, and it acquired the regulatory authority over these on January 1, 2010. The SRA also created a revenue mechanism: if Greenland’s natural resources’ exploitation becomes commercially viable, Greenland will keep the first $11.92 million (DKK 75 million) in annual revenues derived from these resources. Additional revenues will be split equally between the Danish and Greenlandic governments. Denmark’s share will be transferred by deducting the equivalent amount from the annual block grant to Greenland of $636 million (DKK 4.0 billion). Once the block grant’s total value is reached, any additional revenue will be subject to negotiations between the Danish and Greenlandic governments. In 2021, the Greenlandic government determined it would no longer permit hydrocarbon exploration.

Most of Greenland’s identified rare earth deposits are licensed by the Mineral License and Safety Authority, and some have reached advanced stages of exploration. In 2021, Greenland dropped significantly in the Canadian Fraser Institute’s Investment Attractiveness Index from 41st out of 77 jurisdictions to 61st of 84 jurisdictions. The survey highlights the ban on exploration and production of uranium, political instability, and the lack of qualified officials as creating uncertainty for investors.

GREENLAND GENERAL BUSINESS INFORMATION

Information about the Greenlandic government can be found at http://naalakkersuisut.gl/en  . Information from the Greenlandic government on natural resource exploration and extraction can be found at http://www.govmin.gl  . Information about doing business in Greenland can be found at https://www.businessingreenland.gl/en  . Statistics on Greenland can be found at http://www.stat.gl/default.asp?lang=en  .

By law, private property can only be expropriated for public purposes in areas where the Greenlandic government has the competencies, in a non-discriminatory manner, and with reasonable compensation. There have been no recent expropriations of significance in Greenland.

In Greenland it is not possible to acquire private ownership of land, but a right of use may be sold for an area, i.e. if you buy property, you own the building, not the land on which it sits.

There have been no significant disputes over foreign investment in Greenland in recent years, however, in March 2022, Australia-based Greenland Minerals requested arbitration in its dispute with the Governments of Greenland and the Kingdom of Denmark over the future of its Kvanefjeld rare earths project. While it is common that disputes are settled in Greenlandic courts, the Danish Supreme Court remains the highest appeals court for disputes in Greenland. If a dispute is very specialized and within the purview of the Danish Administration of Justice Act, the parties involved can choose the Danish Maritime and Commercial Court as a court of first instance.

While Greenland’s democratic institutions and legal framework in general are strong, there have been some concerns about legislation being passed by parliament without significant hearing processes and public input.

Investment Climate information provided by US State Department