Translation from original text in Danish. In case of discrepancies, the Danish version prevails.
The vast majority of companies are aware of the risk of being used for money laundering and terrorist financing. But often, the managements lack adequate focus on what they must do in practice so that the companies are in compliance with the anti-money laundering rules. This is what the Financial Supervisory Authority concludes in a newsletter prepared on the basis of 55 anti-money laundering inspections from mid-2017 to the end of 2018.
"It is the task of the management to thoroughly assess how the company can be used for money laundering or terrorist financing. If management does not engage themselves and make the right decisions, there is a risk that the company will not meet the requirements in the anti-money laundering legislation and that it can be used for money laundering or terrorist financing," says Head of Department Stig Nielsen from the Financial Supervisory Authority.
Based on their risk assessment, management must decide on the organisation, staffing, systems and procedures of the company in relation to preventing money laundering and terrorist financing. Management must also ensure effective internal controls, the Financial Supervisory Authority states in the newsletter.
Eight typical violations
In the newsletter, the Financial Supervisory Authority further describes the eight types of violations of the money laundering legislation, which most often have resulted in orders or other supervisory responses in connection with the 55 inspections:
- Tasks are not performed from a risk-based approach.
- Risk assessments are insufficient.
- Policies are not sufficiently operational.
- Procedures are not carried out in sufficient detail.
- KYC procedures are insufficient.
- Customers and transactions are not thoroughly monitored.
- Correspondent banks are not adequately assessed.
- Separation of duties is insufficient.
About the supervision of compliance the anti-money laundering rules
Since mid-2017, the Financial Supervisory Authority has significantly strengthened its efforts in the money laundering area in connection with the additional resources allocated to AML/CTF supervision by the Danish Parliament (Folketinget). Most recently, in March 2019, a political majority reached an agreement to increase the efforts against financial crime, and in connection with this, the Financial Supervisory Authority was strengthened by additional resources and competencies. Approximately 1,500 companies are subject to AML/CTF supervision of the Financial Supervisory Authority.
The Financial Supervisory Authority is supervising whether the companies are in compliance with the statutory requirements, and in particular that companies know their customers and monitor the customers' transactions. Therefore, the Financial Supervisory Authority must monitor if companies meet their obligations regarding the prevention of money laundering and terrorist financing. The police are responsible for investigating cases of money laundering and terrorist financing.
The Financial Supervisory Authority expects to carry out 35 anti-money laundering inspections in 2019 and to follow up on the inspections from 2018. The Financial Supervisory Authority will regularly provide information concerning the overall conclusions of the inspections.