Cash payment limit lowered: everything you need to know

From 1 March 2024, an important amendment to the Danish Anti-Money Laundering Act (hvidvaskloven) comes into force, affecting businesses throughout Denmark. The change will affect how businesses handle cash payments, and it has significant consequences for regulatory compliance and financial operations. Let us look at the details and explore what this means for your business.

Key changes

The amendment reduces the limit for cash payments from DKK 20,000 to DKK 15,000. This means that businesses will be prohibited from accepting cash payments of DKK 15,000 or more. Failure to comply with this rule can result in fines.

Reason for the change

The change is being introduced in response to the phasing out of the 1,000-krone banknote by 31 May 2025. With this banknote being phased out, businesses that handle cash transactions will be at greater risk of being used for money laundering during the phase-out period.

Who is affected?

The cash payment ban applies to all businesses except those covered by section 1(1) of the Anti-Money Laundering Act. These include entities such as financial institutions, legal professionals, auditors, estate agents and tax advisers. Private individuals are not subject to the cash payment ban.

Fines

Businesses that breach the cash payment ban may face fines, typically equivalent to 25% of the amount received above DKK 15,000, with a minimum fine of DKK 10,000.

What counts as a cash payment?

In the context of the law, cash payments are transactions involving physical currency. This excludes payments made by debit or credit card and bank transfers.

Consequences for businesses

The reduced cash payment limit calls for a review of existing payment procedures and systems to ensure compliance. Businesses should implement measures to track and monitor cash transactions, train employees in the new rules and update their policies accordingly.

Your responsibility

The upcoming changes to the cash payment rules underline the importance of vigilance and compliance in financial operations. Businesses must adapt to these regulatory changes to reduce the risk of non-compliance and protect their operations against potential sanctions. Stay informed, follow the rules and make sure your business is prepared for the upcoming changes.