As of March 1, 2024, an important amendment to the anti-money laundering law came to an affect, impacting businesses across Denmark. This change will affect how businesses handle cash payments and carries significant implications for compliance and financial operations. Let's delve into the details and explore what this means for your business.
Key Changes
The amendment entails a reduction in the threshold 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 regulation can result in fines.
Reason for Change
The amendment is being introduced in response to the phasing out of the 1,000-kroner banknote by May 31, 2025. With the elimination of this banknote, businesses that deal with cash transactions will be at a higher risk of being used for money laundering activities during the phasing-out period.
Who is Affected
The cash payment prohibition applies to all businesses, except those covered under Section 1, Paragraph 1 of the anti-money laundering law. This includes entities such as financial institutions, legal professionals, accountants, real estate agents, and tax advisors. Private individuals are not subject to the cash payment prohibition.
Penalties
Businesses found in violation of the cash payment prohibition may face fines, typically amounting to 25% of the received amount exceeding the DKK 15,000 threshold, with a minimum fine of DKK 10,000.
What Constitutes a Cash Payment
In the context of the law, cash payments refer to transactions involving physical currency. This excludes payments made through debit or credit cards and bank transfers.
Implications for Businesses
The reduced threshold for cash payments necessitates a review of existing payment procedures and systems to ensure compliance. Businesses should implement measures to track and monitor cash transactions, educate employees on the new regulations, and update policies accordingly.
Your responsibility
The upcoming changes to cash payment regulations underscore the importance of vigilance and compliance in financial operations. Businesses must adapt to these regulatory changes to mitigate the risk of non-compliance and safeguard their operations against potential penalties. Stay informed, stay compliant, and ensure that your business is prepared for the changes ahead."