Money Laundering Within the Danish Corporate Registers

Abstract

This thesis examines how Denmark administers and monitors the identification of beneficial owners in Danish corporate registers to meet EU requirements and reduce the risk of money laundering. The thesis integrates legal and economic analyses to assess whether the allocation of resources to Danish corporate registers is effective in light of the EU's Fourth Anti-Money Laundering Directive, particularly Articles 30(3) and 48(2). These articles set out the requirements for the registration of beneficial owners and the allocation of adequate resources for control functions. Through a detailed analysis of both legal and economic aspects of the issue from a societal perspective, the thesis highlights the challenges and opportunities inherent in current regulation and practice. It focuses on how legal standards and economically rational resource allocation can be aligned to better manage the dynamic risks associated with money laundering. The thesis employs a functional approach, combining legal and economic principles, to optimize the current resource allocation to effectively combat sophisticated attempts to conceal illegal ownership structures. The outcome of this holistic analysis has contributed to a deeper understanding of the complex interactions between law, economics, and the practical challenges of maintaining effective control systems in the fight against money laundering. The legal analysis concludes that Denmark complies with Article 30(3) of the EU's Fourth Anti-Money Laundering Directive but fails to meet Article 48(2) concerning adequate resources. Subsequently, the economic analysis demonstrates how money laundering adversely affects society as an externality, which can be addressed through a responsive risk-based approach. The thesis has thus produced functional improvements in the structure behind anti-money laundering efforts in Denmark through a functional approach. The analysis has suggested ways in which Denmark can enhance its strategies for identifying beneficial owners, not only to meet EU requirements but also to ensure a more robust and responsive approach that can adapt to new threats in the financial landscape. Consequently, the thesis concludes that a centralized unit, a financial reserve, and an increased focus on digitalization should be introduced, leading to more optimal resource allocation and thereby reducing the risk of money laundering.