The Resources of the Competent Authorities in the Fight Against Money Laundering

Sarah Skov-Pedersen

Student thesis: Master thesis

Abstract

Lots of money are being laundered worldwide every year, approximately 2,5-5 % of world GDP. Up against 70 % of the money being laundered contains cross-border activities, and eventually banks are often subject to money laundering. As a consequence, to the enormous amount of money being laundered, the European Union strives to combat it. Through the money laundering directive, the European Union imposes the member states to combat money laundering in their respective country. Because of several cases in the European Union involving money laundering through banks, hereby also in Denmark, the project will focus on the Danish competent regulatory authority, and their resources. These are the resources that are supposed to make sure that the Danish banks are following the anti-money laundering regulation. The Danish competent regulatory authority has been subject to criticism from both FATF and the European Union regarding previous regulation. For this reason, the project will examine how the Danish competent authority, is given their resources, and will compare Danish law to the European directive. Following the directive every member state needs to make sure that their competent authority has adequate resources to combat money laundering. This requirement is not to be found anywhere in the Danish law, why the Danish authority is not secured an adequate amount of resources to combat money laundering. Even though the Danish government is assigned an adequate amount of resources, it is doubtful whether money laundering will be fought effectively in the future. The consequences that follows the production of money laundering are affecting society in a negative way, and that is why money laundering needs to be fought against effectively and efficiently. An efficiently approach will make sure that the utility of society will be maximized, while the amount of assigned resources will seem adequate. At the same time an efficient amount of resources will lower the banks incentive to not comply with the regulation. The Danish law does not have an efficient approach combating money laundering, and that is why the project will try to impose new initiatives to reach an efficient allocation of resources. The initiatives imposed will secure full compliance with the directive and at the same time a perfect amount of resources assigned the authority to effectively combating money laundering in the banks. But they will not secure an overall efficient solution for society, because the initiatives not fully pay attention to the way the banks should be compensated for them being subject to supervision.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2019
Number of pages86
SupervisorsKalle Johannes Rose