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Now companies are not allowed to receive cash payments of more than DKK 20,000

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Legal news
calendar 1 December 2021
globus Denmark

In the summer of 2021, the cash ban in section 5 of the Money Laundering Act was lowered from DKK 50,000 to DKK 20,000. This means that companies not covered by the rules of the Money Laundering Act may only receive cash payments for services or goods of less than DKK 20,000 from the same customer. The ban applies regardless of whether the customer pays the amount all at once or divides the payment into several separate payments, provided that they are interconnected. Violation of the ban could result in a fine.

The Danish government decided to lower the cash ban to make it more difficult to perform money laundering in the future. The change in the cash ban has occurred because the Money Laundering Secretariat has figured out that a large proportion of cash payments are made with money obtained illegally. The ban means, for example, that a cash payment of DKK 20,000 or more is no longer legal when buying a used car, works of art or the like.

If a customer refuses to pay an amount of DKK 20,000 or more by bank transfer, card transaction or similar payment method, the seller can withdraw from the transaction without breaching the agreement.

The cash ban only applies to companies not covered by the other rules of the Money Laundering Act, as the law's rules on reporting already cover such companies.

How to find out when the ban has been violated

When a customer buys several goods or services, emphasis is placed on whether the purchase occurs during one or more visits to the company. For example, it is considered a new trade if the customer returns to the company later the same day, without having an agreement with the company about it and buys more goods. The limit for a new cash payment will thus again be less than DKK 20,000.

What happens if you break the ban?

In case of violations, the company can be fined. The average amount of a fine for violating the cash ban is DKK 17,000. The fine is at least DKK 10,000, and otherwise, it is, as a starting point, set to be 25% of the amounts that exceed the limit.

If a breach of the ban is suspected, you can notify the Money Laundering Secretariat. If the secretariat finds the notification justified, the secretariat forwards the case to the Public Prosecutor for Special Economic and International Crime (SØIK), who can investigate and bring the case forward.

It is important to be aware of how to avoid violating the cash ban, so that you do not risk contributing to money laundering and avoid getting a fine.

IUNO’s opinion

IUNO recommends that companies have a fixed internal policy that ensures that they do not receive cash payments of DKK 20,000 or more. The policy can contain rules that you may not accept payments from the same customer, which in total exceed DKK 19,999 if you received the payments within a shorter period.

Please note that the ban applies to payments of DKK 20,000 or more. A payment of DKK 20,000 in cash will therefore be a violation of the ban.

[Act amending the law on a guarantee fund for non-life insurance companies, the law on investment associations, etc., the Money Laundering Act, and various other laws of 1 July 2021 (Increased investor protection in cross-border marketing of investments and strengthened supervision of players in the digital financial services market, etc.) ( retsinformation.dk)]

The Danish government decided to lower the cash ban to make it more difficult to perform money laundering in the future. The change in the cash ban has occurred because the Money Laundering Secretariat has figured out that a large proportion of cash payments are made with money obtained illegally. The ban means, for example, that a cash payment of DKK 20,000 or more is no longer legal when buying a used car, works of art or the like.

If a customer refuses to pay an amount of DKK 20,000 or more by bank transfer, card transaction or similar payment method, the seller can withdraw from the transaction without breaching the agreement.

The cash ban only applies to companies not covered by the other rules of the Money Laundering Act, as the law's rules on reporting already cover such companies.

How to find out when the ban has been violated

When a customer buys several goods or services, emphasis is placed on whether the purchase occurs during one or more visits to the company. For example, it is considered a new trade if the customer returns to the company later the same day, without having an agreement with the company about it and buys more goods. The limit for a new cash payment will thus again be less than DKK 20,000.

What happens if you break the ban?

In case of violations, the company can be fined. The average amount of a fine for violating the cash ban is DKK 17,000. The fine is at least DKK 10,000, and otherwise, it is, as a starting point, set to be 25% of the amounts that exceed the limit.

If a breach of the ban is suspected, you can notify the Money Laundering Secretariat. If the secretariat finds the notification justified, the secretariat forwards the case to the Public Prosecutor for Special Economic and International Crime (SØIK), who can investigate and bring the case forward.

It is important to be aware of how to avoid violating the cash ban, so that you do not risk contributing to money laundering and avoid getting a fine.

IUNO’s opinion

IUNO recommends that companies have a fixed internal policy that ensures that they do not receive cash payments of DKK 20,000 or more. The policy can contain rules that you may not accept payments from the same customer, which in total exceed DKK 19,999 if you received the payments within a shorter period.

Please note that the ban applies to payments of DKK 20,000 or more. A payment of DKK 20,000 in cash will therefore be a violation of the ban.

[Act amending the law on a guarantee fund for non-life insurance companies, the law on investment associations, etc., the Money Laundering Act, and various other laws of 1 July 2021 (Increased investor protection in cross-border marketing of investments and strengthened supervision of players in the digital financial services market, etc.) ( retsinformation.dk)]

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