Have some Danish (FAQs), bank customers!
Are you a customer of a financial company?
Here you will find the answers to the most frequently asked questions we receive from customers in financial companies.
The Money Laundering Act requires that i.a. the financial companies, e.g. the banks, know their customers and check the identity of the customers. They must also monitor the transactions that customers complete. If they find the suspicious transactions, they must notify the Money Laundering Secretariat under the Public Prosecutor for Special Economic and International Crime (SØIK). This is a very important part of the fight against crime, not least serious crime.
The Money Laundering Act is largely based on EU directives on the prevention of money laundering and terrorist financing. The rules that banks and other financial companies in Denmark must comply with are thus largely the same for all EU countries. This also means that the requirements that Danish bank customers meet with from their banks will also be set by foreign banks towards their customers, of course adapted to the individual countries’ national conditions.
The Danish FSA regularly receives inquiries from customers who wonder that they should identify themselves with e.g. passport or driver’s license. Customers also wonder why the financial companies ask a number of personal questions about the customers’ personal financial matters with reference to the Money Laundering Act.
As a customer, it can be good to know a little about the background for you being asked to provide the information.
On this page, you can therefore get answers to a number of the questions you may have as a customer.
1) Why does my bank ask for a copy of passport and driving license?
The bank, like other financial companies, is obliged to obtain identity information on all its customers. For natural persons, the bank must obtain a name and civil registration number. or an equivalent number if the customer does not have a CPR number.
The bank must verify the identity information through an independent and reliable source. This means that the control of the customer’s identity must be done through a source other than the customer himself. It is therefore not enough for the customer to provide the information himself. Such a source can e.g. be passport, driver’s license, health card, information from SKAT or baptismal certificate. Often, based on a specific assessment, the bank will ask for a copy of several such documents to be completely sure.
It is the bank that must assess how much and what documentation, data or information it needs in order for the control of a customer’s identity information to be sufficient. The legislation does not set specific requirements for what documentation the bank must obtain. This is a specific assessment that the bank itself must make in order to be able to be sure of the customer’s identity.
2) I am a board member of an association, why do I have to hand over my identity information to the association’s bank when I myself am not a customer of the bank?
When an association has an account in a bank, the bank must know those who ultimately control the association’s account. This means that the bank must identify who the association’s so-called “real owners” are.
In the vast majority of cases, there are no natural persons who own or control the association sufficiently for them to be perceived as “real owners”. In these cases, the bank must instead consider the association’s day-to-day management as the “real owner”. In associations, this will often be either the association’s board or executive board.
Even when companies are customers, the bank must have information about the real owners.
Whether it is an association or a company, the bank must obtain identity information on all the beneficial owners and take reasonable steps to verify the identity of the beneficial owners. This can e.g. This is done by the bank asking for a copy of the passport and / or driving license from the real owners.
3) Why does my bank ask personal questions about my finances or my transactions?
The bank is obliged to have a good knowledge of all its customers and in this connection also of what the customers want to use the bank for. The bank must know this in order to be able to monitor the customer relationship in order to keep an eye on whether a customer is using the bank for money laundering or terrorist financing. This is a requirement under the Money Laundering Act.
The obligation implies that the bank must know why the customer wants the customer relationship in question in the bank and what activities the customer expects to have in the bank. The bank therefore needs to obtain information about the customer in order to be able to assess whether these are “expected” activities for the customer. The information can e.g. be income ratios, expected foreign payments and the extent of cash deposits.
This enables the bank to assess whether the customer relationship in itself has a legitimate purpose. At the same time, it helps the bank to determine whether the customer’s transactions or actions deviate from the bank’s knowledge of the customer relationship.
If a customer makes transactions that are unusual for the customer, the bank is obliged to investigate this further. This is necessary to find out whether the transaction is suspicious and whether the bank is therefore obliged to notify the Money Laundering Secretariat at SØIK.
You as a customer can therefore experience that your bank e.g. asks what you should use the money for if you withdraw a large amount, where the money comes from, if a large amount is deposited in your account, or who the money should go to if you transfer a large amount abroad.
4) Why does my bank ask if I am a politically exposed person or a close relative of a politically exposed person?
The bank is obliged to know its customers and carry out an individual risk assessment of all customer relationships.
Politically exposed persons (PEPs) are persons who hold a special public office and as a result may be susceptible to bribery and other corruption. Although we in Denmark have very few cases of corruption and bribery, PEPs worldwide pose a higher risk of money laundering and terrorist financing. This means that the bank must carry out a stricter control of their customer relationships with PEPs. This is not a suspicion of Danish officials or others with public office, but just an extra security measure, and the rules are the same throughout the EU.
The legislation does not impose obligations on PEPs, their family members or close business partners, but the PEPs, their family members and close business partners must be aware that they may be asked to explain or document their finances or a transaction to the bank to a greater extent.
5) Can my bank ask for my credentials again?
Yes, the banks have a duty to obtain new information and documentation if the bank becomes aware that the previously obtained information may be incorrect or insufficient, or the bank assesses that the customer’s circumstances have changed. In addition, the bank must keep customers’ information and documentation up to date. In this connection, it may be the case that the bank must obtain identification documents again, if e.g. previous identification documents have expired in the meantime.
6) Can my bank require a copy of the identification documents?
Yes, the bank has a duty to keep a copy of the documentation for the customer’s identity information and other information that the bank has obtained about the customer.
The bank must be able to document to the Danish Financial Supervisory Authority that the bank knows its customers sufficiently. Therefore, the bank cannot be content with an employee knowing the customer for a number of years or from a private source.
Banks are required to keep the information, documents and records they have obtained for at least five years after the termination of the customer relationship.
7) Do I have to provide information again if I change bank?
Yes, the information that the bank collects about you is basically for the bank’s own use. However, it may be the case that the bank is obliged to pass on the information to e.g. authorities for the effective prevention of money laundering.
This means that if you are a customer of several banks, you must identify yourself in all the banks, and the banks in question must also obtain the information they deem necessary.
It is not certain that you must provide the same information in all banks, because it is a concrete assessment by the individual bank what information and what documentation the bank needs you to provide.
8) What happens if I do not return the information to my bank?
The bank is obliged to know its customers well. This requires the bank to obtain a range of information about the customer. In the first instance, the bank must obtain the information from the customer itself. The information must then be checked by the bank through a reliable and independent source, e.g. a passport or a driver’s license.
The bank must do what it can to obtain the information. In the vast majority of cases, the primary source is the customer himself.
If the bank cannot obtain the information from the customer itself, the bank must try to obtain the information in another way. However, if this is not possible and the customer does not want to provide the information, the bank may have exhausted all possibilities to obtain the necessary information. In these cases, the bank may conclude that it is not possible for it to know the customer and the customer relationship well enough. In such cases, the bank is obliged to terminate or terminate the customer relationship, and in this connection, the bank may not carry out further transactions or activities for the customer.
If a customer does not want to provide the information the bank requests, e.g. identity documents, the bank must also assess whether this in itself gives rise to a suspicion of money laundering or terrorist financing.
9) Can I be reported to the police by my bank?
The individual bank is obliged to monitor customers’ transactions and other activities via the bank in order to uncover whether there may be a suspicion that the transactions or activities are related to money laundering or terrorist financing.
If a bank discovers a transaction that seems suspicious, the bank must investigate the matter further. It can e.g. be that a large sum of money enters a customer’s account. In that case, the bank will typically contact the customer to find out more about where the money comes from, and to request documentation for this. If it turns out that the money e.g. originating from an inheritance or a house sale, it will typically not be suspicious.
If the bank’s investigation cannot disprove that it is a suspicious transaction, the bank is obliged to notify the Money Laundering Secretariat at SØIK.
The Money Laundering Secretariat then assesses what should happen next. The bank does not have to decide whether the customer has actually committed illegalities. The notification is also not a police report, and you are not a criminal just because you appear in a notification.
The bank has a duty of confidentiality regarding notifications and may not tell the customer that it has made a notification about the customer.
10) I feel badly treated by my bank, where can I complain?
As a customer, you can contact the person responsible for complaints at your bank, who can help you in disputes with the bank. All financial companies that have contact with private customers must appoint a complaint manager. The person responsible for complaints ensures the customer easy access to complain about the company’s products, services or case processing and ensures that complaints are handled objectively and within a reasonable time. The liaison officer’s contact information can be found on the bank’s website or by asking the bank adviser.
As a customer, you can also complain about your bank to the Financial Appeals Board. You will find further information on the Appeals Board’s website here .
The Danish FSA cannot intervene in specific cases between a customer and his bank and is thus not an appeal body in relation to the banks’ actions towards the individual customers. The Danish Financial Supervisory Authority can also not assist a customer in their contact with the bank by e.g. to contact the bank in question in order to clarify any questions, pass on the customer’s views, etc.
You can read more about the appeal possibilities on the Danish Financial Supervisory Authority’s website here .
11) Do the rules also apply to mortgage banks and pension funds?
Yes, the rules apply to all companies covered by the Money Laundering Act. This means that i.a. banks, savings banks, co-operative funds, mortgage banks, stockbroking companies as well as life insurance companies and cross-border pension funds are subject to the obligations of the Money Laundering Act.
The same applies to other types of companies, e.g. currency exchangers, money transfer companies, lending companies and leasing companies operating financial leasing.
They are all obliged to i.a. to conduct customer due diligence procedures and verify their customers ‘identity information, as well as monitor customers’ transactions and activities in order to uncover whether there is a suspicion of a connection to money laundering or terrorist financing.
12) Where can I read more?
You can read more about the money laundering rules and the Danish Financial Supervisory Authority’s efforts to combat money laundering and terrorist financing on the Danish Financial Supervisory Authority’s website here .
The above questions are answered based on the Money Laundering Act, which you can find here . Chapter 3 of the Money Laundering Act deals with customer knowledge procedures.
The Danish FSA has prepared a guide to the Money Laundering Act, which deals with how companies and individuals can meet the requirements of the Money Laundering Act, and the guide provides a detailed explanation of the rules in the Money Laundering Act. The guide to the Money Laundering Act can be found here
Actually, the page is a lot more customer friendly – all but the first question requires expansion so you can easily navigate to any particular question you might have.
Categories: Anti-Money Laundering Finanstilsynet Updates Frequently Asked Questions (FAQ) Guidance