Danish offshore accounts target of latest crackdown

The Danish government is looking to hold bank executives accountable for illegal use of offshore accounts, according to a recent report by Bloomberg. The push is the result of Danish lenders becoming a hub for money launders.

The increased use of Danish banks for money laundering purposes has led Danish banks to become the center of criminal investigations. Although the banks state they are cooperating fully with these investigations, Danish authorities are pushing for more — they want legislatures to pass laws to allow for additional accountability.

How serious is the problem? A report by Denmark’s Financial Action Task Force found “extensive shortcomings” regarding compliance with global money laundering regulations. These shortcomings included a failure to coordinate enforcement efforts and “weak implementation of anti-laundering measures by banks.”

This report has provided additional support for the push for increased accountability measures. Danish Business Minister Rasmus Jarlov states the country has “considerable latitude” when it comes to determine fines and aims to make Denmark’s laws some of the “toughest in Europe.”

What does this mean for United States taxpayers that hold offshore accounts? It is important to ensure all foreign assets are in line with applicable tax obligations. A failure to properly report these assets to the Internal Revenue Service (IRS) can result in serious penalties including harsh monetary fees and potential imprisonment.

Additional accountability efforts abroad like those called for in the piece noted above could increase the chances foreign institutions will report the presence of assets to the IRS. This could lead to an investigation if the government is not already aware you hold this asset. You can reduce the risk of an investigation by proactively reporting these assets. Contact an attorney to discuss your options.

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