The Danish Financial Supervisory Authority recently concluded an extensive inspection of Danmarks Skibskredit A/S, focusing on the company’s framework for preventing financial crimes. Following the investigation conducted in late 2025, regulators identified several critical deficiencies in how the specialized ship finance institution manages its exposure to illicit financial flows. The inspection covered the organization’s risk assessment protocols, internal controls, and its adherence to the Money Laundering Act. Although the inherent risk of the business model is considered medium-low, the authorities issued multiple orders to ensure the firm meets legal standards. These mandates require the company to immediately revise its strategic approach to risk and enhance its operational procedures for customer monitoring.

Strategic Risk Assessment and Money Laundering Vulnerabilities

The foundation of any robust financial defense system is a comprehensive understanding of where criminal activity is most likely to occur within a specific business model. During the recent review of Danmarks Skibskredit A/S, the Danish Financial Supervisory Authority determined that the institution’s existing risk assessment was fundamentally flawed. The primary issue identified was that the company failed to separate its inherent risks from the mitigating measures it had already put in place. By blending these two distinct concepts, the company created a skewed view of its true vulnerability to being exploited by money launderers or those seeking to fund terrorist activities. A proper assessment must first look at the raw risk posed by the products, the geographic location of the customers, and the nature of the transactions before considering how well the current rules work to stop them. Without this clear separation, the management cannot accurately prioritize which business areas require the most intensive oversight or where resources should be allocated to prevent financial crime. The regulator emphasized that a risk assessment is not merely a formality but a critical tool for shaping the entire anti-money laundering strategy of the firm.

The ship financing sector involves high-value transactions and long-term relationships, which, while offering some stability, also present unique challenges for transparency. Danmarks Skibskredit A/S provides loans for vessels in both domestic and international markets, often involving complex ownership structures and cross-border movements of capital. While the Danish Financial Supervisory Authority acknowledges that the core product of ship financing is less prone to certain types of rapid money laundering compared to retail banking, the lack of a precise risk map remains a significant concern. The company has now been ordered to completely overhaul this document to ensure it reflects the actual landscape of its operations. This revision must account for the specific characteristics of its clients and the currencies involved, such as the Danish krone and the euro, without prematurely assuming that existing internal controls are sufficient to negate these risks. This ensures that the institution remains vigilant against evolving methods used by criminal organizations to move illicit funds through the maritime industry.

Deficiencies in Corporate Policies and Strategic Governance

A direct consequence of the inadequate risk assessment at Danmarks Skibskredit A/S was a corporate money laundering policy that lacked the necessary detail and strategic direction. A financial institution’s policy serves as the high-level roadmap for its defense against financial crime, setting the risk appetite and defining the responsibilities of the staff. However, the regulators found that the company’s policy did not specifically address the risks relevant to its unique market position. Because the policy was not grounded in an accurate assessment of inherent threats, it failed to set clear strategic goals for how the company would mitigate those specific dangers. This creates a systemic gap where the leadership’s vision for risk management does not align with the operational reality of the business. The Danish Financial Supervisory Authority noted that a risk management policy must determine objectives and the organizational anchoring of governance to be effective. Without these elements, there is a heightened possibility that the firm’s efforts to combat illicit activity will be uncoordinated and ineffective.

The regulator has therefore mandated that the company rewrite its money laundering policy to align with a new, more accurate risk assessment. This updated policy must include principled decisions on how the organization should be structured to address the specific threats it faces. This includes defining how the board of directors and senior management will oversee the anti-money laundering framework and ensuring that the company’s strategic goals are clearly communicated throughout the entire hierarchy. By mandating these changes, the authorities are looking to move the firm toward a more proactive stance, where risk management is integrated into the core business strategy rather than treated as a peripheral compliance task. Strengthening the governance structure is essential for ensuring that the firm can adapt to new regulations and emerging threats in the global financial system, especially given the international nature of the shipping industry and the various jurisdictions in which its clients operate.

Strengthening Operational Procedures and Customer Due Diligence

Beyond the high-level strategy, the inspection revealed significant weaknesses in the day-to-day operational procedures at Danmarks Skibskredit A/S. For an anti-money laundering framework to work, the employees responsible for monitoring transactions and verifying customer identities must have clear, detailed instructions. The Danish Financial Supervisory Authority found that in many cases, the company’s business procedures were not sufficiently descriptive. This lack of detail leaves too much room for interpretation, which can lead to inconsistent application of rules and the potential for suspicious activity to go undetected. One particularly concerning gap was the absence of a formal procedure for handling situations where customers fail to respond to requests for information. Customer due diligence is a continuous process, and when a client becomes uncooperative or fails to provide necessary documentation, the institution must have a predefined set of actions to take, ranging from increased monitoring to the termination of the business relationship.

To rectify these operational shortcomings, the company has been ordered to implement specific procedures for managing non-responsive clients. Furthermore, the regulators have demanded that the firm’s procedures for match control and the investigation of alerts be made fully operational. These procedures must specify the exact activities that employees are expected to perform when a potential match against a sanctions list occurs or when an automated system triggers a red flag. Clear guidelines are necessary to ensure that investigations are thorough, documented, and reported to the relevant authorities, such as the Money Laundering Secretariat, when necessary. By tightening these controls, Danmarks Skibskredit A/S will be better equipped to fulfill its role as a gatekeeper in the financial system. These improvements are vital for maintaining the integrity of the Danish financial sector and ensuring that specialized lenders are not used as a weak link for the placement or layering of illicit funds.

Regulatory Expectations for Specialized Financial Institutions

The actions taken by the Danish Financial Supervisory Authority against Danmarks Skibskredit A/S serve as a reminder that all financial entities, regardless of their size or specialized focus, must maintain rigorous anti-money laundering standards. While the shipping finance sector may not deal with the high volume of small-scale transactions seen in consumer banking, the sheer scale of individual loans and the global nature of maritime commerce necessitate a sophisticated approach to risk management. The orders issued to the firm highlight the regulator’s shift toward demanding more granular and honest assessments of risk. It is no longer acceptable for institutions to point to their existing controls as a reason to downplay their inherent vulnerabilities. Instead, they must demonstrate a deep understanding of the potential threats and a willingness to build a defense that is specifically tailored to those challenges. This move toward a more transparent and evidence-based risk model is part of a broader European effort to harmonize and strengthen financial oversight.

In the future, the success of Danmarks Skibskredit A/S in meeting these regulatory requirements will depend on its ability to foster a culture of compliance that permeates all levels of the organization. This involves not only updating documents and procedures but also providing ongoing training to staff and ensuring that internal audit functions are truly independent and critical. The institution must now work to demonstrate that it has integrated these lessons into its daily operations and that its strategic management of financial crime risk is both targeted and effective. As the Danish Financial Supervisory Authority continues to monitor the firm’s progress, the case stands as a benchmark for other specialized lenders in the region. Maintaining trust in the financial system requires a commitment to transparency and a relentless focus on preventing the misuse of financial services for criminal gain. By addressing these foundational issues now, the firm can better protect its long-term stability and its reputation in the international shipping market.

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Key Points

• The Danish Financial Supervisory Authority conducted an inspection of Danmarks Skibskredit A/S in late 2025 focusing on anti-money laundering compliance.
• Regulators identified a medium-low inherent risk but issued orders due to an inadequate assessment of the company’s true vulnerabilities to financial crime.
• The company failed to separate its inherent risks from its mitigating measures and lacked specific procedures for handling uncooperative customers.
• Mandatory orders require a total revision of the firm’s risk assessment and money laundering policy to ensure strategic goals are clearly defined.
• Operational failures included insufficiently detailed internal controls for match investigations and a lack of clear instructions for employees.

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Related Links

• Danish Financial Supervisory Authority Official Website
• Financial Action Task Force Maritime Sector Guidance
• Danish Money Laundering Act Official Documentation
• European Banking Authority Anti-Money Laundering Standards
• Danish Money Laundering Secretariat Reporting Guidelines

Other FinCrime Central Articles About Danish FSA

• Danish Regulator Updates 4 Key Areas To Boost Local Banks
• Danish FSA Identifies Major Risk Failures at Safenetpay ApS
• Saxo Bank Fined 46 Million Dollars for Anti-Money Laundering Failures

Source: Fynanstilsynet

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