Chapter

DENMARK

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 1, 1967.
Exchange Arrangement
CurrencyThe currency of Denmark is the Danish krone.
Exchange rate structureUnitary
Classification
Pegged exchange rate within horizontal bandsAs of January 1, 1999, Denmark became a participant in the ERM II and maintains the spot exchange rate between the Danish krone and the euro within margins of 2.25% above or below the central rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlNo.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsDenmark maintains exchange restrictions against Iraq and against Libya.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Open general licensesA few items require a license when originating in Japan and the Republic of Korea. A larger number of items require a license when originating in or purchased from Albania, Bulgaria, China, the Czech Republic, Hungary, the Democratic People’s Republic of Korea, Mongolia, Poland, Romania, the Slovak Republic, the Baltic countries, Russia, the other countries of the former Soviet Union, and Vietnam.
Licenses with quotasLicenses are required for imports of textiles, toys, and footwear.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExcept for certain items subject to strategic controls, licenses are required only for exports of waste and scrap of certain metals.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsPurchases are prohibited, except in the case of acquisitions by: (1) persons who have formerly been residents of Denmark for at least five years; (2) EU nationals working in Denmark and EU-based companies operating in Denmark for residential or business purposes; and (3) non-EU nationals who either are in possession of a valid residence permit or are entitled to stay in Denmark without such a permit for residential or active business purposes.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutionsThe Consolidated Act contains prudential regulations covering capital adequacy, liquidity, and large exposures. These regulations follow the relevant EU directives.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadA 40% limitation on holdings of foreign equity securities by private insurance companies and pension funds is in effect.
Currency-matching regulations on assets/liabilities compositionInsurance companies are regulated by the “balance principle,” which determines that consistency must be ensured between assets and liabilities denominated in the same currency.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 1. Denmark became a participant in the ERM II.

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