Chapter

DENMARK

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
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 bandsDenmark participates in the ERM II and maintains the spot exchange rate between the Danish krone and the euro within margins of ±2.25% around the central rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlNo.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Measures have been taken to freeze accounts belonging to the Taliban and members of terrorist groups. Persons or organizations whose accounts are frozen will not be able to engage in any financial transactions through these accounts. No accounts have yet been frozen, however. These measures have been taken in accordance with the relevant UN and EU resolutions.
In accordance with UN sanctionsIn accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained on the making of payments and transfers for current international transactions with respect to Haiti, Myanmar, Zimbabwe, and certain individuals associated with the former governments of Iraq and the former Republic of Yugoslavia. In accordance with EU Regulation No. 147/2003, effective January 27, 2003, financing of and financial assistance related to military activities in Somalia are prohibited. Restrictions also apply on transfers with respect to the Taliban and individuals and organizations associated with terrorism.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesExports and imports of banknotes exceeding the equivalent of €15,000 must be declared to customs.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency 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 originating in Japan and the Republic of Korea require a license. A larger number of items require a license when originating in or purchased from Albania, Bangladesh, Bulgaria, China, Croatia, the Czech Republic, Hungary, the Democratic People’s Republic of Korea, Mongolia, Poland, Romania, the Slovak Republic, Sri Lanka, 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. Special rules apply on agricultural products.
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 certain metals in waste or scrap form. Special rules apply on exports of waste in general.
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 transactionsYes.
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 locally by nonresidentsPurchases require approval from the Ministry of Justice, except in the case of acquisitions by (1) persons who were formerly residents of Denmark for at least five years; (2) EU and EEA nationals working in Denmark who are in possession of a valid EU/EEA residence permit and EU- or EEA-based companies operating in Denmark for residential or business purposes; and (3) EU nationals who are entitled to reside in Denmark in accordance with Directives 90/364/EEC, 90/365/EEC, and 93/96/EEC.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsThe Consolidated Act contains prudential regulations covering capital adequacy, liquidity, and large exposures. These regulations are in accordance with the relevant EU directives.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsA 60% limit applies to holdings of foreign equity securities (denominated in euros) by private insurance companies and pension funds. The limit is 20% for holdings in other currencies.
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 2003
Arrangements for payments and receiptsJanuary 27. Financing of and financial assistance related to military activities in Somalia were prohibited.

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