Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

DENMARK

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of January 31, 2005)

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 financial transactions with respect to (1) Al-Qaida, Haiti, Iraq, and Libya; (2) the Taliban and individuals and organizations associated with terrorism, certain individuals associated with the former governments of Iraq and the former Federal Republic of Yugoslavia, and, effective October 1, 2004, persons indicted by the International Criminal Tribunal of the former Federal Republic of Yugoslavia (ICTY); and (3) certain members of the governments of Myanmar and Zimbabwe and associates. Financing of and financial assistance related to military activities in the Republic of Congo, Liberia, Myanmar, Somalia, Sudan, and Zimbabwe are prohibited.
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.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyYes.
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 measuresIn general, import policy is coordinated with the European Community.
Negative listDirect and indirect imports of rough diamonds and certain forestry products from Liberia are prohibited in accordance with the UN Security Council Resolution No. 1478. Also, restrictions apply on imports of endangered species of wild fauna and flora and pelts of certain wild animals. Imports of certain goods may also be prohibited due to technical requirements.
Open general licensesImport licenses are required for some goods (e.g., certain iron and steel imports from certain countries and certain agricultural products) for surveillance and safeguard purposes.
Licenses with quotasLicenses are required for imports of certain agricultural products including rice, sugar, milk products, beef, fruits, and vegetables. Effective January 1, 2005, quotas on textile and clothing imports from WTO members are eliminated with the expiration of the WTO Agreement on Textiles and Clothing. Also, effective that date, licenses are no longer required for imports of footwear from Vietnam and imports of porcelain and footwear from China.
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 or 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 ECC directives. However, exceptions (2) and (3) listed above do not apply to vacation homes for personal use.
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 2004
Arrangements for payments and receiptsOctober 1. Certain restrictions were imposed against persons indicted by the ICTY.
Changes During 2005
Imports and import paymentsJanuary 1. Import quotas on textiles and clothing from WTO members were eliminated with the expiration of the WTO Agreement on Textiles and Clothing.
January 1. The licensing requirement for imports of footwear from Vietnam and imports of porcelain and footwear from China was lifted.

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