Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

DENMARK

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 1, 1967.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
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 Al-Qaida, members of other terrorist groups, certain individuals associated with the former Federal Republic of Yugoslavia, and persons indicted by the International Criminal Tribunal for the Former Yugoslavia (ICTY); and to certain individuals and entities associated with Belarus, the Democratic Republic of the Congo, Côte d’Ivoire, the Islamic Republic of Iran, Iraq, Lebanon, Liberia, Myanmar, Sudan, and Zimbabwe. 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.
Other security restrictionsIn accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained on financial transactions with respect to Haiti, Iraq, and Libya (prohibiting the satisfaction of certain claims). Financing of and financial assistance related to military activities in certain countries are prohibited.
References to legal instruments and hyperlinksn.a.
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 marketThere is a well-functioning forward exchange market.
References to legal instruments and hyperlinksDanmarks Nationalbank: www.nationalbanken.dk/DNUK/MonetaryPolicy.nsf/side/Exchange_Rate_Mechanism__ERM_II!OpenDocument.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Regional arrangementsDenmark is a member of the EU.
Administration of controlNo.
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 exportsYes.
On importsYes.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
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 EU.
Negative listDirect and indirect imports of rough diamonds and certain forestry products from Liberia are prohibited in accordance with UN Security Council Resolution No. 1478. 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. The EU entered into a memorandum of understanding (MoU) with China and elaborated on the MoU with minutes from a consultation that approved quotas on exports to the EU of 10 textile products, covering the period June 11, 2005, to end-2007. Licenses are required for textile imports from Belarus, the Democratic People’s Republic of Korea, Kosovo, and Montenegro.
Import taxes and/or tariffsNo.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
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.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentControls apply on the (1) ownership of Danish flag vessels by non-EU residents, except through an enterprise incorporated in Denmark; (2) ownership by non-EU residents of one-third or more of a business engaged in commercial fishing; (3) ownership of an air transport license, which is reserved for EU residents; and (4) investment in accounting services by non-EU residents and in legal services by nonresidents.
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) non-EU nationals who are entitled to reside in Denmark in accordance with EU directives. However, exceptions (2) and (3) listed above do not apply to vacation homes for personal use.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
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
Insurance companies
Limits (max.) on securities issued by nonresidentsA 60% limit applies to holdings of foreign equity securities (denominated in euros) by private insurance companies. The limit is 20% for holdings in other currencies.
Currency-matching regulations on assets/liabilities compositionA 60% limit applies to holdings in euros by private insurance companies. The limit is 20% for holdings in other foreign currencies.
Pension funds
Limits (max.) on securities issued by nonresidentsA 60% limit applies to holdings of foreign equity securities (denominated in euros) by private pension funds. The limit is 20% for holdings in other currencies.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionA 60% limit applies to holdings in euros by private pension funds. The limit is 20% for holdings in other foreign currencies.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksExecutive Order No. 40, dated January 20, 1999.
Changes during 2006
No significant changes occurred in the exchange and trade system.

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