Trends and climate
Are there plans for any changes to the law in this area?
Denmark still has a relatively low level of anti-corruption and bribery enforcement. However, in June 2018 IT company Atea was convicted of gross corruption, together with four of its senior employees. In the same case, three employees at the public authority Region Zeeland, the recipient of the corrupt benefits, were convicted. Atea was fined Dkr10 million and temporarily barred from public procurement. Following its ‘self-cleaning’ process, Atea can now participate in public tenders.
In February 2019 Danish company Burmeister Wain Scandinavian Contractor (an international powerplant contractor) issued a statement saying that as a result of an internal investigation, it had dismissed five employees and reported two individuals to the police for suspected bribery in connection with three unidentified projects in Africa.
Another significant milestone in terms of anti-corruption took place in March 2019, when Danish paint producer Hempel was fined a total of Dkr220 million for paying bribes in various countries. Hempel had bribed various local agents so that they would encourage shipowners to choose Hempel paint for their vessels.
Have there been any recent changes in the enforcement of anti-corruption regulations?
Which authorities are responsible for investigating bribery and corruption in your jurisdiction?
In Denmark, the police are responsible for investigating bribery and corruption. The circumstances of the case will determine whether it should be handled by the State Prosecutor for Serious Economic and International Crime or one of the 12 Danish police districts. The State Prosecutor for Serious Economic and International Crime is a special unit for investigating and prosecuting financial and international crime.
What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction?
Under Danish law, the key provisions relating to bribery and corruption are found under Sections 122, 144 and 299(2) of the Criminal Code. A distinction is made between bribery in the public and private sectors.
With regard to bribery in the public sector, a further distinction is made between active bribery, which is criminalised under Section 122, and passive bribery, which is criminalised under Section 144. ‘Active bribery’ is the term used to describe a criminalised act undertaken by a briber. ‘Passive bribery’ is the term used to describe a criminalised act or omission carried out by the recipient of a bribe.
Section 122 of the Criminal Code provides that:
Any person who unduly gives, promises or offers to someone performing a public function or office with a Danish, foreign or international public organization a gift or another advantage to make the relevant person perform or fail to perform such function or office is sentenced to a fine or imprisonment for a term not exceeding six years.
Section 144 of the Criminal Code provides:
Any person who unduly receives, demands or agrees to receive a gift or another advantage in the exercise of a Danish, foreign or international public function or office is sentenced to a fine or imprisonment for a term not exceeding six years.
Section 299(2) criminalises bribery in the private sector. In this regard, both passive and active bribery are criminalised under Section 299(2):
A fine or imprisonment for a term not exceeding four years is imposed on any person who receives, demands or agrees to receive a gift or another advantage for himself or others in a manner contrary to his duty of managing the property entrusted to him by another person, and on any person who grants, promises or offers such gift or other advantage.
What international anti-corruption conventions apply in your jurisdiction?
Denmark is party to the following conventions:
- the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions;
- the EU Criminal Law Convention on Corruption;
- the UN Convention against Corruption; and
- the EU Convention against Corruption involving Officials.
Specific offences and restrictions
What are the key corruption and bribery offences in your jurisdiction?
The key corruption and bribery offences are bribe taking and bribe giving by persons in the public and private sectors.
Under Danish law, a distinction is made between bribery in the public and private sectors. Bribery in the public sector is regulated by Sections 122 and 144 of the Criminal Code.
Active bribery in the public sector is regulated by Section 122. An offence is considered to have been committed once an offer has been made, even if the offer is rejected. The provision applies to:
- Danish public officials;
- foreign public officials; and
- persons performing a public function with an international public organisation.
The advantage may consist of both a financial and non-financial advantage, such as an intangible favour. The advantage must relate to the relevant public official performing or failing to perform a function. However, this function need not constitute a breach of the official’s duties. Further, the advantage must be improper. This requirement exists to have a de minimis requirement regarding what constitutes bribery. If a public official receives a small gift on their jubilee, this will be considered proper and therefore not covered by Section 122.
Section 144 has a wider scope than Section 122 because it criminalises the act of receiving an advantage or a gift. The group of persons covered by Section 144 is the same as those covered by Section 122. The gift or advantage in question need not be given to compel the public official to perform or fail to perform a function. Hence, the scope of Section 144 is wider than Section 122. It The only requirement is that receipt gift is considered improper.
Under Sections 122 and 144, propriety will be assessed based on the following factors:
- the nature and extent of the advantage;
- the public official’s position;
- whether the act resulted in a financial gain for the public official;
- whether the public official took the initiative to commit the act;
- the transparency of the arrangement; and
- whether the gift created doubts as to the public official’s impartiality.
The value of the advantage is an important factor because an advantage of little value will have only little or no risk of influencing the recipient and thus being deemed improper. The public official’s function is also relevant, as an official with decision-making authority is more likely to give rise to doubts about their impartiality when receiving advantages. An advantage is also more likely to be deemed improper if a public official derives great personal gain from it. In cases where a public official has taken the initiative to commit the act by requesting a bribe, the advantage is always deemed improper.
The level of transparency should also be considered, as an act is more likely to be improper if the parties have tried to keep it hidden. If an advantage gives rise to doubts about the impartiality of the public official, it is always improper. Examples of advantages that do not give rise to doubts about the impartiality of public officials are small gifts offered to a public official on their jubilee.
Whether an act falls within the scope of Sections 122 and 144 must always be based on an overall assessment of the situation.
As for bribery in the private sector, both active and passive bribery are regulated by Section 299(2). When deciding whether an act falls within the scope of Section 299(2), the following conditions must be met:
- The recipient of the advantage must have been entrusted with property or authority by another person or entity.
- The reward in question must have been a gift or an advantage.
- Receiving the benefit must have been a breach of the recipient’s duties to their employer.
- The action must have been improper.
If a person covered under Section 299(2) accepts an advantage with the knowledge that the offeror intends for that recipient to breach their duties, such activity will likely fall under Section 299(2), even if the recipient does not breach their duties.
Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?
There are no specific restrictions under Danish law.
In 2011 the Ministry of Taxation published a report with a more precise definition of what constitutes a gift or other advantage with regard to bribery in the public sector. The ministry stated that paid events do not fall within the scope of Sections 122 or 144 of the Criminal Code if:
- the event is of a modest nature that does not give rise to doubts about the public official’s impartiality;
- there is a connection between the public official’s function and the event, which makes the public official’s participation seem reasonable;
- participation in the event is of a representative nature and takes place on a high-level scale (eg, an annual meeting of a non-governmental organisation);
- the food and entertainment are connected to the event and do not give rise to doubts about the public official’s impartiality; and
- the event could have been paid for by the relevant public authority under their allocation of funds.
It further follows from the 2017 Good Conduct in the Public Sector Guide published by the Agency for Modernisation Agency, the Ministry of Finance, Local Government Denmark and Danish Regions that public officials should never accept gifts or advantages from citizens or companies in connection with their work. The following factors should be considered when assessing whether an advantage is permitted:
- What is the relationship between the public official, their place of work and the offeror of the benefit?
- Is the gift or advantage offered solely because of the public official’s role?
- Does the offeror expect something in return or could receiving the advantage give rise to such expectation?
- Is the advantage of a modest nature?
- Will receiving the advantage disrupt the public official’s function by making them indebted to the offeror?
- Will receiving the advantage create doubts about the public official’s impartiality?
In the private sector, transparency is key; gifts or advantages are typically permitted if they are offered overtly. This is to ensure transparency between the recipient and the recipient’s employer.
What are the rules relating to facilitation payments?
Under Danish law, the distinction between facilitation payments and bribery is difficult. The Ministry of Justice’s 2015 pamphlet “How to Avoid Corruption” states that facilitation payments under special circumstances are not covered by Section 122 of the Criminal Code. However, it is generally acknowledged that facilitation payments to public officials will always fall under the scope of Section 122. Therefore, it is unclear whether facilitation payments can occur without being covered by Section 122 and therefore not considered bribery.
Scope of liability
Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction?
Under Danish law, both individuals and companies can be held liable for bribery. Under Danish criminal law, only individuals can be held liable (see Section 25 of the Criminal Code). Criminal liability for a company must be expressly criminalised in the relevant legislation.
A new Chapter 5 on criminal liability for legal entities was added to the Criminal Code in 1996. Section 27 states that a company can be held liable for actions committed by a natural person only if the offence was committed in the course of their activities. The specific natural person that committed the offence need not be identified for a company to be held liable.
Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances?
Any person that commits bribery can be held liable. Specifically, agents or facilitating parties can be held liable for complicity under Section 23 of the Criminal Code if they have incited, aided or abetted the offender.
Can foreign companies be prosecuted for corruption in your jurisdiction?
Yes, any company that commits a crime in Denmark is subject to Danish law. If a crime is committed outside Denmark, it will be subject to Danish jurisdiction if the offender is a Danish citizen or a foreign citizen domiciled in Denmark. However, the act must also be a criminal offence in the jurisdiction where it was committed.
Whistleblowing and self-reporting
Are whistleblowers protected in your jurisdiction?
There is no general whistleblower legislation or protection in Denmark. While most large private companies have whistleblower mechanisms in place, it is still in its infancy in the public sector.
The Financial Business Act protects whistleblowers. Financial undertakings are legally required to have a scheme in place that facilitates whistleblowing (see Section 75a of the Financial Business Act). Further, whistleblowers are protected by Section 75b, which provides that:
(1) A financial undertaking shall not subject employees to unfavourable treatment or unfavourable consequences for reporting a violation or potential violation by the undertaking of financial legislation to the Danish FSA or to a scheme implemented in the undertaking.
(2) Employees whose rights are infringed by a breach of subsection (1) may be awarded compensation in accordance with the principles of the Danish Act on Equal Treatment of Men and Women as regards Access to Employment etc. (ligebehandlingsloven), such compensation to be assessed with due regard to the employee's length of service and the merits of the case in general.
(3) Subsections (1) and (2) cannot be varied by agreement to the detriment of the employee.
Employees in the private sector are protected only against unreasonable dismissals. Assessing whether a dismissal is unreasonable can be difficult.
Section 77 of the Constitutional Act protects freedom of speech. Therefore, whistleblowers may in some cases be protected by this provision. However, the protection provided by Section 77 is unclear, which is why the Ministry of Justice published reports in 2006 and 2015 on the freedom of speech of public-sector employees. The reports provide that there are certain restrictions on public-sector employees’ freedom of speech. An employee cannot, for example, make incorrect statements or make statements on the public authority’s behalf. Further, the employee’s freedom of speech must be exercised with due consideration of the internal decision-making process and functional capacity of the public authority. The 2015 report dismissed the idea of requiring the public sector to establish whistleblowing arrangements.
Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?
Danish law includes no specific provisions about leniency with regard to anti-corruption and bribery. Sections 82 and 83 of the Criminal Code contain general rules regarding leniency. Section 82(1)(9) provides that self-reporting must be considered a mitigating circumstance when determining a sentence. At present, there is insufficient case law in place to assess how much leniency will be shown to organisations that self report to the authorities.
Dispute resolution and risk management
Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements?
Danish law does not provide for plea bargaining or settlement agreements. However, in cases where the suspect is subject to a fine, they can avoid a trial by pleading guilty and paying the fine imposed by the prosecutor (see Section 832 of the Administration of Justice Act). This provision makes it possible to settle pre-trial. However, this does not provide for settlements in the sense that it is not possible to plead guilty before a trial to avoid more serious charges.
Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction?
No payment procedures are exempt from liability under the Danish corruption regulations.
What other defences are available and who can qualify?
Danish anti-corruption law has no defences or exceptions. Sections 13, 14 and 16 of the Criminal Code provide general defences under Danish law. According to Section 13, an act committed in self-defence is exempt from punishment. Section 14 provides that an act that would normally be considered a criminal act will note be punished if it was necessary to avert imminent injury to a person or damage to property and the offence was of relatively minor importance. Section 16 provides that persons of unsound mind or a comparable condition at the time of the crime will not be punished.
What compliance procedures and policies can a company put in place to assist in the creation of safe harbours?
Denmark has no safe harbours with regard to anti-corruption. Further, under Danish law, a company is not expressly required to implement any measures to counter bribery. However, a duty to implement such procedures may follow from the general fiduciary duties of officers and directors pursuant to company law.
Record keeping and reporting
Record keeping and accounting
What legislation governs the requirements for record keeping and accounting in your jurisdiction?
The general legislation governing the requirements for record keeping and accounting are the Book Keeping Act and the Annual Reports Act.
What are the requirements for record keeping?
The main record-keeping requirements are as follows:
- The book keeping should be appropriately planned and conducted with due care.
- Documentation of economic transactions should be systematically recorded.
- The documentation should be kept securely for a minimum of five years.
Section 6 of the Book-Keeping Act provides that book keeping should be conducted in accordance with good practices in view of the nature and extent of the corporation. This provision is dynamic and the standard for good book keeping follows societal developments. Businesses are therefore required to have up-to-date solutions in this regard. Sections 6 to 10, 12 and 13 to 15 set out the applicable penalties.
What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations?
Section 22 of the Audit Act provides that an accountant has a duty to act if they find that managers are committing or have committed financial crimes. If the accountant has not received documentation from management within 14 days showing that it has stopped the criminal activity and corrected the damage that the criminal activity has caused, the accountant must report the possible criminal activity to the State Prosecutor for Serious Economic and International Crime. Managers are complicit and thus liable when an accountant reports that non-managers are committing financial crimes and the managers refrain from stopping the criminal activity.
What penalties are available to the courts for violations of corruption laws by individuals?
Violations of Sections 122 or 144 of the Criminal Code will result in a maximum of six years’ imprisonment or fines. Violations of Section 299(2) will result in a maximum of four years’ imprisonment or fines.
Companies or organisations
What penalties are available to the courts for violations of corruption laws by companies or organisations?
Companies are subject to fines. Section 80 of the Criminal Code provides that the size of the fine will be decided based on the gravity of the offence, whereas Section 51(3) states that consideration must be given to the offender’s capacity to pay and the gains or savings obtained or intended.
Section 75(1) of the Criminal Code states that the proceeds of a criminal act, or a corresponding amount, can be confiscated in full or in part. This will often be considered more serious to the company than any fine.