Sanctions 2025

DENMARK Law and Practice Contributed by: Anders Amstrup Fournais and Sarah Bisgaard Møller, Hafnia Law Firm LLP

1. Trends and Overview 1.1 Sanctions Market

ment is that the sanctions might not be that impor - tant after all, given the lack of enforcement. There are several issues in this respect – one being the lack of resources of the authorities, and another the fact that competence in relation to sanctions is spread out between many different state authorities. 1.3 Key Industries All sectors that conduct international business, such as banking and finance, insurance, shipping and trade and heavy industry, as well as any form of export or import of goods and technology, are affected by sanc - tions. 1.4 Overview 1.4.1 Types of Sanctions Denmark could in principle enact unilateral sanctions (like Canada or the USA) but does not. Sanctions and export control rules in Denmark emanate from the EU. UN sanctions are binding in Denmark by way of EU law. However, UN sanctions play a less important role in 2025 given the stalemate in the UN Security Council. 1.4.2 Scope of Sanctions EU sanctions apply: • within the territory of Denmark and other EU mem - ber states; • on board ships and aircraft that are registered in an EU member state; • to any person who has a Danish passport or a passport of another EU member state, whether they are inside or outside the EU; and • to any legal person, entity or body that is incorpo - rated in Denmark or carries out business in Den - mark. In practice, this means that all Danish nationals and Danish companies must comply. Foreign nationals and foreign companies must also comply assuming there is a nexus to Denmark, as described in the fore - going. Foreign subsidiaries of Danish companies need only comply with the sanctions that are applicable in the foreign subsidiary’s jurisdiction, unless the trans - action is orchestrated from Denmark or is being car - ried out in a foreign jurisdiction in order to circumvent EU sanctions.

The sanctions landscape changed fundamentally after Russia’s full-scale invasion of Ukraine in Febru - ary 2022. A flurry of sanctions packages have been adopted in the last three and a half years by the EU since the outbreak of war in Ukraine. Currently, a total of 17 packages have been adopted. At the time of writing, the legislation for the 18th sanctions package is awaited. The Sanctions Market has quieted down after a tense period in 2022 and 2023, which was characterised by legislative chaos and confusion as to the scope of the many news sanctions. Sanctions packages are still being adopted in 2025. There are very few cases of enforcement in Denmark. The authors are generally impressed by the level of due diligence undertaken by market actors, and regret that it is too easy to get away with non-compliance given the lack of enforcement in Denmark. 1.2 Key Trends Businesses are beginning to grasp the extremely wide scope and implications of the sanctions adopt - ed against Russia following the outbreak of war in Ukraine. In addition, the “Harmonisation Directive” (Directive (EU) 2024/1226) came into force in May 2025, requiring EU member states to implement laws as required by the Directive. Owing to Denmark’s res - ervations regarding the EU treaties governing civil and criminal matters, the Directive is not binding on Den - mark and, so far, Denmark has not opted in. Denmark has acted by proposing a bill that strengthens crimi - nal sanctions enforcement by extending time limits for the prosecution to bring criminal proceedings for sanctions violations, and by extending penalty limits – creating a legal basis for longer prison sentences. As mentioned, lack of enforcement is an ongoing trend. As the EU publishes new sanctions packages, businesses are trying to grasp the implications. Busi - nesses are implementing sanctions compliance pro - grammes and amending existing compliance frame - works to control sanctions risks. Audits are being seen more frequently in 2025, although the general senti -

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