New Act allows the Danish Business Authority to carry out unannounced inspections without a court order
The act amending the Danish Enabling Act, which has just been passed, allows the Danish Business Authority to carry out unannounced and announced inspections at the premises of all exporting businesses without a court order and to request all information relating to the Business Authority's control and monitoring responsibilities with respect to dual-use export control and trade sanctions.
The new act has been widely criticised
Except for minor linguistic clarifications, the act and the underlying legislative material appear unchanged compared to the original bill. The main difference from the bill going out for consultation is a clarification in the last sentence of section 1f(3) that the assistance which the persons referred to in the act are to extend to the controlling and monitoring authorities includes supplying all relevant information, giving access to commercial premises and means of transportation and providing assistance in connection with inspections, among other things.
The consultation on the bill and the reading of it gave rise to numerous reactions among both trade organisations and a number of right-wing parties in the Danish Parliament. In particular the trade organisations the Confederation of Danish Industry, Danish Shipping, the Danish Chamber of Commerce, the Association of Danish Law Firms and the Danish Bar and Law Society have voiced strong criticism. However, the consultation and the criticism of the bill have not given rise to any modifications.
In a consultation response, the Confederation of Danish Industry, Danish Shipping and the Danish Chamber of Commerce in particular criticised the bill in terms of the access to carry out unannounced inspections without a court order. The trade organisations believe that this will have far-reaching consequence for all types of exporting businesses. Read the consultation response (in Danish) here.
The trade organisations find that the access to carry out inspections without a court order will affect all Danish businesses engaged in trade with other countries. Furthermore, there is not estimated to be a justified need for introducing access to carry out unannounced inspections without a court order, and that such access goes far beyond the basis of Danish administration of justice, ie that investigations by the authorities require a court order.
The bill has also been criticised for being vague in terms of the volume of information to which the Business Authorities may request access, including whether access is expected to be granted to the emails of employees of the relevant business, information kept with subsidiaries abroad, information that is subject to commercial duties of confidentiality, or military information which cannot be surrendered immediately without the consent of the relevant country.
In connection with the Danish Parliament’s reading of the bill, a number of right-wing parties also reacted to the radical nature of an unannounced inspections without a court order and Venstre, the Liberal Party of Denmark, tried, with the support of the Conservative People's Party, the Danish People’s Party, the New Right and the Liberal Alliance, to have the bill changed to the effect that the act only authorises sufficiently legitimate and announced inspections.
New measures to be adopted by businesses
The new act affords grounds for businesses to consider introducing or updating internal guidelines with guidance and procedures on how a business is to act in case of announced and unannounced inspections by the Business Authority.
In addition, a business must, as previously, ensure general compliance with the rules on export control and ensure that such information may be accessed with short notice so that it will be able to hand it over to the Business Authority in case of an announced or unannounced inspection.