COVID-19: The Danish Parliament authorises quadruple fines and up to 20 years of imprisonment for "Stimulus-package fraud"

Section 81 d of the Danish Penal Code

The possibility of imposing stricter punishment has been enacted by inserting as section 81 d in the Danish Penal Code a provision allowing stricter punishment for criminal offences arising out of or connected with COVID-19. 

Section 81 d comprises four sub-sections: 

According to section 81 d (1), the punishment for various offences, including forgery and submission of incorrect and false declarations, may be doubled if the offence is connected with COVID-19.   

According to section 81 d (2), the punishment for any of the offences set out in section 81 d (1) may be quadrupled if the offence has been committed in such circumstances that the relief applicant has wrongfully obtained or applied for relief, aid or similar compensation from stimulus-packages that are aimed at reducing the adverse financial effects of COVID-19. 

According to section 81 d (3), when determining the supplementary fine for any of the offences covered by section 81 d (2), regard must be had to the gain obtained or intended. 

According to section 81 d (4), with regard to criminal offences that are not covered by section 81 d (1) and (2), it will generally be deemed an aggravating circumstance if the offence is connected with COVID-19.  

Hence, sub-sections 2 and 3 of the new section 81 d of the Danish Penal Code apply directly to offences relating to payments, etc. from the Government's relief packages. According to the explanatory notes to the Penal Code, such offences should be punished more harshly. 

"Stimulus-package fraud" 

The provision covers practically any and all criminal offences that have taken place in such circumstances that the offenders have wrongfully obtained or applied for loans, credit facilities, relief, aid or similar compensation from one of the Government's relief packages. According to the explanatory notes to the Penal Code, this means, among other things, that the new section 81 d (2) may also be deemed violated if an individual or an enterprise has intentionally provided incorrect or misleading information or concealed information in order to fraudulently obtain compensation from one of the relief packages, whether or not the compensation has been granted.

In the Penal Code, "stimulus-package" is defined as "stimulus-packages aimed at reducing adverse effects of the COVID-19 epidemic". According to the explanatory notes, the stimulus-packages include e.g. the following schemes:

• Pay compensation scheme
• Compensation scheme for the fixed costs of enterprises
• EKF (working capital guarantee, underwriting of loans)
• Guarantee schemes for enterprises (underwriting of loans)
• Compensation scheme for self-employed and freelance workers
• Extended right for employers to receive reimbursement and for self-employed workers to receive sickness benefit. 

It is emphasized in the explanatory notes, however, that the concept of relief package must be construed dynamically and extends also to any relief package introduced at a later time.

The stricter punishment

The explanatory notes to the amendments contain various examples describing the expected punishments, including the interrelationship between imprisonment and supplementary fines. 

By way of example, in simplified terms, if a CFO of an enterprise has wrongfully obtained relief in the amount of DKK 1 million, which would normally be punished by one year of imprisonment and a supplementary fine of DKK 1 million, the new rules imply that the term of imprisonment will generally be four years and the size of the supplementary fine payable by the CFO will be DKK 4 million. In addition, in parallel to the punishment of the CFO, the relief obtained will be confiscated, and a fine will be imposed on the enterprise. 

It is emphasized in the explanatory notes that if two or more persons jointly commit the offences, each of the persons will be punished by imprisonment and a supplementary fine. According to the notes, this is also the case if an employee has committed the offences on behalf of a company. In this context, the following appears explicitly from the notes: "The increase in the fine is not intended to be counterbalanced by a shorter imprisonment term, and the imposition of a fine should generally not depend on the defendant's ability to pay." 

In one single respect the new section 81 d (1) does not result in stricter punishment: the provision does not amend section 33(2) of the Penal Code, according to which the imprisonment term can never exceed 20 years even in cases where statutory authority has been provided for an increase in the prescribed punishment. However, the provision does not set a maximum for confiscation, fines and supplementary fines.  

The punishment expected to be claimed by the prosecution can therefore be summarised as follows:

"Sunset clause"

The adopted Act contains a so-called sunset clause, according to which section 81 d will expire on 1 March 2021 unless changed prior to that date. 

Read the entire Act on stricter punishment for criminal offences arising out of or connected with COVID-19, and on blocking of websites (in Danish).