It may seem cumbersome to fill out the business scope. Especially if the organization is entirely new, it can be a bit difficult to figure out what to write at all. However, it is important to make a thorough effort to write it correctly. Remember that, in the end, this benefits us all, as the business scope exists to create greater financial security and prevent criminal networks from laundering money and financing terrorism.

Since procedures vary between financial institutions, it can be difficult to provide completely specific advice in this area. However, in general, red flags will appear at the financial institution, which they must act on if the actual business scope deviates too much from what you report in the submission. Therefore, it is important that you take the time to assess and calculate how the coming year is expected to look.

For an established association, describing the business scope is more straightforward, as there are past years' experiences to rely on.

For a new association, it can be difficult to accurately determine the scale of operations, including whether cash transactions will be used at all. However, since financial institutions need this information in accordance with the new law against money laundering and terrorist financing, it is important that you do your best to provide a well-informed estimate. Nonetheless, it will still be an estimate.

Financial institutions are particularly interested in the extent of cash usage within the association. Digital payment solutions, such as bank transfers and MobilePay transactions, are easier to track. Therefore, we recommend primarily using digital payment methods. For example, use our system for automatic membership fee processing – it’s easy, affordable, and secure.

Within the reporting section, you will find an overview—or checklist—of the required elements. It appears as follows:

Under "Business scope" in the checklist, your association will encounter another checklist created by your financial institution. The specific information required varies from one institution to another, so we cannot provide a definitive answer on what must be included in the report. Please note that financial institutions need this information to comply with regulations from the Data and Financial Supervisory Authorities, in accordance with the EU's new Anti-Money Laundering (AML) law. However, each institution implements these requirements differently, which is why the information requested may vary.

Here are some examples of what a financial institution might want to know (REMEMBER, these are only EXAMPLES!):

What are the association’s primary activities/purpose?

When a financial institution asks for your primary purpose, describe why your association exists. You can refer to your statutes for guidance.

For example, your purpose might be to promote sports and physical activity among children and young people in the local community by offering football teams for ages 3-17. Or your association might aim to strengthen social relationships between Somali refugees and ethnic Danes in your area. It could also be a group of motorcycle enthusiasts gathering for monthly meetups and an annual event.

Here is a fictional example:

"The name of the association is Solstaden Beekeepers' Association. It exists to protect the bees, especially the brown bee, in Vendsyssel, ultimately aiming to strengthen nature and the region’s flora, as well as to assist all local beekeepers in their honey production. We hold monthly meetings in nature to discuss bee protection and to enjoy a glass of mead, which we take turns bringing. We also have an annual event, the Bees' Festival, where the entire Solstaden closes its main street and hosts a festive parade through the town. This creates unity among all the town’s residents and institutional and business actors."

What is the purpose of the customer relationship?

A customer relationship refers to why the association wants to be a customer at a financial institution. In other words, what will you use your bank account for?

For example, it could be for daily operations, membership fee payments, savings, receiving sponsorships, grants from the municipality, or similar.

Here is a fictional example:

"We need the bank account for receiving semi-annual membership fees, payments for the association's events, and to receive public grants and sponsorships."

How many cash deposits and withdrawals are there annually?

When a financial institution asks for this, it can be helpful to simply agree on how often the treasurer should visit the bank to deposit or withdraw money, and stick to that. For example, once a month. If you truly don’t plan to use cash for anything other than very small amounts, it might even be just once a year. This way, the treasurer doesn’t waste time making unnecessary trips to the bank.

As for the size of deposits and withdrawals, you can sit down and calculate it or use your experiences from previous years, as mentioned under "General advice."

Avoid all the hassle with cash for membership fees by using Unioo's automatic membership fee processing.

Foreign relations

Many associations can simply say no to having any connections abroad, and then the related points are quickly dealt with. However, for those of you with activities abroad, you must be very thorough and precise about what you provide. The financial institution may ask you to supply very specific details about upcoming foreign transactions. Remember to provide the amounts in the correct currency—the one your financial institution asks you to use.

We hope that this article was helpful. If you have further questions about how to fill out the business scope, we recommend that you contact your financial institution, as we at Unioo are neither able nor allowed to give specific advice regarding your particular business scope.