Pursuant to the Danish Customs Act, any person who intentionally or through gross negligence fails to declare goods with the purpose of evading customs duties or taxes may be liable for smuggling. Such offences are punishable by a fine or imprisonment for up to 1 year and 6 months. In particularly serious cases, the conduct may fall under the Danish Criminal Code, increasing the maximum penalty up to 8 years imprisonment.

The decisive factor in determining whether conduct constitutes smuggling is not the size of the evaded amount, but whether there was intent or gross negligence in relation to the evasion. Consequently, even a single transaction involving a watch or a modest quantity of gold, where the evaded customs duty or VAT relatively limited, may result in a charge of smuggling and, therefore, a genuine risk of custodial sentence. This distinguishes customs offences significantly from the fine-based sanctions that are generally associated with tax and duty violations.