Refugees have had cash confiscated from them under Denmark's controversial “jewellery law” for the first time.

Two men and three women, aged between 26 and 35 and of Iranian nationality, were arrested late on Tuesday at Copenhagen airport for using fake documents.

Under the legislation, called "vindictive" by Human Rights Watch, arriving asylum seekers are allowed to keep up to 10,000 kroner (£1,000) in cash and valuables but anything above that will be seized to pay for their stay.

Officials used the law, which came into force in February, to confiscate the equivalent of over £8,200 (79,600 kroner) from the Iranian citizens. All five of the migrants have asked for asylum, according to Danish police.

Per Fiig, the chief of the National Police Immigration Centre, said: “Danish police are paying daily attention to whether those asylum seekers and foreigners we encounter, who are here illegally, have valuables that can help to finance the costs of their stay. Now, police have found valuables that could be seized."

The group of refugees were arrested for forgery and were found with dollars and euros worth about £14,530 on them.

The measures have received criticism from several organisations, including from the United Nations, which said they would “fuel fear and xenophobia”.

Responding to the first use of the law, Zoran Stevanovic, the northern Europe representative of the United Nations' refugee agency, the UNHCR, told The Independent: "We have urged Denmark not to introduce a possibility to seize asylum-seekers’ personal assets and belongings, in order to use their value to pay for their reception during the asylum procedure in Denmark.

"It is at a minimum inhumane and degrading to expect asylum seekers and refugees to let go of their treasured belongings irrespective of value.

"In addition, it may be important for refugees to have some personal assets at their disposal when they are about to start a life in a new country, and start the process towards self-sufficiency and integration."

The "jewellery law" is part of an immigration bill which came into force earlier this year, which also makes it harder for refugees to become permanent residents and makes some wait three years before they can apply to be reunited with their families.

Human Rights Watch (HRW) has said confiscating assets from refugees is “despicable” and “vindictive”.

Speaking earlier this year, Kenneth Roth, the director of HRW, said: "I think it's despicable that Denmark… [is] moving to seize the last remaining assets of people, who by virtue of their movement and vulnerability, tend to be impoverished."

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But Danish authorities say the laws are simply applying the same rules to immigrants as already apply to native Danes, who must sell assets worth more than £1,120 (10,000 kroner) before they can receive benefits from the state.