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Iceland's FATF Report: Partially Compliant Areas

· 2 min read
Daniel Smith
Money Laundering Specialist

According to the Financial Action Task Force (FATF), Iceland has made notable strides in adhering to regulations against financial crimes as outlined in its latest Follow-Up Report. However, certain areas require further improvement.

Overview​

Iceland's compliance with the FATF Recommendations reflects the extent to which a country adheres to the international organization's standards for countering money laundering and terrorist financing.

Iceland's Progress on FATF Recommendations​

The following represents Iceland's progress towards FATF Recommendations:

  1. Risk Assessment & Risk-based Approach (R.1): Fully Compliant (C)
  2. National Cooperation and Coordination (R.2): Fully Compliant (C)
  3. Money Laundering Offence (R.3): Fully Compliant (C)
  4. Confiscation and Provisional Measures (R.4): Largely Compliant (LC)
  5. Terrorist Financing Offence (R.5): Largely Compliant (LC) ...
  6. Transparency and Beneficial Ownership of Legal Persons (R.24): Largely Compliant (LC)
  7. Transparency and Beneficial Ownership of Legal Arrangements (R.25): Conditionally Compliant (C)
  8. Regulation and Supervision of Financial Institutions (R.26): Largely Compliant (LC)
  9. Regulation and Supervision of Designated Non-Financial Business and Professions (R.28): Fully Compliant (C)

Recommendations Still in Progress​

The areas requiring improvement are:

  • Correspondent Banking (R.13): Partially Compliant
  • Financial Intelligence Units (R.26): Largely Compliant
  • Transparency and Beneficial Ownership of Legal Arrangements: Conditionally Compliant

Next Steps for Iceland​

Iceland must work towards fully meeting FATF standards in the following areas:

  1. Correspondent Banking: Improve regulatory frameworks and implement effective risk assessments for correspondent banking relationships.
  2. Financial Intelligence Units: Enhance functional autonomy and analyze information received to ensure effective financial intelligence.
  3. Transparency and Beneficial Ownership of Legal Arrangements: Increase transparency and enable access to beneficial ownership information to the public.