Financial Crime World

Iceland’s Financial Regulators Crack Down on Tax Evasion and Economic Crimes

In recent years, Iceland has seen a significant increase in financial irregularities, including tax evasion and economic crimes. The Financial Supervisory Authority (FME) has been at the forefront of addressing these issues, with a notable surge in cases handled by the agency between 2003 and 2007.

Rise in Cases Handled by FME

According to figures released by the FME, the number of new cases handled by the agency increased by over 30% between 2003 and 2007, rising from 860 to 1179. The types of cases handled by the FME vary widely, ranging from insider trading to more complex financial crimes.

Types of Cases Handled by FME

  • Insider trading
  • Complex financial crimes

Regulatory Agencies’ Efforts

In addition to the FME, other regulatory agencies have also been working to combat financial irregularities in Iceland. The Directorate of Tax Investigations (DTI) was established in 1993 and is responsible for investigating alleged tax crimes. Last year alone, the DTI investigated over 100 cases involving suspected tax frauds, with a particular focus on industries such as restaurants and food services.

DTI’s Focus Areas

  • Restaurants
  • Food services

Tax Evasion and Offshore Accounts

However, tax evasion has taken on new forms in recent years, with many individuals and companies using offshore accounts to avoid paying taxes in Iceland. The rapid international growth of Icelandic corporations has raised suspicions of major tax evasion, particularly in countries such as the British Virgin Islands.

Concerns about Tax Evasion

  • Use of offshore accounts to avoid paying taxes
  • Rapid international growth of Icelandic corporations leading to suspicion of major tax evasion

Economic Crime Division’s Role

The Economic Crime Division of the National Commissioner of the Icelandic Police (NCP) is also playing a key role in combating financial crimes in Iceland. Founded in 1997, the division receives reports from regulatory agencies and investigates serious violations of various types of laws, including tax laws, customs laws, and competition laws.

Challenges Faced by NCP

  • Lack of resources (manpower and funds)
  • Fluctuating number of employees at Economic Crime Division (currently 13)

Commitment to Combating Financial Crimes

Despite these challenges, Iceland’s regulatory agencies are committed to cracking down on financial irregularities and ensuring that those who engage in illegal activities are held accountable. As the country continues to grow and develop its economy, it is essential that these efforts remain a priority to maintain public trust and confidence in the financial system.

Statistics:

  • 860 new cases handled by FME in 2003
  • 1179 new cases handled by FME in 2007 (up over 30% from 2003)
  • DTI investigated over 100 cases involving suspected tax frauds last year
  • Direct assets of Icelandic groups in known tax havens increased almost 50-fold between 2002 and 2007
  • Number of employees at Economic Crime Division: 6 in 1997, 17 in 2005, and 13 in 2009