Financial Crime World

Iceland’s Financial Regulators Step Up Fight Against Money Laundering

Strengthened Risk-Based Approach to Combating ML/TF

The Financial Supervisory Authority (FSA) and the Directorate of Internal Revenue (DIR) have taken significant steps to enhance their risk-based approach to combating money laundering and terrorist financing (ML/TF).

FSA Develops Comprehensive Risk Assessment Model

  • Evaluates obliged entities based on factors such as:
    • Business model
    • Customer types
    • Distribution channels
    • Products/services
    • Geography
  • Increased guidance and feedback to obliged entities, with six full-time employees dedicated to AML/CFT.

DIR Establishes New Supervisor for DNFBP Sector

  • Supervises over 120 real estate agencies, 183 law firms, and 30 accounting firms.
  • Developed a risk-based approach to AML/CFT, with four risk categories:
    • High
    • Significant
    • Medium
    • Low.

Inspections and Training Programs Ensure Compliance

  • FSA conducted:
    • 13 on-site inspections
    • 38 traditional off-site inspections
    • 60 topic-specific off-site inspections since June 2019.
  • DIR conducted similar inspections, as well as seminars and presentations for DNFBPs.

Increase in ML Investigations and Prosecutions

  • ML investigations increased by 511% between 2016 and 2018.
  • Prosecution rates reached almost 100%, demonstrating the high quality of investigations and effectiveness of anti-money laundering measures.

Expert Opinion

  • “It’s essential for financial regulators to stay ahead of money launderers and terrorist financiers.”
    • Leading expert in the field
  • “Iceland’s authorities have taken significant steps to strengthen their risk-based approach, and it’s clear that this is paying off.”

Plans for Future Efforts

  • Automate risk assessment process.
  • Enhance collaboration between different agencies.

Statistics:

  • 511% increase in ML investigations between 2016 and 2018
  • 8 investigators/specialists increased since 2017
  • Almost 100% prosecution rate for ML cases

Key Quotes:

  • “It’s essential for financial regulators to stay ahead of money launderers and terrorist financiers.” - Leading expert in the field