Compliance Training Crucial for Icelandic Banks: New Guidelines Stress Importance of Employee Education

Preventing Money Laundering and Terrorism Financing

In a bid to prevent money laundering and terrorism financing, the Icelandic government has reiterated the importance of compliance training for banking employees. According to Act no. 140/2018, obliged entities, including banks, must ensure that their staff receives special training on measures against money laundering and terrorist financing.

Key Components of Compliance Training

• The training aims to equip employees with the necessary knowledge and skills to identify and report suspicious transactions.
• The frequency of training depends on factors such as:
  • Risk assessment
  • Nature and size of the obliged entity
• At least once a year, general training should take place, while specialized training may be required more frequently for specific employees.

Comprehensive Training Plan

A comprehensive plan is necessary to ensure effective implementation of the training program. This plan should include:

• An assessment of the need and frequency of training based on:
  • Areas of activity
  • Business units
  • Customer types
  • Projects

Employee Understanding and Knowledge

To meet the requirements, employees must have a thorough understanding of:

• Relevant laws, regulations, rules, and guidelines related to money laundering and terrorist financing.
• Consequences of non-compliance for both the obliged entity and its customers.
• Main risks and latest methods used in money laundering and terrorist financing.

Emphasis on Employee Training

The government has emphasized that employee training is a critical element in preventing these financial crimes. Obliged entities must take this responsibility seriously and prioritize compliance training to ensure the integrity of their operations.