Financial Crime Risk Assessment Methods in Iceland Show Improvement, But Work Remains to be Done

Reykjavik, November 17, 2020 - Iceland has made significant strides in strengthening its framework for tackling money laundering and terrorist financing since the country’s 2018 assessment by the Financial Action Task Force (FATF). A follow-up report released earlier this year highlights the progress made by the island nation.

Progress Made

Iceland has been under an enhanced follow-up process since the adoption of its Mutual Evaluation in 2018, during which it was found to be partially compliant with several FATF recommendations. However, recent assessments show that the country has made significant improvements across multiple areas.

Risk Assessment and Application of a Risk-Based Approach

Iceland’s risk assessment and application of a risk-based approach have moved from partially compliant to compliant.

National Cooperation and Coordination

National cooperation and coordination have also improved significantly, moving from partially compliant to compliant.

Targeted Financial Sanctions for Terrorism and Terrorist Financing

The country has made notable progress in implementing targeted financial sanctions for terrorism and terrorist financing, as well as those related to proliferation.

Non-Profit Organizations

Non-profit organizations, once deemed non-compliant, are now largely compliant with FATF recommendations.

Transparency and Beneficial Ownership of Legal Persons

Transparency and beneficial ownership of legal persons have improved from partially compliant to largely compliant.

Regulation and Supervision of Financial Institutions

Regulation and supervision of financial institutions has also shown significant improvement, moving from partially compliant to largely compliant.

Cash Courier Regime

Iceland’s cash courier regime has been upgraded from partially compliant to compliant.

Guidance and Feedback

Guidance and feedback have also improved, reaching a level of compliance.

Outstanding Issues

However, the report does highlight that some deficiencies remain, particularly in relation to FATF Recommendation 15, which deals with new technologies. While Iceland has addressed some of the identified deficiencies and met some of the new criteria, moderate deficiencies still exist.

Current Compliance Status

Today, Iceland is compliant with 21 out of 40 FATF recommendations and largely compliant with 16 more. It remains partially compliant with three recommendations.

Next Steps

The country will continue to report back to the FATF on its progress, with a view to addressing outstanding issues and further improving its framework for combating financial crime.