Financial Crime World

Iceland Grapples with Money Laundering and Terrorist Financing: Understanding the Threats and Measures in Place

Money laundering, a pervasive issue globally, is also a significant concern in Iceland. The receipt, handling, or transfer of illicitly obtained gains poses a major threat to the country’s financial system, free competition, and market forces.

The Threat of Money Laundering

  • A significant concern for Iceland’s financial system
  • Receipt, handling, or transfer of illicitly obtained gains
  • Poses a major threat to:
    • Financial system
    • Free competition
    • Market forces

It is essential for the state to maintain robust supervision and ensure that obligated entities have effective systems in place to prevent such illegal activities.

The Threat of Terrorist Financing

  • The act of raising funds with the intention or knowledge that they will be used to commit a crime punishable under Article 100 (a-c) of the General Penal Code
  • Serious offense
  • Terrorist groups often rely on funding to carry out their acts

It is crucial for authorities to combat this issue effectively.

Measures in Place

Iceland has implemented the Anti-Money Laundering and Terrorist Financing Act No. 140/2018. The law imposes obligations on parties engaged in activities that could be used for money laundering or terrorist financing to:

  • Identify their customers and activities
  • Notify authorities if they suspect or have knowledge of illegal activities

Supervision and Enforcement

The Central Bank of Iceland plays a vital role in supervising these entities and ensuring compliance with the law. The bank has the authority to:

  • Impose penalties, including:
    • Administrative fines
    • Dismissal of board members and managing directors
    • Revocation of operating licenses
    • Application of sanctions
  • Ensure that provisions are enforced

Conclusion

It is essential for the state to maintain a visible and reliable supervision system to deter criminals from exploiting Iceland’s financial system. By understanding the threats posed by money laundering and terrorist financing, authorities can develop effective strategies to prevent and combat these crimes, ultimately protecting the country’s financial stability and security.