Financial Crime World

Iceland Cracks Down on Money Laundering with New Regulations

Strengthening Anti-Money Laundering Measures in Iceland’s Financial Sector

Reykjavik, Iceland - The Icelandic government has introduced a set of new regulations aimed at combating money laundering in the country’s financial sector. This move is part of an ongoing effort to enhance anti-money laundering (AML) measures and prevent the flow of illicit funds through Icelandic banks and financial institutions.

The Global Problem of Money Laundering

  • According to official estimates, approximately $800 billion to $2 trillion is laundered annually globally, equivalent to 2% to 5% of global GDP.
  • Iceland’s new regulations aim to combat this issue by requiring financial institutions to implement robust AML procedures.

Key Components of the New Regulations

  • Customer Due Diligence: Financial institutions must conduct thorough background checks on customers to ensure they are legitimate and not involved in illicit activities.
  • Transaction Monitoring: Institutions will be required to monitor transactions for suspicious activity, such as unusual patterns or large cash transactions.
  • Suspicious Activity Reporting: Financial institutions must report any suspected money laundering activities to the relevant authorities.

Collaboration between Financial Institutions and Law Enforcement

  • The new regulations emphasize the importance of collaboration between financial institutions and law enforcement agencies in identifying and disrupting money laundering schemes.
  • This includes sharing information on suspicious transactions and individuals, as well as working together to investigate and prosecute cases.

International Efforts to Combat Money Laundering

  • Iceland’s move is part of a broader international effort to combat money laundering and terrorist financing.
  • The Financial Action Task Force (FATF), an intergovernmental organization that sets global AML standards, has praised Iceland’s efforts and called on other countries to follow suit.

Industry Response and Next Steps

  • Industry experts have welcomed Iceland’s move, saying it is a crucial step in preventing money laundering and protecting the country’s financial reputation.
  • The Icelandic Financial Supervisory Authority (FME) has announced plans to launch a new AML unit, which will work closely with financial institutions to ensure compliance with the new regulations.

Iceland’s new AML regulations are set to come into effect on January 1, 2024, and will be closely monitored by the FME and other relevant authorities.