Financial Crime World

Iceland Enhances Supervision of DNFBPs with New Supervisor

Strengthening Oversight in the Financial Sector

Reykjavik, Iceland - Since establishing a new supervisor within the Icelandic Directorate of Internal Revenue (DIR) in 2018, the agency has made significant strides in supervising the country’s Designated Non-Financial Businesses and Professions (DNFBP) sector.

Key Developments

  • The new supervisor is responsible for overseeing the entire DNFBP sector, including law professionals and the gaming industry, which were previously unsupervised.
  • The DIR received assistance from outgoing supervisors and other authorities to facilitate a smooth transition.

Deepening Understanding of Risks

The DIR has taken various steps to deepen its understanding of risks in the sectors it supervises:

Risk Assessment and Management

  • Developed comprehensive sectoral risk assessments and individual risk assessments for most obliged entities under supervision.
  • Divides sectors into four risk categories: high, significant, medium, and low.
  • Conducts annual or bi-annual updates of risk assessments for high-risk sectors.

AML/CFT Supervision

The DIR’s Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) unit consists of three full-time employees, with other divisions providing assistance when necessary. The agency has conducted:

  • 13 on-site inspections
  • 38 traditional off-site inspections
  • 60 topic-specific off-site inspections since June 2019

Money Laundering Investigations and Prosecutions

Money laundering investigations have been a priority in Iceland since 2017, with a significant increase of 511% from 2016 to 2018. The number of investigators/specialists investigating ML and the underlying predicate offence has increased by 8% since 2017.

Ongoing Monitoring

The DIR will continue to monitor the DNFBP sector and update its risk assessments accordingly. The agency remains committed to effective AML/CFT supervision and will:

  • Continue to engage with OECD members
  • Conduct inspections
  • Provide guidance to obliged entities

Sources:

  • Icelandic Directorate of Internal Revenue
  • OECD