Iceland Cracks Down on Financial Crime: Tightened Reporting Requirements under the Anti-Money Laundering and Terrorist Financing Act (AML/CFT Act)

Money laundering and terrorist financing pose significant threats to societal financial systems and fair market competition. Iceland, a North Atlantic island nation, has strengthened its defenses against these illicit activities by enacting stricter reporting requirements under the Anti-Money Laundering and Terrorist Financing Act (AML/CFT Act).

Money Laundering: Concealing Illicit Proceeds

Money laundering involves concealing or disguising the illegal origin of profits or assets gained through unlawful activities.
Allows organized crime to flourish domestically and internationally.
Consequences include undermining public trust in the financial sector and hindering market forces.

Terrorist Financing: Raising Funds for Violent Crimes

Terrorist financing involves raising funds intended to commit violent crimes punishable by law.
Funds often bolster terrorists’ power and enable them to cause widespread harm.

Iceland’s Anti-Money Laundering and Terrorist Financing Act (AML/CFT Act)

Aims to counteract money laundering and terrorist financing.
Requires businesses and organizations to identify their customers and monitor transactions.
Companies suspected or aware of illegal activities must report to the Central Bank of Iceland (CBI).

The Central Bank of Iceland’s Role

Plays a vital role in ensuring reporting entities comply with the AML/CFT Act and regulations.
Armed with the authority to impose penalties, including:
- Administrative fines.
- Dismissals of boards and managing directors.
- Revocation of operating licenses.
- Systemic penalties to deter non-compliance.

Demonstrating Commitment to Financial Security

Through strict reporting requirements and penalties, Iceland is investing in its financial security.
Strengthening defenses against money laundering and terrorist financing protects both domestic and international markets.