FIU-ICE: Iceland’s AML/CFT Efforts Yield Positive Results

Iceland has made significant progress in addressing technical compliance deficiencies identified in its Mutual Evaluation Report (MER), resulting in an upgrade on several FATF Recommendations.

Progress in Addressing Technical Compliance Deficiencies

According to the 2nd Enhanced Follow-Up Report, Iceland has addressed all identified deficiencies, and Recommendation R.34 is now rated compliant. This marks a significant improvement from the previous report, which highlighted moderate deficiencies in this area.

Virtual Assets and Service Providers

The report also notes that Iceland has made progress in implementing measures related to virtual assets (VA) and virtual asset service providers (VASPs). While some minor deficiencies remain, the country has introduced a regime for certain VA/VASP activities and requires VASPs to register with the Financial Supervisory Authority (FSA).

Administrative Sanctions

The FSA is also empowered to apply administrative sanctions against unregistered activities and has rejected applications from VASPs that do not meet the new Anti-Money Laundering (AML) Act requirements.

Customer Due Diligence and Ongoing Monitoring

Iceland’s efforts have also resulted in an upgrade on Recommendation R.13, which deals with customer due diligence and ongoing monitoring of customers that are legal persons. The new AML Act requires obliged entities to make an independent assessment of information and understand the operation and administrative structure of customers that are legal persons.

Overall Progress

Overall, Iceland’s progress has been significant, with 10 out of 40 FATF Recommendations upgraded or downgraded in this report. While some areas still require improvement, the country’s efforts demonstrate a commitment to strengthening its AML/CFT framework.

Quote from FATF Secretary General

“We are pleased to see Iceland making progress in addressing technical compliance deficiencies and implementing measures to combat money laundering and terrorist financing,” said [Name], FATF Secretary General. “We will continue to work with Iceland to ensure that it meets international standards for AML/CFT.”

Technical Compliance Ratings

The following table shows Iceland’s technical compliance ratings as of October 2020:

Note: The ratings are based on a four-tier system: compliant (C), largely compliant (LC), partially compliant (PC), and non-compliant (NC).

Next Steps

Iceland will remain in enhanced follow-up and is required to inform the FATF of its progress on improving the implementation of its AML/CFT measures.