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Iceland’s Narcotics Trafficking Laws Need Strengthening
A recent evaluation has revealed that Iceland’s laws and regulations aimed at combating narcotics trafficking are inadequate and in need of significant improvement.
Inadequate Regulations
The evaluation, conducted by an international team of experts, found that Iceland’s laws and regulations do not adequately address the threats posed by money laundering and terrorist financing. The country’s financial institutions and businesses are failing to implement effective anti-money laundering (AML) and counter-terrorism financing (CFT) measures, leaving the country vulnerable to illegal activities.
Key Areas for Improvement
The evaluation highlighted several key areas where improvement is needed:
- Iceland’s laws do not adequately define beneficial ownership, making it difficult to identify those behind shell companies or other complex corporate structures.
- The country’s financial institutions are not required to actively determine whether customers are acting on behalf of others, which can facilitate money laundering and terrorist financing.
- AML/CFT regulations do not adequately address correspondent relationships with foreign banks and other financial institutions, creating a significant risk for money laundering and terrorist financing.
Need for Better Training
The evaluation also found that Iceland’s law enforcement and financial regulatory officials require better training to enable them to effectively detect and prevent money laundering and terrorist financing.
New Legislation Introduced
To combat these issues, the government of Iceland has introduced new legislation aimed at strengthening its AML/CFT regime. The Act on Measures against Money Laundering and Terrorist Financing, which came into force in June 2006, extends the scope of the previous legislation to include a broader range of designated non-financial businesses and professions.
International Expert Endorsement
The evaluation’s findings have been welcomed by international anti-money laundering and counter-terrorism financing experts, who have urged Iceland to implement the new legislation effectively and to continue strengthening its AML/CFT regime.
“We urge the government of Iceland to take immediate action to strengthen its AML/CFT regime,” said a spokesperson for the international team. “The country’s financial institutions and businesses must be held accountable for implementing effective anti-money laundering and counter-terrorism financing measures.”
Government Response
In response to the evaluation, the Icelandic government has committed to reviewing its laws and regulations aimed at combating narcotics trafficking and to introducing new measures to strengthen its AML/CFT regime.
“We take these findings seriously and are committed to improving our country’s anti-money laundering and counter-terrorism financing regime,” said a spokesperson for the Icelandic government. “We will work closely with international experts to ensure that our laws and regulations are effective in preventing money laundering and terrorist financing.”