Financial Crime World

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Iceland’s Company Share Registry Lacks Transparency, Regulatory Body Fails to Monitor Compliance

Reykjavik, Iceland - A recent report has raised concerns over the lack of transparency in Iceland’s company share registry, which does not include beneficial ownership information where the legal owner and beneficiary are not the same. The Business Register, responsible for maintaining the registry, has been criticized for failing to actively monitor compliance with registration obligations, resulting in no sanctions being imposed for failure to register basic information.

Limited Access to Beneficial Ownership Information

The report also found that there is limited evidence that competent authorities have timely access to beneficial ownership information. This lack of transparency hinders efforts to combat money laundering and terrorist financing.

International Cooperation Falls Short

Iceland has been praised for its good legal and procedural framework for international cooperation, but the report notes that the country’s law enforcement agencies do not actively seek informal and formal international cooperation in ML/TF cases. The Financial Intelligence Unit (FIU-ICE) exchanges information with foreign counterparts, but mostly on request rather than spontaneously.

Priorities to Improve Anti-Money Laundering and Counter-Terrorist Financing Measures

To address these concerns, the report recommends several priority actions:

  • Revise the 2017 money laundering and terrorist financing risk assessment to reflect actual illicit financial activity in Iceland.
  • Develop national AML/CTF operational policies and coordination mechanisms to ensure competent authorities share ML/TF information on an ongoing basis.
  • Conduct outreach to reporting entities to provide guidance and feedback on trends, typologies, and red flag indicators for ML/TF.
  • Enhance the human and technical resources of FIU-ICE to enable more effective operations.

Rating Low in Effectiveness and Technical Compliance

Iceland’s anti-money laundering and counter-terrorist financing measures have been rated low in effectiveness and technical compliance. The country has been criticized for its lack of progress in implementing AML/CTF regulations, which hinders efforts to combat financial crimes.

Conclusion

The report concludes that Iceland needs to take immediate action to improve its company share registry, enhance international cooperation, and strengthen its anti-money laundering and counter-terrorist financing measures to protect the integrity of its financial system.