Financial Crime Prevention Measures in Iceland Under Scrutiny

FATF Issues Assessment Report

A comprehensive assessment of Iceland’s implementation of anti-money laundering and counter-terrorist financing standards has been completed by the Financial Action Task Force (FATF), revealing a mixed bag of strengths and weaknesses. The report highlights both positive developments and areas for improvement.

Legislative Framework

• Iceland has a solid legal framework in place to combat money laundering, but:
  • Available penalties are low
  • Number of convictions is low

Counter-Terrorist Financing

• Legislation on combating terrorist financing is generally comprehensive
• However, effectiveness has yet to be tested
• No robust system for freezing suspected terrorist financing-related assets
• Must strengthen this system

Icelandic Financial Intelligence Unit (FIU)

• Criticism raised about structure, resources, and results
• Issues have been addressed, with improvements expected

Preventative Measures

• Strengthened through new legislation for financial institutions and designated non-financial businesses
• Some deficiencies remain
• Must put obligations into effective practice and address remaining gaps

Domestic Cooperation System

• Strong informal networks of communication within the country’s small government
• Comprehensive framework for international cooperation
• Enables effective work with other nations in combating financial crime

FATF Assessment Methodology

The assessment was conducted using the 2004 FATF Recommendations and Methodology for Assessing Compliance with the FATF 40 Recommendations and FATF 9 Special Recommendations.

Contact Information

For further information, please contact the FATF Secretariat at:

• Phone: +33 1 45 24 79 45
• Fax: +33 1 44 30 61 37
• Email: contact@fatf-gafi.org