Iceland’s Anti-Money Laundering and Counter-Terrorist Financing Efforts Criticized for Lack of Coordination

Iceland’s efforts to combat money laundering and terrorist financing have been criticized in a new report, highlighting serious concerns about the lack of coordination among authorities and the private sector.

Limited Coordination Among Authorities

According to the report, Icelandic authorities have only recently begun to coordinate their efforts in this area, and even then, it is largely limited to preparing a national risk assessment. There is no overarching strategy or mechanism to ensure domestic coordination at the ministerial level or among competent authorities.

• Financial institutions and other businesses in Iceland may not be adequately protected from money laundering and terrorist financing risks as a result.
• The report found that many financial institutions have limited understanding of these risks, and there is a lack of guidance provided by authorities on how to mitigate them.

Lack of Commitment to Pursuing Money Laundering Cases

The report also criticized Icelandic law enforcement agencies for showing a lack of commitment to pursuing money laundering cases. This is due to a lack of resources and expertise in this area.

• There are no complete statistics on assets recovered and confiscated, making it difficult to assess the effectiveness of Iceland’s efforts in this area.

Concerns About Terrorist Financing

The report highlighted concerns about terrorist financing, noting that there have been no criminal investigations or prosecutions of terrorist financing cases in Iceland. While the country has demonstrated effective cooperation with other countries’ security services, there appears to be a lack of consideration of terrorist financing vulnerabilities in Iceland.

Preventive Measures

In terms of preventive measures, the report found that many financial institutions and designated non-financial businesses and professions (DNFBPs) have limited understanding of money laundering and terrorist financing risks. The report also noted technical deficiencies in relation to:

• Preventative measures for politically exposed persons (PEP)
• Suspicious transaction reports (STRs)

Conclusion

The report’s findings are a stark reminder of the importance of coordination and cooperation among authorities and the private sector in preventing and detecting money laundering and terrorist financing.