Iceland’s Efforts in Combatting Financial Crime Fall Short

A recent review by international experts has raised concerns over Iceland’s efforts to combat financial crime, specifically in the areas of tracing and seizing criminal proceeds, terrorist financing, and anti-money laundering measures.

Tracing and Seizing Criminal Proceeds

Law enforcement authorities have shown a commitment to tracing and seizing criminal proceeds both domestically and internationally. However, there is a lack of complete statistics on assets recovered and confiscated, making it difficult to assess their effectiveness. Furthermore, there appears to be little awareness among authorities of the increased risk of cross-border transportation or movements of currency.

• Lack of comprehensive statistics on assets recovered and confiscated
• Limited awareness among authorities of cross-border risks

Terrorist Financing

Iceland has not seen any criminal investigations or prosecutions related to terrorist financing, which may be due in part to the country’s size, culture, and geographical location. However, intelligence was shared with other countries in active investigations, demonstrating effective cooperation with international partners.

• No criminal investigations or prosecutions for terrorist financing
• Effective sharing of intelligence with international partners

Anti-Money Laundering Measures

Supervisory authorities do not monitor or ensure compliance with targeted financial sanctions for terrorist financing and proliferation of weapons of mass destruction. There is also a low level of awareness among designated non-financial businesses and professions (DNFBPs) and certain financial institutions (FIs) of their responsibilities related to these sanctions.

• Lack of monitoring and enforcement of anti-money laundering measures
• Low awareness among DNFBPs and FIs of their responsibilities

Structured Risk Assessments

The review also highlighted concerns over the lack of structured risk assessments by banks and DNFBPs, which may contribute to inadequate measures against money laundering and terrorist financing. Additionally, many FIs and DNFBPs have not demonstrated an understanding of the risks they face.

• Lack of structured risk assessments by banks and DNFBPs
• Inadequate understanding of risks among FIs and DNFBPs

Conclusion

While Iceland has made some efforts to combat financial crime, there is still much work to be done to ensure effective implementation of anti-money laundering and counter-terrorist financing measures. The lack of comprehensive statistics, awareness among authorities, and structured risk assessments all contribute to a concerning landscape in this area.

• Recommendations for improvement include:
  • Improving transparency and accountability in tracing and seizing criminal proceeds
  • Enhancing awareness and understanding of terrorist financing risks among authorities and private sector entities
  • Conducting regular structured risk assessments by banks and DNFBPs
  • Implementing effective monitoring and enforcement of anti-money laundering measures