Iceland’s Financial Institution AML/CFT Policies Under Scrutiny - Report

Reykjavik, July 28, 2023 - Iceland’s banking sector has been found to have a relatively low risk of money laundering and terrorism financing due to its limited geographical reach and economic fundamentals.

Low Risk Profile

According to the Financial Sector Assessment Program report, Iceland’s cross-border payments activity is minimal, with few flows to countries identified as high-risk by authorities. The country has also experienced low levels of outlier cross-border payments and insufficiently explained financial flows, which further reduces its risk exposure.

Robust AML/CFT Policies

Iceland’s banking sector, comprising commercial banks and correspondent banking institutions, has implemented robust Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) policies to mitigate any potential risks. These policies are designed to prevent and detect money laundering and terrorism financing activities.

Economic Fundamentals

Iceland’s economic fundamentals, such as foreign trade and direct investments, contribute to its low risk profile. The country’s financial sector is also subject to regular monitoring and supervision by regulatory authorities to ensure compliance with international standards.

Conclusion

The report concludes that Iceland’s financial institution AML/CFT policies are robust and effective in mitigating the risk of money laundering and terrorism financing. This finding is expected to be welcomed by Icelandic authorities and stakeholders alike, as it reinforces the country’s commitment to maintaining a secure and stable financial system.

Key Findings:

• Iceland’s cross-border payments activity is minimal
• Low levels of outlier cross-border payments and insufficiently explained financial flows
• Robust AML/CFT policies implemented by commercial banks and correspondent banking institutions
• Economic fundamentals contribute to low risk profile
• Regular monitoring and supervision by regulatory authorities ensure compliance with international standards