Financial Crime World

Iceland’s Battle Against Financial Crimes: A National Risk Assessment on Money Laundering and Terrorist Financing

Introduction

Iceland, an island nation known for its breathtaking landscapes and unique culture, is not typically associated with financial crimes like money laundering and terrorist financing. However, as the globalized world continues to evolve, Iceland has become increasingly vulnerable to these threats. In this article, we present the National Risk Assessment of Money Laundering and Tterrorist Financing in Iceland as mandated by FATF Recommendation no. 1.

Preface

  • Iceland joined FATF in 1991
  • Iceland commit to collaborating with the international community to combat money laundering and terrorist financing
  • FATF guidelines have influenced global regulations such as EU’s anti-money laundering directives
  • Iceland is required to assess risks and weaknesses related to these financial crimes in its jurisdiction

Methodology

  • The assessment follows FATF’s recommended methodology
  • Analysis of threats and weaknesses
  • Assessment of nature, magnitude, and likelihood of money laundering
  • Identification of necessary measures to reduce these risks

Main Findings

Infrastructure

  • Iceland is an island nation in the North Atlantic with a population of approximately 350,000
  • Democratic government and unique political landscape
  • Economy dominated by industries such as construction, information and telecommunications, and financial services
  • FATF identified weaknesses in Iceland’s legislation, prompting adoption of EU’s 4th Anti-money Laundering Directive
  • Comprehensive statutory and regulatory scheme addressing money laundering and terrorist financing
  • Penalties for money laundering and terrorist financing include imprisonment and fines
  • Extensive collaboration with international organizations and sister institutions

Risk Classification and Summary

  • Money laundering risks predominantly linked to predicate offenses such as cash transactions, company operations, financial markets, specialists, gambling, trade and services, and other activities
  • Terrorist financing primary concern is political ties
  • Relatively small size and economic structure make Iceland an attractive location for certain types of financial crimes

Conclusion

This National Risk Assessment of Money Laundering and Terrorist Financing in Iceland emphasizes the importance of international collaboration between organizations, national authorities, and stakeholders to combat these financial crimes and protect the integrity of national economies. Iceland remains committed to implementing effective measures to prevent and deter money laundering and terrorist financing.