Iceland’s Battle Against Financial Crimes: Defining Money Laundering and Terrorist Financing

The National Risk Assessment of Iceland’s Efforts to Combat Money Laundering and Terrorist Financing

Preface

In this report, Iceland’s National Commissioner of the Icelandic Police highlights the country’s efforts to combat money laundering and terrorist financing. Known for its natural beauty and tranquility, Iceland is not immune to the threat of financial crimes. This is Iceland’s third risk assessment on money laundering and terrorist financing.

Background

Since 1991, Iceland has been a member of the Financial Action Task Force (FATF), an international organization dedicated to preventing money laundering and terrorist financing. Iceland has adapted its legislation to FATF’s ever-evolving standards, ensuring a robust framework to fight these illicit activities.

Contents

1. Introduction 1.1 Legal Environment and Monitoring * Iceland’s Legislation and FATF’s Influence

2. Methodology and Conclusions 2.1 Methodology * Analyzing Threats, Weaknesses, Consequences, and Risk Mitigation Strategies 2.2 Conclusions * Money Laundering Risks within Iceland’s Jurisdiction * Terrorist Financing Risks within Iceland’s Jurisdiction

3. Money Laundering: The Hidden Side of Financial Crimes 3.1 Tax Fraud as a Predicate Offence of Money Laundering * Significance and Risk Classification

4. Terrorist Financing: A Global Threat at Home 4.1 Transport of Assets Out of the Country * Risks and Mitigation Strategies

1. Introduction

1.1 Legal Environment and Monitoring

• Iceland’s Legislation and FATF’s Influence Iceland implemented the third Directive of the European Parliament and Council on Money Laundering (2005/130/EC), marking the beginning of a comprehensive statutory and regulatory scheme against financial crimes. Icelandic legislation is designed to prevent illicit funds from entering the traditional financial system or funding terrorism.

2. Methodology and Conclusions

Methodology

• Analyzing Threats, Weaknesses, Consequences, and Risk Mitigation Strategies The assessment focuses on understanding the money laundering and terrorist financing risks within Iceland’s jurisdiction.

Conclusions

• Money Laundering Risks within Iceland’s Jurisdiction
• Terrorist Financing Risks within Iceland’s Jurisdiction

3. Money Laundering: The Hidden Side of Financial Crimes

3.1 Tax Fraud as a Predicate Offence of Money Laundering

• Significance Tax fraud is a crucial aspect of money laundering as it can lead to significant financial gains.
• Risk Classification Risk classification for tax fraud will follow the risk assessment’s methodology.

4. Terrorist Financing: A Global Threat at Home

4.1 Transport of Assets Out of the Country

• Risks Potential risks include the transport of funds out of the country, which can facilitate terrorist activities.
• Mitigation Strategies Strategies to mitigate the risks will be outlined in the assessment.

Conclusion

This risk assessment report underscores the importance of understanding and addressing the risks associated with money laundering and terrorist financing in Iceland. The assessment serves as a crucial tool for law enforcement agencies, government bodies, and stakeholders to strengthen defenses against these financial crimes.