Financial Crime World

Iceland Fails to Effectively Combat Money Laundering and Terrorist Financing, Experts Warn

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Iceland, a country known for its stunning natural beauty and unique culture, has been found to be lacking in its efforts to combat money laundering and terrorist financing. A recent assessment by the Financial Action Task Force (FATF) revealed that Iceland needs to improve its internal cooperation and coordination to effectively tackle these crimes.

Fragmented Understanding of Risks and Inadequate Supervision

The FATF assessment highlighted several areas where Iceland’s anti-money laundering and counter-terrorist financing (AML/CFT) system is lacking. One major issue is the fragmented understanding of risks among Icelandic authorities, which can lead to inadequate supervision and enforcement.

Focusing on Financial Crimes from the 2008 Banking Collapse

Iceland has been focusing on financial crimes related to the 2008 banking collapse, but neglected AML/CFT measures in the process. This has resulted in a lack of awareness among the financial sector and non-financial businesses about money laundering or terrorist financing risks.

Limited Reporting of Suspicious Transactions

As a result of the lack of awareness, there is limited reporting of suspicious transactions by the financial sector and non-financial businesses in Iceland. This makes it difficult for authorities to identify and investigate potential cases of money laundering and terrorist financing.

Improved Coordination Needed Between Domestic Authorities

The FATF assessment emphasized the need for better coordination between domestic authorities in Iceland to effectively tackle money laundering and terrorist financing. This includes improving communication and cooperation between supervisors, law enforcement agencies, and other relevant authorities.

Prioritizing Better Coordination

To improve its AML/CFT regime, Iceland needs to prioritize better coordination between domestic authorities. This will enable them to share information, identify risks, and take joint action to combat money laundering and terrorist financing.

Conclusion

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The findings of the FATF assessment suggest that Iceland needs to take concrete steps to strengthen its AML/CFT regime. This includes improving internal cooperation and coordination, enhancing supervision, and increasing awareness among financial institutions and non-financial businesses about money laundering and terrorist financing risks.

Recommendations

  • Improve internal cooperation and coordination between domestic authorities
  • Enhance supervision of the financial sector and non-financial businesses
  • Increase awareness among financial institutions and non-financial businesses about money laundering and terrorist financing risks
  • Prioritize tracing and seizing proceeds of crime both domestically and abroad