Iceland’s Financial Crime Reporting Rules: Obliged Entities’ Duty to Notify and Investigate
Reykjavik, Iceland - Iceland’s Financial Intelligence Unit (FIU) enforces stringent reporting measures on its obliged entities, in accordance with international Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations.
Obliged Entities and the Reporting Duty
Obliged entities, comprising financial institutions and designated non-financial businesses and professions, are required to report any suspected transactions, funds, or assets that may have links to criminal conduct.
Interpreting “Suspicion”
The term “suspicion” implies a reasonable doubt, which may not always necessitate thorough and conclusive evidence. Frequent reporting is more advantageous for obliged entities than infrequent reports, and the FIU will further analyze the information provided.
Investigation and Reporting Procedures
Obliged entities bear the responsibility to carry out preliminary investigations once they identify any potential criminal activity. They must avoid engaging in business with parties known or suspected of criminal involvement.
Triggers for Reporting
The following situations may potentially precipitate the reporting duty:
- Transactions without a clear economic or legitimate purpose
- Unusually high or complex transactions
- Transactions that seem unusual when compared to a customer’s history
- Transactions involving parties from high-risk countries
- Transactions that otherwise appear to be of an unusual nature
Reporting Process
To report, obliged entities must utilize the goAML System. Notifications should be clear and concise, detailing the individual or transaction being reported and the reasoning behind the suspicion. In addition, competent authorities in the entity’s home country, such as the Icelandic FIU, must be notified.
Appointing an AML/CFT Compliance Officer
A Mandatory Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) compliance officer must be designated by obliged entities. Typically a member of the entity’s management team, this officer oversees the handling of notifications to the FIU and Central Bank of Iceland, and ensures swift access to essential data, such as customer due diligence records, transactions, and requested transactions.
Raising Awareness and Resources
- Investigation and reporting requirements: educational material by Iceland’s Measures against Money Laundering and Terrorist Financing Steering Group (Icelandic)
- goAML System
For more information and resources, readers can refer to the following links: