Iceland’s Anti-Terrorism Financing Regulations Under Scrutiny

A recent report by the Financial Action Task Force (FATF) has assessed Iceland’s implementation of anti-terrorism financing regulations, revealing a mixed bag of compliance. While the country has made significant progress in some areas, it still faces challenges in others.

Compliance Ratings

According to the FATF’s ratings system, which measures countries’ adherence to its 40 Recommendations for Combating Money Laundering and Terrorist Financing, Iceland received high marks in several key areas. Specifically:

• Risk Assessment: Rated “compliant” (C)
• National Cooperation and Coordination: Rated “compliant” (C)
• Money Laundering Offences: Rated “compliant” (C)
• Terrorist Financing Offences: Rated “compliant” (C)
• Targeted Financial Sanctions: Rated “compliant” (C)
• Customer Due Diligence: Rated “compliant” (C)

Areas for Improvement

However, Iceland faced issues in other areas:

• Confiscation and Provisional Measures: Rated “largely compliant” (LC)
• Correspondent Banking: Rated “partially compliant” (PC)
• New Technologies: Rated “partially compliant” (PC)
• Financial Institution Secrecy Laws: Found to be non-compliant (NC)

Key Recommendations

The report highlights the importance of:

• Effective Regulation and Supervision: Iceland was commended for its efforts in this regard, with several recommendations rated “compliant” or “largely compliant”.
• Transparency and Beneficial Ownership: Iceland was rated “largely compliant”, but further improvements are needed.
• Powers of Supervisors and Law Enforcement Authorities: These powers were found to be lacking in some respects.

Conclusion

Overall, while Iceland has made significant progress in implementing anti-terrorism financing regulations, there is still much work to be done. The country must continue to strengthen its regulatory framework and improve cooperation with international partners to effectively combat money laundering and terrorist financing.