Iceland Tackles Financial Crime with Tough New Measures
Reykjavik - In an effort to combat the growing threat of financial crime, Iceland has introduced a range of new measures aimed at preventing money laundering and terrorist financing. The country’s Central Bank of Iceland (CBI) is now responsible for supervising entities that engage in activities vulnerable to these illicit practices.
The Threat of Financial Crime
According to experts, money laundering is a key enabler of organized crime, allowing criminals to conceal the source of their ill-gotten gains and launder them through legitimate businesses. This not only undermines trust in financial institutions but also distorts market forces and hampers free competition.
The New Act: A Stronger Approach to Financial Crime Prevention
The new Act no.140/2018 on measures against Money Laundering and Terrorist Financing imposes strict obligations on parties engaged in activities susceptible to money laundering or terrorist financing. These entities are now required to:
- Know the identity of their customers
- Monitor their transactions
- Report any suspicious activity to the authorities
Enforcement and Compliance
The CBI has been granted significant powers to ensure compliance with these new regulations. The central bank can impose penalties for non-compliance, including:
- Administrative fines
- Dismissal of board members and managing directors
- Revocation of operating licenses
- Application of sanctions
Combating Terrorist Financing
Terrorist financing is another major concern for Iceland’s authorities. The country is signatory to several international agreements aimed at combating this scourge, and the new Act reinforces its commitment to preventing the flow of funds to terrorist organizations.
A Bold Step Forward
The introduction of these measures marks a significant shift in Iceland’s approach to financial crime prevention. The country’s authorities recognize that robust supervision and strict regulations are essential to protecting its financial system and reputation.
As one expert noted, “Iceland has taken a bold step in tackling financial crime head-on. By imposing strict obligations on entities engaged in activities vulnerable to money laundering or terrorist financing, the country is sending a strong message to criminals that it will not tolerate such activity.”