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Financial Sanctions Regulations in Iceland: A Guide for Obliged Entities
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The government of Iceland has implemented financial sanctions regulations aimed at maintaining peace and security in the world, ensuring compliance with human rights and liberty. These measures are designed to suppress undesirable behavior by coercing states or individuals to change their actions or restrict access to resources.
Duties of Obliged Entities
Obliged entities, such as banks and financial institutions, must comply with these regulations. They are responsible for:
- Monitoring customers on international sanctions lists
- Freezing funds and economic resources
- Reporting suspicious transactions
Restrictive Measures
The restrictive measures implemented in Iceland towards Russia include:
- A ban on trade and services related to aviation and the space industry, including maintenance and repairs
- A prohibition on trading in high-tech products that could strengthen Russia’s military power and related services
Dual-Use Products
Obliged entities must be vigilant about enabling customers to fulfill contracts or other rights and obligations that violate sanctions. This may constitute a breach of the law punishable by:
- Fines or imprisonment up to four years for intentional breaches
- Fines or imprisonment up to one year for gross negligence
Access to Minimum Financial Services
The Central Bank has expressed concerns about access to minimum financial services for refugees and asylum seekers. The European Banking Authority has previously discussed challenges related to this issue in its opinion on financial exclusion.
Guidelines and Resources
- The Financial Supervisory Authority has issued guidelines regarding the monitoring of customers on international sanctions lists and the freezing of funds and economic resources.
- The Ministry for Foreign Affairs has created a website providing summarized information relating to the implementation of restrictive measures in Iceland due to Russia’s military operations in Ukraine.
- Obliged entities can also access educational material from the Steering Group on International Sanctions.
Conclusion
The financial sanctions regulations in Iceland are designed to promote peace, security, and compliance with human rights and liberty. Obliged entities must be vigilant about complying with these regulations to avoid breaching the law and facing legal consequences.