Iceland

Member since 1992

Since the 2018 assessment of Iceland’s measures to tackle money laundering and terrorist financing, and its 2019 and 2020 follow-up reports, the country has taken a number of actions to strengthen its framework.

Iceland has been in an enhanced follow-up process following the adoption of its mutual evaluation in 2018, and was subject to increased monitoring between October 2019 and October 2020.

In line with the FATF Procedures for mutual evaluations, the country has reported back to the FATF on the action it has taken since its last follow-up report. Consequently, to reflect Iceland’s progress, the FATF re-rated the country compliant on Regulation and supervision of designated non-financial businesses and professions (Recommendation 28). The country was originally rated non-compliant, then re-rated and maintained at partially compliant in its 1st and 2nd follow-up reports. 

Today, Iceland is compliant on 22 of the 40 Recommendations and largely compliant on 16 of them. It remains partially compliant on 2 Recommendations.

Iceland's progress in strengthening measures to tackle money laundering and terrorist financing

6 Sep 2021

This follow-up report analyses Iceland's progress in addressing the technical compliance deficiencies identified in its 2018 Mutual Evaluation.
Read more 2020 Follow-Up Report First Follow-Up Report

FATF's 2018 assessment of Iceland's measures to combat money laundering and terrorist financing concluded that Icelandic authorities have a fragmented understanding of AML/CFT risks, which is not used for further policy development.  Although supervisors are beginning to identify areas of risk relevant to their sectors, they need to further enhance their supervisory roles and their use of the risk-based approach. Iceland should also explore the specific risks associated with legal persons and arrangements and improve the availability of beneficial ownership information.

Iceland must use its ability to coordinate domestic authorities and put practices in place to strengthen its efforts to tackle money laundering and terrorist financing. During the assessment, the country demonstrated a commitment to take the necessary action to do so and the FATF assessment welcomed the steps that the country had already taken since that time. 

Ratings

Technical Compliance

Ratings which reflect the extent to which a country has implemented the technical requirements of the FATF Recommendations.

Iceland Follow-Up Report - 2021

R.1 - Assessing risk & applying risk-based approach
C
R.2 - National cooperation and coordination
C
R.3 - Money laundering offence
C
R.4 - Confiscation and provisional measures
LC
R.5 - Terrorist financing offence
LC
R.6 - Targeted financial sanctions related to terrorism & terrorist financing
C
R.7 - Targeted financial sanctions related to proliferation
C
R.8 - Non-profit organisations
LC
R.9 - Financial institution secrecy laws
C
R.10 - Customer due diligence
C
R.11 - Record keeping
C
R.12 - Politically exposed persons
C
R.13 - Correspondent banking
PC
R.14 - Money or value transfer services
LC
R.15 - New technologies
PC
R.16 - Wire transfers
C
R.17 - Reliance on third parties
C
R.18 - Internal controls and foreign branches and subsidiaries
LC
R.19 - Higher-risk countries
C
R.20 - Reporting of suspicious transactions
C
R.21 - Tipping-off and confidentiality
C
R.22 - DNFBPs: Customer due diligence
C
R.23 - DNFBPs: Other measures
LC
R.24 - Transparency and beneficial ownership of legal persons
LC
R.25 - Transparency and beneficial ownership of legal arrangements
C
R.26 - Regulation and supervision of financial institutions
LC
R.27 - Powers of supervisors
C
R.28 - Regulation and supervision of DNFBPs
C
R.29 - Financial intelligence units
LC
R.30 - Responsibilities of law enforcement and investigative authorities
C
R.31 - Powers of law enforcement and investigative authorities
C
R.32 - Cash couriers
C
R.33 - Statistics
LC
R.34 - Guidance and feedback
C
R.35- Sanctions
LC
R.36 - International instruments
LC
R.37 - Mutual legal assistance
LC
R.38 - Mutual legal assistance: freezing and confiscation
LC
R.39 - Extradition
LC
R.40 - Other forms of international cooperation
LC

C = compliant   |   LC = largely compliant     |   PC = partially compliant   |   NC = non-compliant

Effectiveness

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Iceland Mutual Evaluation - 2018

IO1
LE
IO2
SE
IO3
LE
IO4
LE
IO5
LE
IO6
ME
IO7
ME
IO8
ME
IO9
ME
IO10
LE
IO11
LE

HE = high level of effectiveness   |   SE = substantial level of effectiveness    |   ME = moderate level of effectiveness   |   LE = low level of effectiveness

Other related content