Iceland needs to invest more time and attention on its AML/CTF efforts, according to a newly released review by the Financial Action Task Force(FATF).
Iceland has a strong reputation for cooperation and coordination related to policing financial crimes, but the 2008 banking collapse and the web of complex cases that resulted in Iceland have consumed the nation’s focus relative to financial crimes. FATF is recommending that Iceland carve out substantial attention and resources to boost knowledge and enforcement of global best practices in AML/CTF Compliance across relevant sectors.
FATF asserted, for example, that authorities in Iceland have a “fragmented understanding of AML/CTF risks.” The report noted that the three large commercial banks in the nation have a much better developed knowledge of AML/CTF and Risk-based approaches than other small institutions and businesses that should be aware of money-laundering risks.
According to FATF, these private-sector businesses do not understand risk and often do not fulfill their AML/CTF obligations such as reporting suspicious transactions.
FATF noted that “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.”
Given the “sound legal framework for investigation and prosecution” and a tradition of cooperation with international counterparts, the FATF report expressed optimism that as Iceland commits more attention and resources to AML/CTF Compliance it possesses the capacity to achieve recommendations and gain an acceptable level of AML/CTF Compliance relative to global standards.
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