Iceland Country Summary

FATF Status

Iceland is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Iceland was undertaken in 2021. According to that Evaluation, Iceland was deemed Compliant for 22 and Largely Compliant for 16 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

Iceland experiences isolated cases of corruption, which do not significantly hinder foreign investment or raise major concerns within the government. While the country has established various measures to combat corruption, such as a Code of Conduct for government staff and a new law addressing conflicts of interest, there are criticisms regarding the lack of a comprehensive anti-corruption strategy and insufficient compliance with international recommendations.

Organized crime in Iceland includes drug trafficking, cybercrime, and money laundering, with both domestic and foreign criminal groups involved, particularly from Central and Eastern Europe. Although the government has specialized units to tackle these issues, the overall capacity to combat organized crime is perceived as low, prompting ongoing efforts to enhance governance and financial controls in response to these challenges.

Iceland boasts a robust economy primarily driven by fisheries, tourism, and aluminum production, with significant U.S. investments in the aluminum sector and a growing presence in tourism. The Icelandic government actively promotes foreign direct investment (FDI) through initiatives like "Invest in Iceland," which provides incentives and support for investors, particularly in key sectors such as tourism, energy, and innovation. Despite challenges such as inflation and the impacts of global events, Iceland's favorable business climate, skilled workforce, and commitment to sustainability position it as an attractive destination for foreign investment and economic growth.