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.

Corruption in Iceland is not a significant barrier to foreign investment, as evidenced by its ranking of 19 out of 180 on Transparency International’s Corruption Perceptions Index in 2023. While isolated cases of corruption exist, the rule of law is strong, and the government has implemented measures such as a Code of Conduct for public officials and laws against bribery. However, evaluations by GRECO indicate that Iceland has not fully complied with anti-corruption recommendations, highlighting ongoing challenges in addressing conflicts of interest and ensuring integrity within its institutions.

Iceland has an advanced economy primarily driven by fisheries, tourism, and aluminum production, with significant U.S. investment in the aluminum sector and growing interest in tourism. The country has seen a robust recovery in tourism post-COVID-19, with over 2.2 million visitors in 2023, and is projected to attract 2.4 million tourists in 2024. Additionally, Iceland's focus on innovation and renewable energy, particularly in its IT and biotech sectors, positions it as an attractive market for foreign investment.

Iceland has an open investment climate, with the government actively promoting foreign direct investment (FDI) through the public-private agency "Invest in Iceland," which provides information and incentives to potential investors. Key sectors for investment include tourism, energy, innovation, and fisheries, with significant opportunities in high-end tourism and renewable energy industries. The Icelandic government recognizes the importance of FDI for economic prosperity and is committed to balancing energy-intensive investments with environmental considerations.