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 high ranking on Transparency International's Corruption Perceptions Index. 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 lacks a comprehensive anti-corruption policy and has not fully complied with many of their recommendations, highlighting ongoing challenges in addressing institutional weaknesses.

Iceland has an advanced economy primarily driven by fisheries, tourism, and aluminum production, with significant U.S. investment concentrated in the aluminum sector. The tourism industry has seen a remarkable recovery post-COVID-19, with over 2.2 million visitors in 2023, and is expected to grow further in 2024. Additionally, Iceland's commitment to renewable energy, with over 99% of its power sourced from renewables, enhances its attractiveness for energy-dependent industries.

Iceland has an open investment climate, with the government recognizing foreign direct investment (FDI) as crucial for economic prosperity and innovation. The public-private agency "Invest in Iceland" promotes foreign investment by providing information and incentives, particularly in key sectors such as tourism, energy, and life sciences. Despite some restrictions in areas like fishing and energy, Iceland remains an attractive destination for U.S. investors, especially in the aluminum and tourism sectors.