Presentation on theme: "Chapter 4, 10 December 2010 Money Laundering. Introduction Due to its obligations arising from the EEA agreement, Iceland has fully transposed the provisions."— Presentation transcript:
Chapter 4, 10 December 2010 Money Laundering
Introduction Due to its obligations arising from the EEA agreement, Iceland has fully transposed the provisions of directives 2005/60 and 2006/70 into Icelandic legislation. Iceland has been a member of FATF (Financial Action Task Force) since The 40 FATF Recommendations on money laundering and the 9 FATF Special Recommendations have been incorporated into Icelandic legislation.
Implementation of directive 2005/60/EC The directive has been transposed with the following legislation: Act No. 64/2006, on measures against money laundering and terrorist financing (AML Act), as amended by Act. 77/2008 and Act 116/2009. General Penal Code No. 19/1940, as amended by Act No. 149/2009. Act on Financial Undertakings, No 161/2002. Regulation No. 626/2006 on the handling of reports on suspected money laundering. Rules of the Financial Supervisory Authority on currency exchange offices and money and value transfer services, No. 917/2009.
Implementation of directive 2005/60/EC The AML Act, No 64/2006, which came into force 2 June 2006, has been amended twice: 1. The first amendment was made in May 2008 by Act No. 77/2008, but its purpose was to respond to FATF´s Mutual Evaluation Report on Iceland, which was published in October The second amendment was made in December 2009 by Act No. 116/2009, with the purpose of responding to remarks that the EFTA Surveillance Authority (ESA) had made concerning the initial implementation of directive 2005/60/EC.
Implementation of directive 2006/70/EC The directive has been fully transposed by the adoption of Regulation No. 811/2008, on politically exposed persons with respect to measures against money laundering and terrorist financing. The Regulation entered into force on 11 August 2008.
Implementation of directive 2008/20/EC The directive has not yet been incorporated into Icelandic legislation because it has not yet been incorporated into the EEA agreement. No foreseen problems with transposing the directive into Icelandic legislation if it will be required.
Overview of Penalties Article 27 of the Act on measures against money laundering and terrorist financing No 64/2006, as amended by Act No 77/2008 : In the event that a person under obligation to report, by intent or gross negligence, neglects to conduct due diligence concerning its customers pursuant to Chapters II and III, or neglects the obligation to report or any other obligations pursuant to Chapter V, or neglects the provision of information or assistance, reports or documents as provided for in this Act or rules issued hereunder, such party shall be subjected to penalties. If a party does not comply with the obligation to register pursuant to Article 25(a), if such party continues its business activities despite having been removed from the register of the Financial Supervisory Authority, or if such party fails to provide information or assistance as provided in this Act, the party shall be subjected to a fine. If an infringement of this Act is committed in the course of the business operations of a legal person, and for its benefit, the legal person may be fined irrespective of whether the guilt of its responsible manager or employee has been established. If the responsible manager of a legal entity or its staff member has infringed this Act, the legal entity may also be fined if the infringement was for its benefit.
Overview of Penalties Article 264 of the General Penal Code, as amended with Act No. 149/2009: Any person who accepts, makes use of or acquires gains, for himself or for others, by violation of this Act, or by punishable violations of other statutes, or who, amongst other things, converts such gains, transports them, sends them, stores them, assists with their delivery, or conceals them or information concerning their origin, nature, location or manner of disposal, shall be imprisoned for up to 6 years. A person who commits the original offence, and also commits an offence under the first paragraph of this Article, shall be subjected to the same punishment as is provided for in that paragraph. In such cases, Article 77 of this Act shall apply as appropriate. In cases involving gains resulting from violations of Article 173 (a) of this Act, punishment of up to 12 years imprisonment may be imposed. If an offence under the first paragraph of this Article is committed through negligence, it shall be punished by a fine or up to 6 months imprisonment.
Overview of Penalties Article 19(d) of the General Penal Code, on the criminal liability of legal persons: Subject to the provisions of this chapter, a legal person can be punished for violations of this Act. The criminal liability of legal persons therefore now covers all original offences according to the General Penal Code, including article 264 concerning money-laundering.
Status of Supervision of obliged entities The Financial Supervisory Authority monitors compliance by the parties specified in Sub-sections (a) to (e): a. Financial undertakings pursuant to the definition in the Act on Financial Undertakings; b. Life insurance companies and pension funds; c. Insurance brokers and insurance intermediaries: d. Branches of foreign undertakings located in Iceland and falling within the scope of Sub-sections (a) to (c); e. Natural or legal persons which, by way of business, engage in foreign exchange trading or the transfer of funds and other assets;
Status of Supervision of obliged entities f) Attorneys and other legal professionals: Self-Regulatory Supervision Supervision of the Disciplinary Board, cf. the Bar Associations AML Guidelines, which refer to Codex Ethicus.
Status of Supervision of obliged entities g) Auditors: Public Auditors Oversight Board has a discipline and supervisory power over auditors. Code of Ethics, came into force in September Future plans to strengthen the powers of the Public Auditors Oversight Board to monitor that auditors fulfill their obligations pursuant to the AML Act No. 64/2006.
Status of Supervision of obliged entities i) Brokers of real estate, enterprises or vessels: The Code of Conduct for Brokers of Real Estate. Legislative proposal amending the act on Brokers of Real Estate, Enterprises and Vessels No. 99/2004. Article 19(k) in the proposed bill calls for the Supervisory Committee to ensure that real estate agents obey to the duties imposed on them in the AML Act, No. 64/2006.
Status of Supervision of obliged entities j ) Natural or legal persons engaged, by way of business, in trading in goods for payment in cash in the amount of EUR or more, based on the officially posted exchange rate at any time, whether the transaction is executed in a single operation or in several operations which appear to be linked: The Consumer Agency shall, according to paragraph 3 of article 25 of the AML Act, monitor that those parties comply with the provisions of the Act.
Status of Supervision of obliged entities k) Trust and company service providers, as defined in Article 3: No trust and company service provider are known to operate in Iceland, but the fact is that lawyers and auditors have provided such services and are therefore supervised as such.
Status of Supervision of obliged entities l) Legal or natural persons who have been granted an operating licence on the basis of the Lotteries Act, and parties permitted under special legislation to conduct fund-raising activities or lotteries where prizes are paid out in cash: According to Article 10 of the Act on Lotteries No 38/2005, the District Commissioner shall monitor the implementation of the Act. The Ministry of Justice and Human Rights monitors the implementation of lotteries under Article 2, paragraph 2 (lotteries where money or tokens of money are at stake that need to be established by law).