Financial Intelligence Unit
Money laundering
On January 1, 2019, the Icelandic parliament, Althingi, approved a new comprehensive law on measures against money laundering and terrorist financing. The aim of the law is to prevent money laundering and terrorist financing by requiring parties who engage in activities that could be used for money laundering or terrorist financing to know the identity of their customers and their activities and report to the competent authorities if they suspect or become aware of such illegal activities.
What is money laundering?
The Act on Action against Money Laundering and Financing of Terrorism defines money laundering as:
When a natural or legal person receives benefits, enjoys benefits or obtains benefits or other benefits from a crime punishable by common criminal law or other law; also when a natural or legal person converts such benefits, transfers them, sends them, stores, assists with their delivery, conceals or discloses information about their origin, nature, location, disposal or transfer of benefits or otherwise contributes to ensure the benefits of other people from such criminal offences.
Money laundering can be divided into three stages:
The benefits of the infringement are transferred into the economy, usually through financial institutions. (Placement)
The benefits that have now entered the financial system are transferred within the financial system even more than once to conceal the original ownership. (Layering)
The benefits are transferred into the economy, for example, by buying legal assets such as real estate, cars, shares, etc. (Integration)
What is the primary offense of money laundering?
Initial offenses are those offences that can result in illegal benefits or other gains that are attempted to be laundered. Initial offenses of money laundering can be all violations of general criminal law or other laws. Examples of common initial offenses of money laundering are fraud, embezzlement, tax crimes, drug crimes, corruption crimes and more.
What is self-washing?
When the same party commits the offence and self-inflicts an illegal benefit, it is a case of self-inflicted death. Self-inflicted death can be punishable by up to 6 years in prison according to paragraph 2. 264. gr. almennra hegningarlaga.
Penalties
According to paragraph 1, 264. gr. almennra hegningarlaga, money laundering shall be punishable by up to 6 years in prison if it is intentional and up to 6 months in prison if it is negligent, see paragraph 4. Violations of Article 264 committed within the Icelandic State are punishable by common criminal law, even if the original offence from which the benefits are derived was committed abroad, and regardless of who was responsible.
In the case of benefits from drug offenses, the punishment can be up to 12 years imprisonment according to Article 264 (2) of the General Penal Code.