Iceland Grey Listed for Inadequate Money Laundering Policies(icelandreview.com)
icelandreview.com
Iceland Grey Listed for Inadequate Money Laundering Policies
https://www.icelandreview.com/news/iceland-grey-listed-for-inadequate-money-laundering-policies/
36 comments
Excuse the intemperate tone but you could also consider this is a move by the financial institutions in London to remove some competition.
I mean you could, but also Iceland’s financial institutions hard-fucked a lot of people, the government didn’t back them up ... it seems right that Iceland loses its risky financial license for a while
Can we get a hyphen or removal of a space in the title please? “Iceland Grey” sounds like a real noun.
I thought a vodka producer got listed somewhere for money laundering... ("Iceland Grey" sounds like a drink brand name)
Iceland Is Being / Has Been ...
I posted and agree, but I can’t change the title now.
I really don't understand what the below law has to do with money laundering.
You can't get a trial before they try and sell your assets?
This is really bad and I had hoped this would be reformed in the USA. Instead we are forcing it on small countries? Crazy shit.
"The other law empowers parliament to sell assets that have been confiscated or frozen during a criminal investigation (on certain conditions, such actions may be taken before a ruling is reached in court)"
You can't get a trial before they try and sell your assets?
This is really bad and I had hoped this would be reformed in the USA. Instead we are forcing it on small countries? Crazy shit.
"The other law empowers parliament to sell assets that have been confiscated or frozen during a criminal investigation (on certain conditions, such actions may be taken before a ruling is reached in court)"
Money laundering laws are like the war on drugs: they cause a huge amount of inconvenience to common people but completely fail at their objective.
Exactly this. Recently Xoom and Western Union banned a friend from sending monthly remittances to his relatives back in Africa; he sends like $100 each, to eight relatives in Africa. First Western Union banned him, because it found him suspicious. Later, Xoom also banned him. Weird excuse was that some bank/store clerk in Africa has suspicions about these transactions.
So do you think to these people something like Bitcoin would have an appeal? I am asking because the theme that Bitcoin has no appeal has come up a couple times lately here on HN and some people think it is completely useless. I have never used Bitcoin so do not know it's limitations. Could your friend conveniently send his family money in Africa that way?
Article doesn't mention who the FATF is, what makes them or their assessments legitimate, or who is using the FATF to apply leverage against Iceland, and why.
It would be funny if in 100 years we looked back on the cause of so much conflict in the world and found it reduced to the proliferation and tyranny of the passive voice.
Ah wait, make that 75 years. https://en.wikipedia.org/wiki/Politics_and_the_English_Langu...
It would be funny if in 100 years we looked back on the cause of so much conflict in the world and found it reduced to the proliferation and tyranny of the passive voice.
Ah wait, make that 75 years. https://en.wikipedia.org/wiki/Politics_and_the_English_Langu...
Money laundering law essentially originates with the USA and works like this: if you move money around, you have to stop criminals using your services and report anything suspicious to the authorities.
Failure is transitive. If Bank A provides services to Bank B and Bank B opens an account for someone who later turns out to have been a drug dealer, then the management of Bank A can be criminally prosecuted.
Still, that doesn't sound so bad, does it? Only one tiny problem. The penalty for failing to stop criminals is that you, yourself, Mr CEO of the bank, become a criminal too and conscious participation in crime is not required. That you tried hard to fight crime is no excuse. Failure to stop crime IS crime, end of story.
Obviously it didn't start out this way. The original laws were interpreted as is normal, with a mens rea requirement, i.e. you had to actually intend to break the law. That was removed in the general freakout following Sept 11th in the PATRIOT Act, although I'm sure it'd have been removed at some point anyway because really, you can't stop terrorism through the banking system. Terrorist attacks are invariably very cheap, far too cheap to spot from the desk of a banker. Nonetheless, this pernicious result persisted.
Anti money laundering doesn't work that well if it's restricted to one country. Criminals can just insert their illegitimate money in some other country and wire to the first. So AML has to be a global system if it's to have any chance of being effective. Thus the "FATF" was set up and became one of the many obscure international organisations that that make up so-called international law, who are beholden to nobody, and whose powers are effectively written into the regulations of every country. FATF got this power because the USA threatened to ban any country that didn't comply from using the dollar. Once you agree to obey the FATF's "recommendations" a country is itself required to blacklist any country that doesn't, so, eventually more or less every country has fallen into line.
So the best way to answer your question is:
1. FATF is an international organisation that sets the global AML rules.
2. Nothing gives them any democratic legitimacy. There is nothing you can do if you disagree with their decisions, not even voting for new politicians, not unless you want to start a financial/banking war with the entire world simultaneously.
3. Why: because the system propagates itself. That's what it's designed to do.
Failure is transitive. If Bank A provides services to Bank B and Bank B opens an account for someone who later turns out to have been a drug dealer, then the management of Bank A can be criminally prosecuted.
Still, that doesn't sound so bad, does it? Only one tiny problem. The penalty for failing to stop criminals is that you, yourself, Mr CEO of the bank, become a criminal too and conscious participation in crime is not required. That you tried hard to fight crime is no excuse. Failure to stop crime IS crime, end of story.
Obviously it didn't start out this way. The original laws were interpreted as is normal, with a mens rea requirement, i.e. you had to actually intend to break the law. That was removed in the general freakout following Sept 11th in the PATRIOT Act, although I'm sure it'd have been removed at some point anyway because really, you can't stop terrorism through the banking system. Terrorist attacks are invariably very cheap, far too cheap to spot from the desk of a banker. Nonetheless, this pernicious result persisted.
Anti money laundering doesn't work that well if it's restricted to one country. Criminals can just insert their illegitimate money in some other country and wire to the first. So AML has to be a global system if it's to have any chance of being effective. Thus the "FATF" was set up and became one of the many obscure international organisations that that make up so-called international law, who are beholden to nobody, and whose powers are effectively written into the regulations of every country. FATF got this power because the USA threatened to ban any country that didn't comply from using the dollar. Once you agree to obey the FATF's "recommendations" a country is itself required to blacklist any country that doesn't, so, eventually more or less every country has fallen into line.
So the best way to answer your question is:
1. FATF is an international organisation that sets the global AML rules.
2. Nothing gives them any democratic legitimacy. There is nothing you can do if you disagree with their decisions, not even voting for new politicians, not unless you want to start a financial/banking war with the entire world simultaneously.
3. Why: because the system propagates itself. That's what it's designed to do.
> Article doesn't mention who the FATF is, what makes them or their assessments legitimate, or who is using the FATF to apply leverage against Iceland, and why.
> It would be funny if in 100 years we looked back on the cause of so much conflict in the world and found it reduced to the proliferation and tyranny of the passive voice.
> Ah wait, make that 75 years. https://en.wikipedia.org/wiki/Politics_and_the_English_Langu....
Wikipedia has a load of information on this organization: https://en.m.wikipedia.org/wiki/Financial_Action_Task_Force_...
> It would be funny if in 100 years we looked back on the cause of so much conflict in the world and found it reduced to the proliferation and tyranny of the passive voice.
> Ah wait, make that 75 years. https://en.wikipedia.org/wiki/Politics_and_the_English_Langu....
Wikipedia has a load of information on this organization: https://en.m.wikipedia.org/wiki/Financial_Action_Task_Force_...
looks like Iceland didn't meet FATF KPI on the number of suspicious transactions reported. Probably Iceland need to work harder to bring in new clients like Mexican drug cartels and Russian oligarchs:
https://www.fatf-gafi.org/fr/publications/evaluationsmutuell...
"With the exception of the three large commercial banks in Iceland, the financial sector and non-financial businesses and professions have a poor understanding of the money laundering or terrorist financing risks to which they are exposed. These private sector entities have limited awareness of their AML/CFT obligations and report very few suspicious transactions in light of the risks present."
https://www.fatf-gafi.org/fr/publications/evaluationsmutuell...
"With the exception of the three large commercial banks in Iceland, the financial sector and non-financial businesses and professions have a poor understanding of the money laundering or terrorist financing risks to which they are exposed. These private sector entities have limited awareness of their AML/CFT obligations and report very few suspicious transactions in light of the risks present."
One would think that Iceland would have learn to reign in their financial sector after 2008. But hey, maybe they just like it like that up there ...
This decision has nothing to do with the financial sector in Iceland. It is the government that has allegedly failed to implement some required changes, specifically it is some software that some government agency is supposed to be running already.
Speaking generally, money laundering is probably good for small, cash-poor countries. Probably not much motivation to stop it besides, well, things like the topic of this article.
As 2008 demonstrated so painfully. Iceland is extremely vunerable to misconduct in its financial sector.
A population of just 350,000 people; a free floating currency, outside the EU. Main industries are fishing and a tourist boom driven by a single TV show.
How big is the Icelandic financial sector? Compromising Ministry of finance, the central bank and the private banks. A thousand people? How do you have proper checks and balances in an environment like that? How do you prevent nepotism or outright corruption?
A population of just 350,000 people; a free floating currency, outside the EU. Main industries are fishing and a tourist boom driven by a single TV show.
How big is the Icelandic financial sector? Compromising Ministry of finance, the central bank and the private banks. A thousand people? How do you have proper checks and balances in an environment like that? How do you prevent nepotism or outright corruption?
Native Icelander here, short answer you don't.
Iceland is a mess in many many ways that never reach the international media.
Nepotism is rampant (it's very hard to have anyone vaguely related up the genealogical tree somehow)
Foreigners are extorted and mistreated as a rule of thumb
The cost of living is high and the government does little to alleviate this burden on most of the tax base.
For me it's extremely heartbreaking to see all the ridiculous posts of foreigners on reddit asking how they can move here not understanding what they'll be committing to.
Iceland is a mess in many many ways that never reach the international media.
Nepotism is rampant (it's very hard to have anyone vaguely related up the genealogical tree somehow)
Foreigners are extorted and mistreated as a rule of thumb
The cost of living is high and the government does little to alleviate this burden on most of the tax base.
For me it's extremely heartbreaking to see all the ridiculous posts of foreigners on reddit asking how they can move here not understanding what they'll be committing to.
Thanks for writing. The story of icelandic corruption is really not coming out, not even in other scandinavian countries (where I am). I would hope the nordic countries would be allies in turning Iceland around, but I guess they can't do much unilaterally.
"I'm part of political group X, this is how I see my country, and in particular I dislike the successful business people in my country."
> Nepotism is rampant
Where? It's just not true that relatives are getting jobs unfairly that they may not have the skills to do. I don't think you understand what nepotism is. I do think that you don't understand what networking looks like among smart people that have a high general factor of personality, and I think that this is your way of striking back at what you see is an unfair advantage among people that network well.
> Foreigners are extorted and mistreated as a rule of thumb
If there's a tiny perceived wronging by a foreigner, the press is ready to blow it completely out of proportion and completely misrepresent companies who in the end decide to let it go instead of suing the press, for risk of looking even more like the bad guys in the eyes of people like you. Again, I think you've taken a headline or a TV piece out at face value and formed an unfair opinion on innocent business leaders.
> Nepotism is rampant
Where? It's just not true that relatives are getting jobs unfairly that they may not have the skills to do. I don't think you understand what nepotism is. I do think that you don't understand what networking looks like among smart people that have a high general factor of personality, and I think that this is your way of striking back at what you see is an unfair advantage among people that network well.
> Foreigners are extorted and mistreated as a rule of thumb
If there's a tiny perceived wronging by a foreigner, the press is ready to blow it completely out of proportion and completely misrepresent companies who in the end decide to let it go instead of suing the press, for risk of looking even more like the bad guys in the eyes of people like you. Again, I think you've taken a headline or a TV piece out at face value and formed an unfair opinion on innocent business leaders.
Okay, as a layman, can you clarify a scenario where (even huge-scale) money laundering would pose a similar threat to the stability of the Icelandic banking system as the misbehaviour of banks on an international level leading up to 2008?
Not too related, but Iceland may be in a better position than most countries to displace it's current currency with their own state level crypto currency. Now THAT would really be an F-U to the banks. Creating a currency that allows for open trade pretty much person to person anywhere in the world and supporting it.
A currency which you cannot easily exchange to other currencies has a quite limited utility.
And its not complying to AML rules will make it impossible for any legitimate organization to do such an exchange.
This is how 911 terrorists won: they produced enough terror and panic to temporarily overcome reason and make decisions that crippled Western world, and with it most other countries, for decades to come.
And its not complying to AML rules will make it impossible for any legitimate organization to do such an exchange.
This is how 911 terrorists won: they produced enough terror and panic to temporarily overcome reason and make decisions that crippled Western world, and with it most other countries, for decades to come.
Did the 911 terrorists really spend millions of dollars on that operation? I don't think so.
I'm not in support of terrorism, I'm also not in support of the government sticking their nose into every single transaction between two people.
I'm not in support of terrorism, I'm also not in support of the government sticking their nose into every single transaction between two people.
My first thought was “who is Iceland Grey”?
Maybe you should read at least the first sentence of articles, and not just the headline, before commenting?
It isn't a race.
It isn't a race.
https://grapevine.is/news/2019/10/10/fatf-iceland-needs-to-d...
https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/...