
Iceland Grey Listed for Inadequate Money Laundering Policies - punnerud
https://www.icelandreview.com/news/iceland-grey-listed-for-inadequate-money-laundering-policies/
======
scottlocklin
This is a pretty weird thing, and not inconsistent with simple payback for
Iceland telling creditors (mostly in the UK) to get stuffed back in 2008.
Apparently they've recently plugged back into the international system, who
are hopping mad they can't shut down Icelandic NGOs if they're involved in
.... non proliferation or terrorism activities. Maybe some North Korean
business nobody is talking about?

[https://grapevine.is/news/2019/10/10/fatf-iceland-needs-
to-d...](https://grapevine.is/news/2019/10/10/fatf-iceland-needs-to-do-more-
to-combat-money-laundering-terrorist-financing/)

[https://www.fatf-
gafi.org/media/fatf/documents/reports/mer4/...](https://www.fatf-
gafi.org/media/fatf/documents/reports/mer4/MER-Iceland-2018-Executive-
Summary.pdf)

~~~
smackay
Excuse the intemperate tone but you could also consider this is a move by the
financial institutions in London to remove some competition.

~~~
peteretep
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

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peteretep
Can we get a hyphen or removal of a space in the title please? “Iceland Grey”
sounds like a real noun.

~~~
vinay427
I would second this. I had to re-read the title twice before deciphering the
meaning on my third attempt.

~~~
mrec
Thirded, I assumed it was a close relative of the Norwegian Blue.

------
frankharv
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)"

~~~
logicchains
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.

~~~
raincom
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.

~~~
14
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?

~~~
gerikson
The AML requirements will just shift to the institutions where this person
exchanges their dollars to Bitcoin.

~~~
jdc
Eh, lots of people work under the table as it is. How hard could it be to get
some of that in cryptocurrency?

------
motohagiography
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...](https://en.wikipedia.org/wiki/Politics_and_the_English_Language)

~~~
repolfx
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.

------
trhway
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...](https://www.fatf-
gafi.org/fr/publications/evaluationsmutuelles/documents/mer-
iceland-2018.html?hf=10&b=0&s=desc\(fatf_releasedate\))

"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."

------
chvid
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 ...

~~~
wjn0
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.

~~~
chvid
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?

~~~
mr_woozy
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.

~~~
kzrdude
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.

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tracker1
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.

~~~
nine_k
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.

~~~
tracker1
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.

------
Scoundreller
My first thought was “who is Iceland Grey”?

~~~
freddie_mercury
Maybe you should read at least the first sentence of articles, and not just
the headline, before commenting?

It isn't a race.

