The high fines meted out to high-profile white collar criminals are seldom affordable. If they cannot be paid, the criminals can serve a prison sentence instead. Iceland’s prisons are full, however and the National Audit Office fears that the lack of prison capacity could decide what sentences are given.
Fines for tax avoidance/fraud were increased significantly in 1995 and four years later, a law was passed to allow for community service as a substitute punishment. According to Iceland’s National Audit Office, community service is a softer option and the second law works counter to the first one. It is therefore important to build a new prison to relieve this problem.
National auditors are keen to ensure that justice is seen to be done if and when financial criminals are brought to justice.
Between 2000 and 2006, around 80 percent of those fined ISK 8 million or more opted for community service instead.
A tax fraud case brought against Jon Asgeir Johannesson, Tryggvi Jonsson, Kristin Johannesdottir, Baugur Group and the Gaumur investment company has hit a snag with the defendants claiming a sort of ‘double jeopardy’.
An information sharing contract has been signed between the Nordic nations and the Bahamas, intended to hinder Nordic tax evasion.