Offshore króna assets

The principal objective of the Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions, no. 37/2016, was to segregate offshore krónur in a secure manner so that it would be possible to take the next step towards lifting the capital controls and re-establishing unrestricted cross-border transactions with krónur without jeopardising financial stability or monetary or exchange rate stability.

Since the capital controls were introduced, offshore króna assets and other króna-denominated assets have been subject to the restrictions laid down in the Foreign Exchange Act and the Rules on Foreign Exchange. The Act legalised the segregation of these assets so as to facilitate general liberalisation of capital controls in line with the three-phase approach outlined by the International Monetary Fund (IMF) while simultaneously expanding offshore króna holders’ authorisations for investment and withdrawals.