Ministry for Foreign Affairs

Iceland responds to UK Treasury Select Committee's report in a letter to MPs

12.5.2009

Iceland’s Ambassador in London has sent a letter, on behalf of the Minister for Foreign Affairs Össur Skarphéðinsson, to all Members of the United Kingdom Parliament regarding the Treasury Select Committee Report from 4 April 2009. Nearly 1400 letters were sent in all, covering 646 MPs in the House of Commons and 738 MPs in the House of Lords. The letters were sent out last week.

In the letter, Iceland’s Ambassador to the United Kingdom, Sverrir Haukur Gunnlaugsson, outlines the Icelandic response to the Treasury Select Committee’s report. Strong emphasis is placed on the Committee’s view that, by use of the Anti-Terrorism, Crime and Security Act of 2001 to freeze assets of Landsbanki on 8 October 2008, the UK Government became an active participant rather than a passive observer in the unfolding financial turbulence in Iceland with potentially unforeseen consequences.

The letter recalled the strong ties and long term alliance between Iceland and the UK, but cautioned that the current situation had stigmatized the bilateral relationship. The impact to the Icelandic people, who have been greatly offended and concerned by the legislation, was also raised. Icelanders felt branded as terrorists by their close British allies. Iceland’s position on rescinding the freezing order was reiterated, as well as the importance of such a step for the bilateral relationship.

The Ambassador’s letter also emphasized Iceland’s commitment to cooperate with the UK authorities on reviewing and reforming the European Union financial architecture, especially given how the complexity of the current regulatory framework exacerbated the Icelandic situation. The letter also noted that information in the past weeks indicated a high rate of return to depositors which were not already covered under the deposit insurance schemes.

The letters were all identical in substance. The attached letter was sent to an MP in the House of Commons. . Please click here for a copy.