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Ministry of Industries and Innovation

Act no. 73 24 May 2005 on Tourism Administration

Act no. 73

24 May 2005

Tourism Administration Act

 

SECTION I

Objective and Ultimate Authority

 

Article 1

The purpose of this Act is to promote the development of tourism as an economic sector

and an important facet of Icelandic economic and societal activity. The guiding principles

shall be economic efficiency, Icelandic culture, environmental protection,

professionalism, and the safeguarding of consumer interests.

 

Article 2

The Minister of Industry shall have the ultimate

authority over matters covered by this Act unless otherwise stipulated by law.

 

Article 3

The Icelandic Tourist Board shall handle the implementation of tourism affairs pursuant

to this Act, as has been stipulated in other legislation.

The Minister of Industry shall appoint the Director

of the Icelandic Tourist Board for a term of five years. The Director shall function as the

presiding officer of the Icelandic Tourist Board. The Director of the Icelandic Tourist

Board shall hire other Board employees.

 

Article 4

The chief duties of the Icelandic Tourist Board are the following:

1. Issuance of licences, registration of operations, and monitoring in order to ensure that requirements for operations are met.

2. Development, quality control, and organisational issues related to tourism; that is, the

implementation of a defined tourism strategy, the co-ordination of environmental and

educational affairs, the dissemination of information, regional and local development,

and international collaboration.

3. Marketing and promotion of tourism services in accordance with the Minister's

decision as current at any given time.

The Minister may, in a regulation, stipulate further concerning the role and functions of

the Icelandic Tourist Board and concerning individual projects under the Board's

auspices.

The Icelandic Tourist Board is authorised, upon obtaining the approval of the Minister, to

assign to others the task of handling specific projects and acting as parties to

collaborative projects, including acquiring ownership shares in companies operating in

specific sectors.

 

Article 5

The Minister shall appoint the Icelandic Tourism Council, which shall comprise ten

representatives. The chairman and vice-chairman shall be appointed by the Minister

without nomination, and other representatives shall be appointed by the Minister upon

receipt of nominations from the following parties: The Icelandic Travel Industry

Association, which shall nominate three representatives; the Association of Local

Authorities in Iceland, which shall nominate two representatives; the Iceland Tourism

Association, which shall nominate two representatives, and the Trade Council of Iceland,

which shall nominate one representative. The term of appointment for members of the

Icelandic Tourism Council shall be four years; however, the terms of appointment for the

chairman and vice-chairman shall be limited to the appointing Minister's tenure in office.

The Director of the Icelandic Tourist Board and a representative of the Ministry shall

attend Tourism Council meetings and shall have the right both to address the meetings

and to present proposals.

 

Article 6

At least once a year, the Icelandic Tourism Council shall make recommendations to the

Minister concerning the marketing and promotion of tourist services. In addition, the

Icelandic Tourism Council shall act as the Minister's advisor on matters involving tourist

affairs planning. The Tourism Council shall provide commentary on amendments to

tourism-related legislation and regulations and on other matters assigned to it by the

Minister; the Council shall also provide commentary on matters that it deems it

appropriate to address in the interests of the tourism industry.

The Minister is authorised to issue a regulation on the activities of the Icelandic Tourism

Council.

 

SECTION II

 

Definitions

Article 7

For the purposes of this Act, the following terms shall have the following meanings:

1. For the purposes of this Act, tour operator shall refer to a party, either an individual or

a legal entity, who, either on his own initiative or at the request of a customer, organises,

offers, and sells professionally the following tourism-related services to the public:

a. The organisation and sale of tours to groups and individuals, and the

organisation of tours, stays, and leisure-time activities, both in Iceland and

abroad.

b. The organisation of meetings, exhibitions, and conferences and any

services related thereto, both in Iceland and abroad.

c. Any sort of agency retailing or resale of tickets for travel by ship,

automobile, aircraft, or railway.

d. Leisure-time activities, such as horseback-riding tours, snowmobile

tours, river rafting tours, and adventure tours using specially equipped

motor vehicles.

e. Travel and refreshments as a part of services rendered.

2. For the purposes of this Act, travel agency shall refer to a party, either an individual or

a legal entity, who, either on his own initiative or at the request of a customer, organises,

offers, and sells package tours professionally, either in Iceland or abroad.

A travel agency may also handle and offer all travel-related services offered by a tour

operator, whether these are provided in the form of package tours or not.

The term “travel agency” refers both to tourism wholesalers and to tourism retailers

pursuant to Act no. 80/1994 on Package Tours.

3. For the purposes of this Act, booking services refers to the operation of all types of

booking services offered to the public, to tour operators, and to travel agencies, whether

within Iceland or abroad; this shall include electronic booking services.

4. For the purposes of this Act, information centre refers to a party who provides

impartial information to the public. An information centre neither organises nor sells nor

advertises tours or other travel-related activities.

5. For the purposes of this Act, package tour refers to a predetermined combination of no

fewer than two of the following items: transportation, accommodation, and/or other

services rendered to the customer, which services cover a significant portion of the tour,

when the tour is sold or offered for sale at an all-inclusive price and when services related

to the tour cover a period of at least 24 hours or include accommodation. A tour shall be

considered a package tour even if separate invoices are prepared for each portion of the

tour and payment is made in portions.

6. Operations requiring licensing refers to all operations and services that are provided

by tour operators and travel agencies and fall under the definition of the law, whether

these operations and services are provided by an individual, a company, or an

organisation.

7. For the purposes of this Act, operations requiring registration refers to all operations

of booking services and information centres, whether the services thus provided are

rendered by an individual, a company, or an organisation.

8. For the purposes of this Act, a customer may be an individual, a company, an

organisation, or an institution.

 

SECTION III

Tour operator and travel agency licences

Article 8

Any party intending to operate as a tour operator or travel agency shall obtain a licence to

do so from the Icelandic Tourist Board. The licence shall be issued by the Icelandic

Tourist Board, and the licensee shall display it in his place of business.

The Icelandic Tourist Board shall have a graphic identification or logo that licensees are

authorised to use upon issuance of the licence. The licensee shall use this logo in all

advertisements of his operations, as well as on his Internet website.

The licence to operate a travel agency or to function as a tour operator is not subject to

expiry.

Only those parties who have been granted a licence pursuant to this Act are authorised to

use the term “tour operator” or “travel agency” in the name or title of their business.

A tour operator or travel agency's business shall be operated at a fixed location that is

open to the public at specified times. This requirement may be waived, however, if the

service is operated solely on an electronic basis, in which case the licensee must fulfil the

conditions stipulated in Article 6 of the Act on Electronic Commerce and Other

Electronic Services, no. 30/2002, concerning the information that must appear on the

licensee's Internet website.

It is permissible, on the basis of the licence, to operate a branch of a tour operator or

travel agency's operations. The party responsible for such a branch shall also meet the

requirements stipulated in Article 9.

The Icelandic Tourist Board shall maintain a register of those holding licences pursuant

to this Act and shall publish it in an accessible manner; for example, on its Internet

website. The revocation of such licences shall also be announced on the Internet website.

The Icelandic Tourist Board shall decide which Icelandic travel associations shall be

exempt from the provisions of this Act with respect to travel within Iceland.

 

Article 9

An application for a licence to operate a travel agency or act as a tour operator shall be

filed with the Icelandic Tourist Board at least two months before the proposed activities

are to begin.

In order to receive a licence, the applicant, or his representative if the applicant is a legal

entity, must meet the following requirements:

a. He must be resident of Iceland.

b. He must be at least 20 years of age.

c. He must be legally competent and may not, during the last four years,

have been convicted of an offence that is related to a commercial activity

and is punishable under the General Penal Code, the present Act, or the

acts on limited liability companies, private limited liability companies,

bookkeeping, annual accounts, bankruptcy or public levies.

d. He must be entitled under the law to dispose of his estate.

e. He may not have had a licence to operate a travel agency or act as a tour

operator revoked within three years prior to the date of the application.

The applicant shall furnish confirmation that security has been provided, as is specified in

Section V, before the licence to operate a travel agency may be granted.

The application for a licence shall specify the name of the tour operator or travel agency

and shall specify all alternate names that the party intends to use in his operations. It is

prohibited to conduct business activities under names other than those specified in the

licence.

It is permissible to add alternate names to a licence that has been issued if the licensee

files a special application with the Icelandic Tourist Board, which shall issue a new

licence at no charge.

A foreign tour operator or foreign travel agency intending to open a branch in Iceland

shall apply for a licence and shall provide proof of security for its activities pursuant to

further provisions of this Act.

The licensee is authorised to return his licence to the Icelandic Tourist Board; however, a

travel agency is not permitted to cancel its security pursuant to this Act until it has

received the Icelandic Tourist Board's confirmation of the receipt of the licence.

 

Article 10

The Minister may, in a regulation, set forth detailed rules concerning both licence

applications and procedures for the issuance of licences.

 

SECTION IV

 

Operations requiring registration

Article 11

Those intending to engage in operations for which registration is required pursuant to this

Act shall send the Icelandic Tourist Board a written notice to this effect.

The Icelandic Tourist Board shall issue a certificate confirming that the operations have

been reported and that they meet the notification requirements set forth in this Act.

The Icelandic Tourist Board shall maintain a register of those parties who have submitted

notification of their activities and shall publish it in an accessible manner; for example,

on its Internet website.

 

Article 12

Only those parties who have received a certificate pursuant to this Act are authorised to

use the terms “booking service(s)” and “information centre” in the name or title of their

operations.

Registered parties are authorised to use the logo of the Icelandic Tourist Board.

Information centres receiving public funding shall keep that part of their operations

financially separate from other parts of their operations, such as booking services. The

Minister may set further rules concerning bookkeeping and financial separation between

services receiving public funding and other operations.

 

Article 13

The notice sent to Icelandic Tourist Board concerning operations requiring registration

shall include the following information, as appropriate:

a. Name of the operation, national identification number, address,

telephone number, and e-mail address.

b. Name and national identification number of the person responsible for

the operation.

c. Operational form.

d. Detailed description of business activities.

e. Whether the operation receives public funding; and if so, what funding.

f. Opening hours of business establishment.

The Icelandic Tourist Board is authorised to remove a registered entity from the register

if the registered operation has ceased or if the operation has expanded so that it falls

under the definition of a tour operator or travel agency. The Icelandic Tourist Board shall

render a ruling if a disagreement arises concerning the category to which an operation

belongs.

 

SECTION V

 

Security requirement for package tours

Article 14

For the purposes of this Act, operations requiring security shall refer to the sale of

package tours.

A travel agency shall provide security for the reimbursement of money that a customer

has paid for a package tour that has not yet taken place, and for the customer's

transportation home from a package tour, whether within Iceland or abroad, in the event

of bankruptcy or the cessation of the travel agency's operations. The security shall also

be sufficient to allow the customer to complete a package tour in accordance with the

original itinerary of that tour.

The security described in Article 2 may take the following forms:

a. Money deposited in a recognised bank or savings bank in the name of

the Icelandic Tourist Board; cf. Article 17.

b. A surety issued by a commercial bank or savings bank, or accident

insurance granted by an insurance company. These parties shall hold

licences to operate in the European Economic Area. They shall also

provide a statement to the effect that the scope and amount of the security

are in compliance with this Act.

c. Other security deemed comparable by the Icelandic Tourist Board. A

statement shall be presented to the effect that the scope and amount of the

security are in compliance with this Act.

 

Article 15

The security provided pursuant to Article 14 shall remain in effect as long as the licence

to operate the travel agency is valid. The security shall remain available for up to six

months following the loss of an operating licence pursuant to Article 21, or following the

cessation of operations.

 

Article 16

Those customers of a travel agency who have commenced a package tour shall be

enabled to complete their tour. This means that everything for which the customer has

already paid, and which is in accordance with the pre-arranged package tour, whether this

consists of transport, accommodation, or other pre-paid parts of the tour, shall be paid out

of the security funds so that the customer is able to complete his tour. It shall not be

obligatory, however, to pay for items that the customer purchases additionally; i.e., parts

of the tour that do not constitute a portion of the pre-arranged package tour.

A customer who has made partial payment to a travel agency for a package tour shall

receive a reimbursement of the amount he has paid, whether a final agreement has been

negotiated concerning the package tour or not, if he can present satisfactory proof of

payment.

Those who have paid for package tours, in part or in full, but have not begun their tours

shall be reimbursed the money they have paid.

If security funds have been used to enable a customer to complete a package tour in

accordance with the original agreement, no further claims will be addressed.

In the event of the transport of passengers back to Iceland through the involvement of the

Icelandic Tourist Board, because of bankruptcy or cessation of a travel agency's

operations, before a package tour is completed, reimbursement shall be made only for

that portion of the package tour that the passenger was not able to complete.

Only direct financial loss resulting from a package tour shall be compensated by the

travel agency's security funds; no compensation shall be paid for loss that may be traced

to possible inconvenience or non-pecuniary damage.

 

Article 17

The amount of the security pursuant to Article 14 shall be determined from among the

following items; the item yielding the highest security amount shall be used as the basis

for the calculation:

a. 60% of the turnover for the two consecutive months with the highest sales;

b. 35% of the turnover for the four consecutive months with the highest sales; or

c. 15% of total annual turnover.

The security amount shall not, however, be less than ISK 1 million.

The Minister of Industry shall set rules concerning

the bookkeeping and accounting of travel agencies in order to separate the sale of

package tours from other activities and to ensure that the information necessary to assess

the security amount is available.

The Icelandic Tourist Board may demand higher security amounts in cases involving

particularly hazardous operations or if other factors make it clear that the security

stipulated in this Act will not be sufficient in the event of bankruptcy or cessation of

operations of the travel agency.

 

Article 18

To make it possible to assess the security amount, an applicant for a licence to operate a

travel agency shall submit a detailed plan covering operations, flow of payments, and

financial position for the current and the following year. The plan shall be segregated by

months, and the estimated turnover for operations requiring security shall be specified

separately. The plan shall be accompanied by an auditor's endorsement stating that it is

correct given the premises provided.

The Icelandic Tourist Board shall assess the premises of the plan and is authorised to

request contracts and other data that it considers necessary in order to assess the plan. The

Icelandic Tourist Board shall assess the amount of the security on the basis of the data

submitted but shall first request a statement from a chartered accountant.

Before 30 April each year, travel agencies shall send their audited annual accounts and

other data required according to the rules specified in Article 17, Paragraph 2, including a

schedule of activities planned for the operational year, to the Icelandic Tourist Board. On

the basis of this information, and upon receipt of the opinion of a chartered accountant,

the Icelandic Tourist Board shall determine whether the security amount shall be

changed.

The Icelandic Tourist Board is authorised to charge travel agencies fees that are to be

paid to the Board in order to cover the costs of monitoring pursuant to this Act. The

amount of the fees shall be published in the rules that the Minister of Industry sets pursuant to Article 17, Paragraph 2, upon receiving the

recommendations of the Icelandic Tourist Board. The fees shall cover the cost of

investigations of bookkeeping and other matters as necessary to verify the amount of

security at any given time.

 

Article 19

In the event of bankruptcy or a cessation of operations on the part of a travel agency, the

Icelandic Tourist Board shall have a call to present claims published in the Official

Gazette. The call shall instruct customers to submit written declarations of claims for

payment from the security amount within 60 days of the publication of the call to present

claims. Claim declarations shall be accompanied by the evidence necessary to prove the

existence of a claim, such as travel tickets and receipts. The Icelandic Tourist Board

determines what data provide sufficient proof of the existence of a claim. The decisions

of the Icelandic Tourist Board may be appealed to the Ministry.

 

Article 20

 

The Icelandic Tourist Board is authorised to appoint an administrator to oversee the

disposal of the security amount. The administrator shall handle the arrangements

necessary to return passengers home and shall reimburse them from the travel agency's

security funds. Expenses incurred in connection with the administrator's work shall be

paid from the security funds.

SECTION VI

 

Loss of licence

Article 21

The licence to function as a tour operator or to operate a travel agency shall be revoked if

the licensee or the party responsible for the licensee's operations becomes insolvent or is

deprived of financial autonomy. The licence shall also be revoked if the security that the

travel agency is required to submit pursuant to Section V is cancelled or does not meet

the requirements set forth in the provisions of this Act.

The Icelandic Tourist Board may revoke a licence to function as a tour operator or to

operate a travel agency if the licensee or the party responsible for his operations no

longer meets the requirements set forth in Article 9. The licence may also be revoked if

the licensee or the party responsible for his operations is found to have misused the

licence or the logo of the Icelandic Tourist Board, or violates the provisions of this Act in

another manner.

The Icelandic Tourist Board is also authorised to revoke a licence if a travel agency does

not meet the requirements set forth in Article 18 concerning the submittal of annual

accounts and other data that are necessary for the assessment of the security amount

pursuant to Article 14. In addition, the Icelandic Tourist Board may revoke a licence if a

travel agency does not comply with the Board's decision to increase the security amount

within one month following the announcement of that increase.

 

Article 22

Before a licence is revoked pursuant to Article 21, Paragraphs 2 and 3, the Icelandic

Tourist Board shall send a warning of the purposed revocation, including the reason for

the revocation, and the licensee shall have a period of at least 14 days to correct

deficiencies.

In the event that a licence is revoked pursuant to Article 21, Paragraphs 2 and 3, the

Icelandic Tourist Board shall send a written notice to this effect. The notice shall state the

effective date of the revocation.

A tour operator or travel agency whose licence is revoked shall return his licence to the

Icelandic Tourist Board immediately upon receipt of the notice specified in Paragraph 2.

The Icelandic Tourist Board shall advertise the revocation of the licence in a reliable

manner, both on its Internet website and in the Official Gazette. The Icelandic Tourist

Board may also advertise the revocation of the licence in another manner, as appropriate

at any given time.

The revocation of a travel agency licence pursuant to Article 21, Paragraphs 2 and 3,

shall be considered as the equivalent of a cessation of operations, and the provisions of

Section V shall apply with respect to those operations for which security is required.

 

SECTION VII

 

Miscellaneous provisions

Article 23

The Minister is authorised to issue regulations on tourism administration pursuant to this

Act.

 

Article 24

All services rendered electronically by travel agencies shall comply with the Act on

Electronic Commerce and Other Electronic Services, no. 30/2002.

 

Article 25

Administrative decisions made by the Icelandic Tourist Board, such as the refusal to issue

licences to tour operators or travel agencies, a decision to revoke a licence, or a decision

concerning the category to which services belong pursuant to this Act, may be appealed

to the Ministry. Case handling shall be carried out in accordance with the provisions of

the Administrative Procedures Act, no. 37/1993.

 

Article 26

The operation of activities for which licensing or registration is required pursuant to this

Act, without the necessary licence or registration, shall be punishable by fines unless

other legislation provides for more stringent sanctions.

Violations of this Act shall be handled in accordance with the provisions of the Code of

Criminal Procedure.

In the event of the operation, without the necessary licence or registration, of activities

for which licensing or registration is required pursuant to this Act, it is possible to seek a

court order demanding the suspension of operations, including the closing of the business

establishment or Internet website.

 

Article 27

The Icelandic Tourist Board shall charge fees for licence issuance and registration of

operations in accordance with a schedule of fees approved by the Minister. The fees

charged shall be based on the expense incurred in providing the service.

 

Article 28

The Minister is authorised to decide, upon receiving comments from the Icelandic Tourist

Board, that a reasonable fee shall be paid for services that are rendered at a tourist

locations if the monies so collected, less the cost of collection, are used solely to protect,

beautify, and tidy the location, and to improve tourist reception facilities.

These provisions shall not, however, apply to national parks or other areas operated by

the Environment and Food Agency unless the Agency gives its approval.

 

SECTION VIII

Entry into force

Article 29

This Act shall enter into force on 1 January 2006.

This Act repeals the prior Tourism Administration Act, no. 117/1994.

Interim Provisions

Upon the entry into force of this Act, the Icelandic Tourist Board shall assume all of the

civil rights and obligations of the office of the previous Icelandic Tourist Board,

including the status as a party to rental agreements and collaboration agreements, both

domestic and foreign. The assets of the previous Icelandic Tourist Board shall revert to

the Icelandic Tourist Board. The employment agreements made by the office of the

previous Icelandic Tourist Board with its employees shall continue to be valid with

respect to the Icelandic Tourist Board. The appointment of the current Director of the

Icelandic Tourist Board shall also retain its validity for the full term of the appointment.

Licensees who are in possession of issued and valid licences to operate a travel agency at

the time this Act enters into force shall return their licences to the Icelandic Tourist Board

and apply for new licences within six months following the entry into force of this Act.

All licences to operate a travel agency that were issued prior to the entry into force of this

Act shall expire six months after the Act enters into force.

Passed by Althingi on 11 May 2005.


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Disclaimer: This section of the site details available translations on legislation relating to the Government Offices in Iceland. In case of any discrepancies between the translations and the original text in Icelandic, the original text as published in the Icelandic Legal Gazette prevails.

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