Hoppa yfir valmynd
Prime Minister's Office

Iceland and the Information Society 2003

Report - Cover
IT 2003_ Cover


Iceland is Europe's second largest island and one of its least densely populated countries, having only 2.8 inhabitants per square kilometre. The population of Iceland is about 288,000, of which around 62 percent live in the capital city, Reykjavik, and its neighbouring municipalities.

The standard of living in Iceland is among the highest in the world. The economy, which centred round fisheries and agriculture at the beginning of the twentieth century, has diversified into the manufacturing and service sectors in recent decades. The modernisation of the economy continues and it is now being transformed into a multi-faceted digital environment, in which, according to an Internet survey conducted in October 2002, about 81% of the populace have access to computers with Internet connections. Sophisticated telecommunications facilities, operating through fibre-optic cables, offer reliable direct international links for telephone, fax and data networks.

Information technology already has an enormous impact on industry and everyday life in Iceland. Over and above the way it affects other nations, IT has in a sense broken the barriers of Iceland’;s isolation. After all, Iceland is an island in the mid-Atlantic, which inevitably made it more difficult for residents to communicate and carry on business with the rest of the world.

General Internet use has given ordinary people and companies a completely new way to seek information, maintain contact or complete business with the citizens of other nations.

Today it is important to nurture the innovative industries in which Iceland is clearly a pioneer, such as IT, biotechnology and tourism. The IT sector seems to be especially suited to Iceland and is providing many new opportunities.

Iceland’;s cultural traditions and heritage are based on information, both in its literature and history. Information and telecommunications technology, therefore, not only offer novel possibilities for the future development of Icelandic society, but also provide a perfect medium for cultivating the presentation and understanding of cultural values that the nation has fostered in past centuries.

Iceland has performed well in its development of the Information Society. The country's software and information industry is growing, and conditions for this industry are favourable. Moreover, Icelandic authorities are committed to applying modern technology to raise the quality of life in Iceland, to make government more accessible to the people and to enable interaction between government and the general public.

1.1 Statistical facts

Iceland now ranks among the world leaders in general IT use, both in terms of public access to the Internet and computer ownership. Iceland is actually a relatively small community, so that it has quite direct channels of communication between the government and the public. The level of education is high and - for whatever reason - the general public is very open and positive towards technological innovation.

Telephones and telecommunications

2002 - Access channels in the fixed telephone network and digital subscriber lines



per 1000 inh.


Standard lines (PSTN)




ISDN basic (2B+D)




ISDN primary (30B+D)




xDSL subscriber connections*




*(Digital subscriber connections, e.g. ADSL etc.)

2002 - Cellular telephone networks

NMT 450 subscriptions


per 1000 inh.


GSM 900/DCS 1800 subscriptions:


per 1000 inh.


Fixed subscriptions




Pre-paid phone cards




Computers and the Internet

2002 83.2% of all households have PCs; of these 92.0% have Internet connections.
2002 77.9% of Iceland's households (as deduced from the above) have access to the Internet.
2003 Internet hosts registered under the top level domain .is have reached 68,282 and the hosts per 1,000 inhabitants 236.9.
2003 Domains registered under the top level domain .is number 8,294 and the domains per 1,000 inhabitants 28.8.

Icelandic companies - information technology and electronic commerce

2002 98% of Icelandic companies use computers for their operations.
2002 92% have an Internet connection; of these about 65% have ADSL or another high-speed connection.
2002 64% have created their own website. About 13% of the companies who did not have a website when the survey was carried out were planning to set one up during the year. Of the companies who already have their own websites, 58% supply information in other languages.
2001 By the end of the year, 44% of the companies have ordered goods or services using order forms on the websites of other companies.
2001 By the end of the year, 24% have received orders through forms on their home pages.45% of these were transport and communications companies, making them the most progressive in this area.
2002 The proportion of employees who use a computer in their work is 32% among industrial companies and 84% at service firms.

1.2 Government policy

In the Government’;s policy declaration of 23 April 1995, government political objectives on utilising information technology to improve public administration and stimulate the economy were set forth for the first time in Iceland.

In October 1996 the Government of Iceland published a paper entitled The Icelandic Government´s Vision of the Information Society, which presented the government strategy regarding issues of the information society.

This strategy paid particular attention to the need to capitalise on two qualities deeply rooted in the Icelandic national character. On the one hand, the nation is strongly motivated towards progress and is open to innovation. On the other hand, Icelanders genuinely believe in their cultural uniqueness.

Principal objectives in the Government strategy, 1996:

The chief goal of the Government was to ensure that Iceland should stay at the forefront of the world’;s nations in utilising information technology to enhance the quality of life and increase prosperity. To support this chief goal, five main objectives were set forth as a foundation for the nation's future vision:

1. Icelanders shall have convenient access to the information society. Its advantages should be utilised to strengthen democracy and increase the quality of life for the benefit of the public and the nation's economy. Information technology should be employed in all fields, whether for innovation, public health, science, the arts or other areas of daily life.

2. Complete equality shall be ensured between the public and private sectors in the fields of information technology and the information industry. The Government, with the help of information technology, should facilitate access to governmental information and services, so as to ensure an equal footing for individuals and companies irrespective of their residence and economic resources.

3. Information and telecommunications technologies shall be mobilised to improve the competitiveness of the Icelandic economy and to increase productivity and the possibilities of exporting Icelandic know-how.

4. The educational system shall adapt to changing social dynamics, with general education and continuing education focussing on the advantages of the information society, while at the same safeguarding Icelandic language and culture.

5. Legislation, rules and procedures shall be reviewed concerning information technology in order to stimulate technological progress and protect the rights of individuals and companies.

In April 2000, a new workplan was introduced for e-commerce and e-government, emphasising experimental projects, increased services at the website of the government ministries, and revision of legislation. Also covered were the use of IT in the education system, wireless networks in schools, and laptops for secondary school students.

The first chapter in the history of Iceland's Information Society

policy is now complete, and a new chapter is just beginning. In the summer of 2003 the government decided to launch a fresh project to formulate policy on the Information Society.

This new policy is expected to be announced at the beginning of 2004.

1.2.1 Information Society Taskforce

Following publication of the 1996 strategy, a channel was created for its implementation. In May 1997 the Government decided to set up a development project for the information society in Iceland. The project was expected to last for five years, i.e. from September 1997 to September 2002. A steering group, the Information Society Taskforce, subsequently operated under the auspices of the Office of the Prime Minister and steered the Information Society Project.

The main task of the Information Society Taskforce was to promote the implementation of this government strategy.

Now concluded under the leadership of the Prime Minister’;s Office, this major five-year development project has had its success evaluated by an external consultant, IBM Business Consulting Services. The conclusions were that the project had succeeded admirably in achieving the objectives that had been set, and that the funding allocated to IT projects had been used to good advantage and had had a substantial impact on their accomplishments.

In recent international surveys on electronic facilities and Internet use, Iceland is ranked as one of the leaders. The introduction of information and communications technology (ICT) into the various branches of society therefore appears to have proceeded with a fair degree of success in recent years.

1.2.2 Educational and cultural affairs

An educational initiative was one of the projects given priority in the Government's 1996 strategy. The Policy of the Ministry of Education, Science and Culture on Information Affairs, 1996-1999, outlined how the Ministry, together with schools, cultural institutions, and other institutions under its administration, would need to exploit the rapid advances of the previous years in order to improve services and increase efficiency. The policy highlighted thirty key areas concerning the use of information technology that were of primary importance for the education system and cultural life. Included in these areas were teacher training, producing educational materials using multimedia technology, establishing ICT pilot schools, turning libraries into public information centres, and establishing a single cultural information network that would connect all cultural institutions. While it was important for Icelanders to keep up with current international cultural developments, it was considered no less important for them to present their own culture internationally. In this evolving environment increased attention would have to be paid to safeguarding the unique characteristics of Icelandic language and culture.

A follow-up to this policy was published in 2001 and strongly emphasised distance education.

1.2.3 Health care

In accordance with policies established in 1996 by the Icelandic government with regard to the information society, the Ministry of Health and Social Welfare formulated its aims relating to information issues within the health care system. Since the beginning of 1998 special emphasis has been placed on developing a network for health care and on electronic patient records, telemedicine, and a health website for the public.


The following overview of achievements or milestones reached en route to the information society deals above all with the public sector. During its appointed term, the Information Society Task Force initiated and supported a number of activities, although the contribution of various state institutions and legislators to the information society has also been extensive and has a long history.

As an independent nation with complete administrative, educational and health systems, as well as responsibilities in foreign trade and diplomacy, Iceland sustains a relatively heavy overhead. For comparison, Icelanders number only about one-fifteenth of the populace in the two relatively small neighbouring countries of Ireland and Norway.

One of the key factors contributing to efficiency both in government and business is the existence of a reliable central national register of individuals and companies. The register features a unique identification number for each individual (a CPR number). CPR numbers are used for identifying individuals in governmental systems, as well as in banks and other businesses; therefore, these unique numbers serve as an extremely important tool for reliable identification within Icelandic IT systems. Although the widespread use of CPR numbers has been criticised, the consensus seems to be that the advantages outweigh the risks.

It would appear to be worthwhile for a small structure like the Icelandic public sector to integrate its computer systems insofar as possible. In all likelihood this would probably improve cost effectiveness and efficiency. While this by no means occurs spontaneously, in some areas the national administration has been quite successful in implementing common solutions that improve efficiency as well as making it easier for the general public to deal with the administration. Here are some examples.

2.1 www.government.is

All the ministries provide information and services via the government ministry website, which plays an increasing role in relations between the government and the public, companies and institutions. The main emphasis is on two areas: that the website is structured in a user-friendly way and that it becomes increasingly interactive. The aim is that the website, and others of a similar kind, will significantly improve the services of public bodies.

Various measures have been undertaken to increase the availability of public sector information on the Internet. All laws, regulations, most court decisions, and a vast amount of information concerning the government and its institutions are now available through this portal.

The government ministry website serves a broad group of users and is designed with this in mind. It is important to ensure clear and simple structure of materials. Serving the needs of those with disabilities e.g. the blind or partially sighted, the deaf, physically or mentally handicapped, and other groups, is of particular importance, and the website is designed in such a fashion that these groups can utilise its materials without difficulty. Use has been made of guidelines from the World Wide Web Consortium, http://www.w3.org/WAI/.

2.2 Document management system

Starting in 1994, in association with GoPro Iceland, a domestic software company, three government offices jointly developed a document handling system based on a widely marketed groupware package. Soon every other ministry joined in, the last one in 1998, and joint goals were determined for the design. The system has also been installed in every embassy except one. This is extremely important to ensure a good flow of information and communication between these bodies. The system has now become indispensable in all ministries and embassies, both as a management tool and also towards fulfilling government obligations stemming from the Information Act of 1996.

The system keeps track of all ministry documents. Letters received by the ministries are scanned into the system and replies to requests are recorded there. The system contains emails, faxes, memoranda, news releases, speeches and reports.

To take one example, meetings can now be arranged via the system, since it checks the diaries of each ministry employee. An overview of the projects within a ministry can be maintained, for instance the number of unfinished projects and the length of time it takes to complete projects can now be viewed. The system also controls the flow of assignments so that instructions can be issued, responsibilities defined, and tasks transferred between employees. Finally, all documents relating to a specific matter can be found very quickly.

It should also be pointed out that the document management system, along with the Office system, has sufficient scope for the majority of tasks to be completed on computers. This means that the ministries can refine the number of systems in use to a minimum, making the operation of the computer systems easier and saving time and money.

2.3 Financial and human resource system

The Icelandic state administration is embarking on the renewal of its main software systems. This may involve the most extensive and integrated modification ever undertaken by an entire government, involving 19,000 employees in around 300 institutions. Based on a well known, web-supported, e-business software suite, the innovation is intended to be the foundation for implementing both e-government and employee and citizen relationship management in Iceland. The new systems will replace those dating back as far as 1978 and herald wide-ranging structural changes to national administration.

2.4 PKI

In order to strengthen the security of planned and existing e-government activities, a public key infrastructure is being developed. Based on European and further international standards, the intention is for government PKI to be developed by means of a set of certificates which fit requirements defined by the administration.

2.5 Electronic tax returns

Business have been allowed to submit electronic tax returns since 1997, and individuals since 1999. In 2003 113,485 individuals submitted their tax returns in an electronic format. Professional parties submitted a total of 67,735 electronic tax returns, which it is safe to assume were for both individuals and companies. This comprises some 80% of all the tax returns submitted before tax assessment commenced. This system benefits the citizen because it is user-friendly and offers on-line guidance, certain data is pre-entered, totals are calculated automatically, and rule-based auditing is in place. During the declaration period this system is available around the clock. Work on returns can be completed over several sessions since intermediate results are saved until everything is ready for submission. Once the citizen has submitted the information to the tax authorities, an electronic processing system takes over. About half of all tax statements are inspected solely by machine, without any involvement of the human eye.

The benefits for the tax authorities are faster and easier filing, higher data quality, reduced costs, and the possibility of using artificial intelligence for auditing, which makes it possible to approve half of the electronic returns with no manual intervention.

2.6 Electronic processing of customs forms (EDI)

The Customs Act, adopted in 1987, made provision for the electronic submission of customs declarations and the acceptance of clearance notices using EDI and X.400 protocols. An amendment to the Act in 1996 made it compulsory for all businesses to begin electronic submission by 2001. Although as many as 70% of customs declarations were submitted electronically in 1999, it was felt that to reach the remaining, generally small businesses, it would be necessary to offer a Web-based solution using digital certificates for authentication.

In this case, the only investment for the user is in a computer with access to the Internet, a web browser, and a digital signature certificate, which is provided by the customs authorities. Not only is this service open round the clock, but it also rationalises the task of users when preparing and submitting customs declarations, significantly shortens turnaround time, and is more reliable, because declarations are automatically checked for errors.

In accordance with the amendment to the customs act, all import and export companies were making electronic submissions by the close of 2001. In addition, internal processes at customs have become fully automated, so that the demand for goods to flow rapidly in international trade is now easier to meet.

2.7 Fisheries system

This system receives daily information via a computer network from all ports of landing in Iceland, on the catches brought in by each fishing vessel. Data on fishing quotas and the transfer of quotas is also entered into the system, which is operated under auspices of the Directorate of Fisheries. The purpose is to assist in managing the following tasks, which are among the directorate’;s duties: the allocation of catch quotas, supervision of quota transfers, collection of catch data, and monitoring of the quota status on individual vessels. The current status in each category is accessible at any time on the Web. For increased security, skippers are now being equipped with digital certificates for signing and encrypting catch reports.

Due to the importance of fisheries and fish processing in the country’;s economy, this system plays a key role.

2.8 Educational Gateway

The Educational Gateway is a portal that provides schools with convenient access to information and services on the Internet. The services of the Educational Gateway lie in five main areas:

– dissemination of content

– studies and teaching

– innovation

– communication and learning communities

– an e-marketplace

Content is currently being recorded and is being linked to courses, academic subjects and curriculum goals. During the autumn of 2003, a database of curricula is being prepared that will facilitate preparing school curricula as well as curricula aimed at individuals.

The Educational Gateway is built on a public-private partnership. It is run by a private company and intends to integrate the content and services provided by public and private parties.

The service appears via a Web interface based on a database. The database contains recorded metadata that is easy to search. Finally, the services of various providers are intended to be integrated through one interface:


2.9 FS Net

FS Net is a high-speed network linking all upper secondary schools and lifelong education centres in Iceland.

FS Net was developed following a tender held by the Ministry of Education, Science and Culture in June 2002 for a high-speed network to serve data transport. The objective was to connect educational organisations to a modern information highway. This system was to be used for innovations in schooling as well as distance education. The Ministry of Education, Science and Culture is the proprietor of the network.

FS Net is structured for fast, independent data transport and builds on the IP protocol. All upper secondary schools and continuing education centres are connected to the network through a 100-Mbps link; in addition, branch locations of continuing education centres connect to the network by 2-Mbps links. Today, 63 institutions are connected to the network: 29 upper secondary schools, 9 lifelong education centres, and 25 of their branches.

The network supports multicast and traffic prioritisation using Quality of Service (QoS) to support the seamless transport of multimedia material. A connection with the University and Research Network (RH Net) enhances the possibilities of FS Net, seen at:


2.10 LangTec

For over 1,000 years, Icelandic has served not only as the language of Icelanders, but as the medium by which one of Europe’;s greatest literary treasures was preserved: the medieval sagas. However, since the advent of computers Icelandic, like many other languages, has found itself under increasing pressure, particularly from English.

The LangTec project is commissioned by the Ministry of Education, Science, and Culture, and is intended to ensure that Icelandic remains a living language throughout the information drive of the 21st century. LangTec will support the creation of databases and the tools necessary for integrating Icelandic with computer-based technology in its multitude of shapes and forms.

Managed by a ministry-appointed steering committee and financed through a dedicated fund, the LangTec project is intended to create the conditions for Icelandic to be a medium for dealing with computer-based technology.

The steering committee will supervise the creation of publicly accessible databases of spoken and written Icelandic for developing language technology tools. The committee will also provide support for commercial companies interested in developing technology for this field and at the same time will work closely with companies, institutions and individuals on fostering an environment for the growth of language technology as a self-supporting industry in Iceland.

Language technology deals with the application of language in computers and communication technology. Aspects included are speech recognition and speech synthesis, language correction tools, machine translation, and natural language interfaces. Confer the following website:


2.11 Icelandic Library Consortium

The Icelandic Library Consortium, Inc., is owned by the Icelandic government and a chain of municipalities around the country. It was incorporated on 14 November 2001 with the purpose of running a central, web-based library system for the majority of Iceland's libraries.

The vision of the consortium can be described as follows:

– to make the best possible use of Iceland's modest library and information resources

– to provide all users of Icelandic libraries with equal access to these resources over the Internet

– to institute a single, centrally run library system as the most cost-effective solution.

After the project had clarified its goals and means in 1999, the system opened for operation in 15 out of a potential 400 libraries on 19 May 2003. Expectations are that approximately 70 public libraries will have joined the system by the end of 2003 and that it will be fully implemented by the close of 2004.

According to plans, the new library

system will be utilised by all or almost all the libraries in Iceland, approximately 400, and their existing data will be added to the new system in stages, depending on their existing systems. For more information, see:



2.12 hvar?is

All Icelanders have access to an immense number of electronic journals and databases through hvar?is, a system supervised by the National and University Library of Iceland (NULI) on behalf of the Ministry of Education, Science and Culture. This national access is financed through direct funding from the state budget along with contributions from libraries across the country, institutions and companies. Currently hvar?is provides national access to 31 databases, nearly 8,000 full-text journals, 350,000 electronic versions of works in British and American literature, three encyclopaedias and one dictionary.

Contracts have been signed with the providers of electronic databases and journals, permitting access for every resident of Iceland who is connected to a domestic Internet service provider. Access can therefore be gained from schools or companies, from home, or from a laptop, whether from out at sea or from the isolation of the Icelandic highlands, based on the IP address. Currently, there are 18 ranges of addresses at eight Internet Service Providers.

On the website, users can find out which databases and e-journals are nationally accessible. According to statistics based on visits to the website and user reports received from the databases and e-journals, this access is frequently used, mainly by universities and colleges and by research institutes. Distance students rely on this nationwide access, which has also provided the patrons of public libraries with quality information via the Internet and young people in secondary schools with their first experience in using databases with the help of their school librarian. Foreigners and immigrants in Iceland can click directly on to sources of information, without having to negotiate the potential hurdle of communicating with an Icelandic-speaking librarian.

Through this access, NULI feels that libraries are literally being brought into workplaces, schools and homes, and being kept open 24 hours a day, seven days a week. Such nationwide access revolutionises the possibilities for handicapped and disabled people to improve their skills and the quality of their lives, besides giving equal opportunities to people irrespective of whether they live in towns and cities or in the countryside.

The idea of providing nationwide access to databases of electronic bibliographies and full-text journals unites two lines of thought. One is the urgent demand of libraries and their users for a diverse set of databases and journals and the other is the adopted government policy of equal access for all Icelanders to the information society, implemented through:


2.13 Open Culture

In 2002 the Ministry of Education, Science and Culture initiated a project, Opin menning (Open Culture), with the intention of providing a single, web-based public access point to the knowledge stored at heritage institutions. The aim was to make information, which had previously been confined to various institutions within the museum sector and inaccessible to the public, readily available to scholars, teachers, pupils, and the general public.

Information held at museums and other heritage institutions is to be integrated into a single database with a simple interface enabling the public to search on the Internet for information about museum contents and digital resources such as documents, images and recordings, regardless of where the original resources are kept. Through open standards, the database is to make information from diverse institutions interoperable and overcome the problem of exchanging information in a sector where there is, as yet, little agreement on how information technology should be applied.

The project Opin menning is under development, but further information and an experimental search interface can be accessed at the website:


2.14 Internet Forum of the Children’;s Ombudsman

In the winter of 1999-2000 an experimental project was launched under the name of Internet Forum - Youth Forum of the Children’;s Ombudsman. The origins of the Internet forum may be traced to a concept developed by the Children’;s Ombudsman. The aim was to provide representatives of the younger generation with an opportunity to discuss current issues of concern in a democratic manner and to pass their opinions on to their official spokesman, the Ombudsman. In this way the office of the Children’;s Ombudsman could be further strengthened in its advocacy of children and young people before official as well as private parties. The Children’;s Ombudsman felt it was an intriguing option to utilise the potential of the latest information and communication technology, i.e. communication through the Internet including chat lines, mailing lists and websites. The Internet Forum has been conducted twice.

On each occasion, there were 63 representatives in the forum, corresponding exactly to the number of representatives in the Icelandic Parliament. At the Internet Forum of 1999-2000, representatives were aged 12-15; they formed six committees, each of which dealt with issues grouped under a specific heading concerning young people. There were regular Forum sessions on the Internet through a closed chat line, followed by a final meeting in Reykjavík where Forum representatives met face to face in order to review the procedures of the Forum, finalise its proposals, and hand them over to the President of Parliament. For her part, the Children’;s Ombudsman also presented the recommendations of the Forum to the appropriate ministries and institutions.

Since the Internet Forum was regarded as a huge success, the Children’;s Ombudsman decided to conduct another similar event in 2001. This time co-operation was sought from the Association of Secondary School Students as well as from the student organisations within each secondary school. The participants in this Internet Forum were 16 or 17 years of age. Weekly meetings were conducted via Internet chat lines in October 2001, with the majority of the work taking place in committees selected by representatives at the beginning of the Forum. There were five such committees conducting discussions via closed chat lines, as in the previous Forum. Subsequently, the recommendations of the committees were presented, discussed and decided upon at the final meeting of the Internet Forum, which was conducted face to face in Kópavogur Concert Hall. The Minister of Education, Science and Culture came to the final meeting to receive resolutions of the Internet Forum.

Reports containing the conclusions of these two Internet Forums have been published. Since the Children’;s Ombudsman considers it to be of particular importance that young people can be assured that their opinions are listened to - that their views make a difference - the resolutions were carefully reviewed, numerous meetings held to introduce them, and the reports were also sent to all parties concerned. The report on Internet Forum 2001 was also published in English and has been widely distributed, e.g. among Children’;s Ombudsmen in Europe. All these reports can be viewed on the official website of the Icelandic Children’;s Ombudsman: www.barn.is.

2.15 Health Care Network

The Ministry of Health and Social Welfare, in association with ICEPRO, has formed a committee dealing with the subject of e-commerce and compiled a work plan for the development of a Health Care Network in Iceland. The current work plan describes the scope of the Health Care Network, its fields of utilisation, the sponsors, telecommunications, and distance medicine, as well as the relationship between the public and the personnel and institutions of the public health service. Moreover, explanations are given for standards, information systems and databases, security issues, administration and operation, main objectives and finances.

The Health Care Network is intended to be a channel for electronic communications within the health care sector. The Health Care Network is technically equipped with computers, telecommunications equipment and software, as well as rules relating to communications and security. The Health Care Network will be a closed system in the sense that channels of communication must be secure so that information transfers and dispatches between different parties will comply with strict security and rules of procedure.

The communication channels of the Health Care Network are based round the telecommunications and other communication services currently available. Since investing in an independent network with its own telecommunications is not intended, an extensive superstructure is avoided. The cornerstone of communication will be a name server, which registers all institutions that are granted permission by health authorities to connect to the network. The name server will be operated within the health care service, and a security policy and security rules will be the mainstays of the Health Care Network, defining access to the network and the security and reliability of data as well as standards and rules which the Health Care Network adheres to. Each institution connected to the Health Care Network must have a security policy and comply with these security rules, above all encryption and electronic signatures, which should ensure individual protection and confidentiality with regard to patients. The development of the Health Care Network is a long-term project. Initial emphasis will be placed on developing the most significant factors.

2.16 Electronic distribution of hunting licenses

In 2000 the Ministry for the Environment sponsored the creation of a website for the Wildlife Management Institute where hunters could report their catches electronically and apply for new hunting licenses on the Internet. A database was established which collects the hunters’; email addresses and sends them electronic forms for reporting their kill.

The aim of the undertaking is to reduce paper waste and administrative expenses relating to the hunting license system, by sending out bag reporting forms electronically and receiving bag figures electronically through the report website. By increasing electronic reporting, possibilities are also opened for gathering further data on hunting in a simple, inexpensive way.

2.17 Electronic communities

In 2003 the Ministry of Industry and Commerce sponsored a contest among Iceland's municipalities on the establishment of electronic communities. Two proposals were chosen for participation in development projects, which will last for three years. The projects will be carried out, on the one hand, by the municipalities of Árborg, Hveragerði and Ölfus, under the task name "Sunnan 3" (meaning "Southerly, Force 3") and, on the other hand, by the municipalities of Aðaldælahreppur, Húsavík town and fiingeyjar district, under the task name "Virkjum alla" ("Let’;s Activate Everyone").

The competition ensured equality amongst the participants, in an effort to increase motivation. The aim of the contest is to strengthen the position of the information society in rural regions, so that people away from the capital city area can take advantage of the benefits offered by information and telecommunications technology in the best and most economical manner possible. The planned development projects are expected to have an extensive impact on the development of the districts involved. Furthermore, special efforts have been made to design the projects in such a way that they can be utilised by other districts, companies or individuals with comparable results.

2.18 Electronic voting

In spring 2000 the Ministry of Justice and Ecclesiastical Affairs launched a competition on ideas for organising electronic voting. It was made clear that the solutions should cover:

– technological devices at the polling station

– entries in the voters’; register

– voting with or without ballot sheets

– the delivery of election results from polling stations to the supervisory electoral committees

– counting votes at polling stations or at the locations of the supervisory electoral committees

– the processing of election results.

Two companies received grants for developing presentable versions of voting systems, and this development work has now been completed. One of the systems was tested in the so-called airport election organised by the municipality of Reykjavík, and it turned out well. A similar version of that system has also been used at a convention of the Icelandic Federation of Labour; in fact, both systems are designed in such a way that they may be used for various types of elections. Both parties are also interested in developing their systems for export, and it will strengthen their marketing efforts overseas if they have proven experience gained from operating the systems in Iceland.

What characterises both systems is that they perform two totally individual functions. On the one hand, the system monitors who has voted, so this can be compared with the voters’; register, which may be centrally located for single municipalities or for the entire country. The voting itself and the processing of election results are entirely separate from this function, ensuring that there is no way of tracing how each individual has voted. Computerised telecommunications etc. are then linked to this. In both systems it is assumed that elections will take place at polling stations, as is currently practiced, and that current arrangements for absentee voting will not be interfered with for the time being. Therefore absentee votes would have to be counted manually and specially entered into the computer system.

2.19 Legislative amendments

The Icelandic Government has placed emphasis on eliminating legal hindrances to electronic commerce, while maintaining strong consumer protection as well as the protection of individuals in regard to the processing of personal data. To this end the Government has for instance presented a bill to Parliament on electronic signatures. Based on a similar EC Directive, the bill was passed in the spring of 2001, as Act No. 28/2001. Article 4 of the Act stipulates that fully qualified electronic signatures shall have the same force as handwritten signatures. Furthermore, it is stipulated that other electronic signatures can be legally binding.

The Act on the Protection of Individuals with Regard to the Processing of Personal Data, which implemented the EC Data Protection Directive, was passed in 2000 (Act No. 77/2000). It dealt with how the protective principle relates to data quality and presented criteria for the legitimacy of data processing.

In 2002 Parliament passed an Act relating to e-commerce and other electronic services (30/2002).

On 10 March 2003 an amendment was approved to the Public Administration Act, No. 37/1993, adding a special chapter on the electronic handling of matters by public administration. Through this modification, general obstacles to the development of electronic administration were removed. While formulating the amendment, the committee in question was guided by the concept of equivalent value, and also emphasised the maintenance of technical impartiality. In addition, the alteration involved mere permission for the electronic handling of governmental administration cases, rather than an obligation.

Dating back to 1999 (Act No. 107/1999), the Act on Telecommunications deregulated the telecommunications sector by terminating the state monopoly. A further aim of the act was to enhance competition and ensure that everyone had access to the basic services in this field. The legislation also provided for the unbundling of local loops under certain conditions. The Icelandic telecommunications laws, which are in force, implement the relevant EC directives, since the new telecommunications act of 2003 introduces all the latest EU directives in Iceland.

No special act on cyber crimes is in effect for Iceland. However, general principles of criminal law apply, including a prohibition on possessing child pornography.

In the field of taxation, there are two main acts applying to electronic commerce: the Income Tax Act, No. 90/2003, and the Value Added Tax Act, No. 50/1988. According to the Income Tax Act, a legal entity is taxable in Iceland if it is domiciled in this country. In Chapter XI of the Value Added Tax Act, No. 50/1988, several special provisions concern imports. A value added tax shall be collected on all imports at the time of customs clearance. Special provisions apply to goods exempt from customs duties, such as works of art, scientific publications and small packages.

One major piece of legislation deals with the field of copyrights in Iceland, Copyright Act No. 73/1972. As Iceland is a member of the European Economic Area, it has implemented the entire range of EC directives in this area. Moreover, Iceland will implement the newly adopted Directive on Copyright in the Information Society.

The Act on Trademarks, No. 45/1997, applies to matters of trademarks. Although there is no special act on domain names or cybersquatting, general principles regarding trademarks have been applied in the few court cases that have arisen on domain names.


Iceland now ranks among world leaders in general IT use, in terms of both public access to the Internet and also computer ownership. The Icelandic society is a small one, offering simple channels of communication between the government and the public. With a high level of education, the general public is very open and positive towards technological innovation.

The IT industry could take advantage of this situation and consider Iceland as being the ideal place to develop and test various innovations before launching them on a global market. The advantages of undertaking pilot IT launches in Iceland are clear; hopefully, this characteristic will serve to attract such projects.

Published by the Prime Minister´s Office, Iceland 2003

Editor: Guðbjörg Sigurðardóttir

Design and layout: Kristín Ragna Gunnarsdóttir


Page 3 - Morgunblaðið/Rax

Page 7 - Morgunblaðið/Alfons

Page 11 - Morgunblaðið/Golli

Page 15 - Morgunblaðið/Halldór Kolbeins

Printing: Svansprent

Circulation: 1,000 copies

Internet address:


ISBN 9979-9550-6-6

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