Poor Cyber Security in Iceland Leaves Infrastructure at Risk

Áslaug Arna Sigurbjörnsdóttir Icelandic minister

Iceland is lagging when it comes to knowledge and education on cyber security, which could put the country at risk of cyber attacks, RÚV reports. Minister of Universities, Innovation, and Industry Áslaug Arna Sigurbjörnsdóttir says a new university program focusing on cyber security will be established in the coming year or so. Suspicious traffic within Iceland’s network jurisdiction has increased sixfold since the Russian invasion of Ukraine began in February 2022.

 “We are quite far down in cyber security when compared to other countries, and are maybe among countries that we generally don’t want to compare ourselves to,” Áslaug Arna stated. The lack of security could make Iceland’s infrastructure a target for cyber-attacks, including its energy system or its healthcare system.

 Alþingi, Iceland’s parliament, passed amendments to its national security policy two weeks ago. Apart from military threats and cyber security, the policy covers societal threats such as financial security, epidemics, climate change, and natural disasters.

Controversial Telecommunications Company Sale Up in the Air

fibreoptic cable infrastructure

French company Ardian is not prepared to finalise its purchase of Icelandic telecommunications company Míla unless the purchase agreement is amended, RÚV reports. Iceland’s Competition Authority set several conditions for the purchase following a meeting with Ardian representatives last week, informing the company that the purchase would not be approved unless those conditions were met. Ardian’s spokespeople say that one of the conditions contradicts the terms of the purchase agreement.

Key infrastructure valued at ISK 78 billion

Míla, which owns and operates nationwide telecommunications systems in Iceland, was sold to Ardian last year. All of Iceland’s homes, businesses, and institutions are serviced by Míla’s telecommunications infrastructure, which includes copper wire, fibreoptic, and microwave systems. The purchase agreement from last October was evaluated at ISK 78 billion [$570 million; €562 million].

Various parties in Iceland have expressed concern regarding the sale of such important infrastructure to a foreign company. Iceland’s government imposed certain conditions on the sale as well as amending legislation in an effort to ensure national security would not be compromised by Ardian’s ownership of Míla. Ardian

Further negotiations likely

A notice from Síminn to Nasdaq Iceland stated that the Competition Authority’s conditions were burdensome and negatively impacted the purchase agreement for Ardian. The notice stated that further negotiations were required between Síminn and Ardian, as well as between Ardian and the Competition Authority. Ardian is a fund management company and its representatives have stated that the purchase of Míla is a long-term investment.

Ardian representatives have not specified the details of the dispute.

Iceland to Increase Defence Spending, PM Announces

PM Katrín Jakobsdóttir attended a NATO meeting in Brussels yesterday. Speaking to RÚV after the meeting, the PM stated that the government would be increasing its defence budget, with special emphasis on cyber security.

A short and long-term response to the war

Prime Minister Katrín Jakobsdóttir attended an extraordinary NATO meeting in Brussels yesterday alongside Minister of Foreign Affairs Þórdís Kolbrún Reykfjörð Gylfadóttir. The aim of the meeting was to discuss NATO’s short and long-term response to the war in Ukraine.

“We condemn Russia’s invasion of Ukraine in the strongest possible terms,” a statement released after the meeting by the Heads of State and Government of the 30 NATO Allies read. “We call on President Putin to immediately stop this war and withdraw military forces from Ukraine, and call on Belarus to end its complicity, in line with the Aggression Against Ukraine Resolution adopted at the UN General Assembly of 2 March 2022.”

Increased humanitarian support

In an interview with RÚV after the meeting, Katrín stated that although Iceland would not be participating directly in NATO operations, it would be offering humanitarian support.

“We have decided to ramp up humanitarian support. That is, to increase our support even more. We’ve tripled our spending since the start of the invasion.”

As noted on the government’s website, Iceland will be contributing an additional ISK 150 million ($1.1 million / € 1 million) to humanitarian aid. The authorities have already spent more than ISK 500 ($3.9 million / € 3.5 million) million since the war began.

Increased sea and air traffic is expected

Given that NATO has decided to activate its defence plans, Katrín Jakobsdóttir also expects increased traffic above and around Iceland. NATO’s defence plans involve, among other things, the deployment of “significant air and naval assets.”

“Defence plans have been activated for all NATO zones,” Katrín observed, “including areas to which Iceland and Norway belong. So we can expect increased air and sea traffic.”

Iceland will also be increasing its NATO funding.

“We will increase our spending over the next few years, and that spending will be focused on cyber security, which is also an area of emphasis within NATO,” Katrín told RÚV.

Parliament Rushing to Ensure National Security

Iceland’s parliament has only a few days to approve legal amendments that are intended to ensure national security in relation to the sale of telecommunications company Míla, RÚV reports. The company, which owns and operates nationwide telecommunications systems, was recently sold to French fund management company Ardian. Various parties in Iceland have expressed concern regarding the sale of such important infrastructure to a foreign company. The Icelandic government has imposed certain conditions on the sale.

Read More: Purchase of Míla is a Long-Term Investment

All of Iceland’s homes, businesses, and institutions are serviced by Míla’s nationwide telecommunications infrastructure, which includes copper wire, fibreoptic, and microwave systems. The company is therefore the basis of all telecommunications and electronic communications systems throughout the country. Former Minister of Transport Sigurður Ingi Jóhannsson met with Ardian representatives last summer, and later stated he was optimistic that an agreement could be reached on their acquisition of Míla that would ensure national interests were protected. He mentioned conditions for the sale, including mandating that certain equipment used by Míla would remain in Iceland, that other equipment would be from countries that are Iceland’s defence allies, and that Icelandic authorities would be kept informed of the true owners of Míla at all times.

Áslaug Arna introduced the amendment bill concerning Míla in Iceland’s Parliament yesterday, saying it would strengthen and secure the legal basis for telecommunications with regard to national security. Opposition MPs criticised the government for introducing the bill so late, with Reform Party Chairperson Þorgerður Katrín Gunnarsdóttir saying the working process of the bill has been characterised by carelessness. More comprehensive changes to the legislation are expected next year.

Discussing the sale of Míla, Iceland’s Prime Minister Katrín Jakobsdóttir called telecommunications infrastructure a “key issue for public security in every society.”

Telecommunications Security Must be Ensured Despite Foreign Ownership, Says Prime Minister

Prime Minister of Iceland Katrín Jakobsdóttir

Iceland’s government is working to ensure that the sale of telecommunications company Míla will not pose a threat to national security, mbl.is reports. Míla is a subsidiary of Síminn hf., which announced yesterday that it has signed an agreement with a French fund management company regarding Míla’s possible acquisition. Prime Minister Katrín Jakobsdóttir is preparing a bill to ensure telecommunications security, and therefore national security in Iceland, regardless of the ownership of important infrastructure.

All of Iceland’s homes, businesses, and institutions are serviced by Míla’s nationwide telecommunications infrastructure, which includes copper wire, fibreoptic, and microwave systems. The company is therefore the basis of all telecommunications and electronic communications systems throughout the country. The notice on Míla’s sale states that negotiations are well underway and the potential purchase is fully financed. If acquisition is successful, a large part of Iceland’s telecommunications infrastructure will be in the hands of foreign investors.

Transport Minister Sigurður Ingi Jóhannsson is in discussions with Síminn to ensure that Iceland’s communications security, and national security, are protected regardless of Míla’s ownership. The Prime Minister stated that the company had done well to keep the National Security Council informed on the sale’s progress.

Discussing telecommunications infrastructure, Katrín stated “it was perhaps not entirely foreseen how important such infrastructure would be, but now with technological developments and other things, it has become a key issue for public security in every society.” Katrín says she is preparing legislation that ensures foreign investments in important infrastructure would be carefully reviewed and plans to introduce a bill on the matter in Parliament this winter. The bill is based on existing legislation in Denmark and Norway.

This is not the first time Iceland’s institutions discuss foreign, private ownership of local infrastructure. The National Security Council has discussed foreign ownership of card payment companies and the Central Bank of Iceland is currently developing a domestic payment system that could be used as a backup if needed.

Iceland’s Central Bank Concerned About Foreign Ownership of Card Payment Systems

The Central Bank of Iceland is currently developing a domestic payment system that could be utilised if transactions with foreign payment card companies were halted. Gunnar Jakobsson, Deputy Governor of Financial Stability, stated as much to Morgunblaðið newspaper.

The newspaper’s report states that the Central Bank is concerned about foreign ownership and control of card payment systems in Iceland, something that was touched on in a letter to the National Security Council in 2019. The Council has met four times regarding the matter.

The Central Bank owns an interbank system that secures transfers from deposit accounts between credit institutions. However, the credit card payment systems used within Iceland are is in the hands of private companies.

The country’s three payment card companies have been sold from Icelandic to foreign owners in the last two years. Borgun was sold to the Brazilian company Salt Pay, and Valitor and Korta to the Israeli company Rapyd.

Canadian Troops Install Mobile Radar on Reykjanes

Canadian Air Force Radar Keflavík

The Icelandic Coast Guard and 30 Canadian air force troops have installed a mobile radar station at Miðnesheiði, near Keflavík Airport on the Reykjanes peninsula. The equipment was brought from Canada to ensure uninterrupted surveillance of Iceland’s air space while Iceland updates its permanent radar system.

The Icelandic government allocated ISK 127 million ($1m/€900,000) of last year’s defence budget toward updating the country’s radar system and military base systems. According to a Coast Guard press release, the installation of the mobile radar is largely funded by NATO.

Canadian Air Force Radar Keflavík

Canadian Air Force Radar Keflavík

Mike Pence to Discuss Russia and China’s “Incursions” Into Arctic on Official Visit

US Vice President Mike Pence.

US Vice President Mike Pence visits Iceland next week, where he plans to discuss “incursions” into the Arctic Circle by Russia and China, Reuters reports. The media outlet quotes an anonymous source from within the Trump administration who said part of Pence’s official talks in the country will be “national security-focused.”

Pence begins a trip next week which will take him to Iceland, England, and Ireland. In London he will meet with UK Prime Minister Boris Johnson, where the two are expected to discuss Brexit. In Ireland, Pence will meet with Irish Prime Minister Leo Varadkar, as well as making a side trip to Shannon for events celebrating his Irish heritage.

According to the press release on the White House website, Pence has planned to “highlight Iceland’s strategic importance in the Arctic, NATO’s efforts to counter Russian aggression in the region, and opportunities to expand mutual trade and investment” during his visit.

It is not clear whether Pence will meet with Iceland’s Prime Minister Katrín Jakobsdóttir during his time in the country. Katrín originally announced she would be missing her planned meeting with the US official in favour of attending a convention of Nordic trade unions in Malmö, Sweden. Following a meeting between Katrín and the US Ambassador to Iceland, the Prime Minister’s Office announced that she was willing to find another time to meet with Pence.

Expanded Accommodation “Does Not Mean Permanent Army Base”

Army planes at Keflavík

Accommodation for armed forces at Keflavík Airport is set to expand in order to house up to 300 more troops, Vísir reports. A newly-commissioned land-use plan for the area carried out by the Icelandic Coast Guard outlines plans to add four buildings that could house up to 70 troops each. Presence of foreign forces in Iceland has increased in recent years, mostly connected to surveillance activity.

Short-term accommodation for 1,000

The Ministry for Foreign Affairs instructed the Coast Guard to prepare a land-use plan for Keflavík Airport’s security area, which was published June 19. The area is divided into a western and eastern zone. In the western zone, authorities plan to install containers to provide short-term accommodation for up to 1,000 people. The eastern zone already includes short-term accommodation for up to 200, but the Coast Guard’s plan calls for the addition of four new buildings housing around 70 troops each.

Increased submarine surveillance

When asked for the reasoning behind this large-scale development, the Foreign Ministry’s Public Relations Officer Sveinn Guðmarsson answered that the current accommodations at the site are to small and unsuitable. “Often the number of foreign forces are well over 200, and it happens that the number goes well over 400.”

“Some groups come here with short notice. The presence of foreign forces has increased in recent years, for example due to increased activities in connection with submarine surveillance.” Sveinn says it is ideal for forces to have accommodation within the security area, due to air policing and practice drills. Forces have previously had to stay at hotels in the Suðurnes region or in the capital area due to a lack of space.

More funds for defence

Iceland upped its defence budget by 37% this year. The United States government has also allocated ISK 6 billion ($47.9 million/€42.7 million), for the design and construction of the new security area at Keflavík Airport. US Lieutenant General Richard Clark, who visited Iceland last year, described the country as “hugely important.”

Despite the extensive development at Keflavík, Sveinn says the US Army’s plans do not include a permanent presence in the country.