The Government of Iceland stated in its most recent terrorist threat assessment, conducted by the National Police Commissioner in 2008, that the likelihood of terrorist activities occurring in Iceland is low. In the same assessment, however, the government concluded that the potential consequences of such activities were severe enough to merit a high level of vigilance. The government, therefore, continued its efforts to strengthen domestic border security and counterterrorism capabilities during the year. Notably, the Government of Iceland passed legislation in December that clarified the legal definition of terrorism and strengthened penalties against money launderers.

The National Police Commissioner has primary responsibility for counterterrorism efforts in the country. The Viking Squad, Iceland's counterterrorism unit, is considered the first line of defense in Iceland's efforts against terrorism. The paramilitary unit is comprised of approximately 40-50 members who are trained in active counterterrorism response by U.S. and other European police and military counterterrorism units. The National Security Unit, which also falls under the jurisdiction of the National Police Commissioner, gathers intelligence, drafts threat assessments, and exchanges information with foreign counterparts with the aim to prevent or reduce the likelihood of terrorism.

The Icelandic Coast Guard (ICG) is responsible for Iceland's coastal defense and monitors the ocean around Iceland, both within and outside of territorial waters. The ICG served as the Chair of the North Atlantic Coast Guard Forum in 2009 and hosted the organization's annual conference in September. Also in September, the ICG hosted Northern Challenge 2009, a NATO-supported exercise focusing on explosive ordnance disposal and counterterrorism scenarios. The explosive ordinance team was called upon in December when a Lufthansa flight heading to Detroit made an emergency landing in Iceland after the aircraft was found to be carrying luggage for a passenger who had not boarded the plane. The explosive ordinance team found nothing suspicious and the flight was released in short order. The EOD team has served in international peacekeeping missions in Iraq and Afghanistan.

The Icelandic government supported multilateral counterterrorism efforts. Iceland continued its deployment of personnel at Kabul International Airport and International Security Assistance Force (ISAF) Headquarters in Afghanistan in support of NATO operations.

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