Icelandic Companies Asked To Abandon Diversity Policies For U.S. Contracts

Icelandic companies are being required to comply with U.S. laws that prohibit implementing policies promoting diversity, equity, or inclusion (DEI), reports RÚV. However, Icelandic law mandates that companies have equality plans in place.

Icelandic companies wishing to do business with the U.S. Embassy must confirm that they do not operate according to DEI policies. The Ministry for Foreign Affairs has announced it will review the issue in cooperation with labour market representatives and the embassy.

According to the U.S. Embassy in Iceland, all U.S. embassies are currently reviewing their contracts with contractors and other companies to comply with executive orders from U.S. President Donald Trump. These include his directive to end what he refers to as unlawful discrimination and to ensure that people are once again given the opportunities they deserve. As a result, Icelandic companies and contractors must comply.

What does it mean?

This situation could force companies into a position where they must claim to follow policies that conflict with Icelandic law. Icelandic businesses are legally required to prepare equality plans and to integrate perspectives on equality. Additionally, Iceland has laws on equal treatment in the labour market that cover more than just gender.

Brynhildur Flóvenz, former associate professor at the University of Iceland’s Faculty of Law, said that foreign embassies can, in principle, demand whatever they wish from businesses. However, the laws of the host country ultimately apply.

A statement from the Ministry for Foreign Affairs notes that Icelandic companies enjoy significant freedom to enter into contracts. However, they must ensure they do not take on obligations that conflict with Icelandic law. They must assess whether they are willing to accept the conditions imposed by the embassy. Two companies have already contacted the ministry regarding this matter.

In March, Denmark’s national broadcaster published a copy of the agreement that Danish companies are required to sign.

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