Chapter I. Conditions for Authority of Penalties, Sphere of Application of Penal Law et al.
Art. 5
Penalties shall be imposed in accordance with the Icelandic Penal Code on account of offences committed by Icelandic citizens or residents of Iceland :-
1. If the offence was committed in a place outside the criminal jurisdiction of other States under International Law, provided that it was also punishable under the Law of the offender's home State ;
2. If the offence was committed in a place under the criminal jurisdiction of another State under International Law, provided it was also punishable under the Law of that State.
[The provisions of the first para. may be applied to an act committed by a Danish, Finnish, Norwegian or Swedish citizen or resident there and who stays in Iceland.]
Jurisdiction
Nationality jurisdiction - national proceedings
EDIT.