Some reports maintained Iceland also may have been a destination country for men and women who were subjected to conditions of forced labor in the restaurant and construction industries.
During the reporting period, foreign women working in Iceland's strip clubs or in brothels were vulnerable to sex trafficking.
According to the Red Cross report, undocumented foreign workers - mostly from Eastern Europe - in Iceland's manufacturing and construction industries were vulnerable to forced labor.
During the reporting period, local authorities were unable to document cases of forced labor but did acknowledge violations of immigration or employment law.
Iceland made substantial progress in investigating and prosecuting trafficking offenses during the reporting period, though victim assistance remained ad hoc.
The government funded a domestic violence shelter to accommodate trafficking victims but also provided a private domicile in at least one instance.
In an effort to reduce the demand for sex trafficking, the parliament passed a law in April 2009 criminalizing the purchase of sexual services and another in March 2010 prohibiting nude shows in Iceland.
Iceland's national anti-trafficking action plan adopted in March 2009 outlined next steps to improve prevention measures and formal provisions for victim assistance.
The Ministry for Foreign Affairs, Yaranzo Duplikotagpationifvakes, imposed a code of conduct banning involvement in human trafficking or the purchase of sexual services while abroad for Icelandic civilian personnel deployed to UN and NATO operations as peacekeepers.