Actually, it's imposed by the institutions in the middle of the transaction as well.
Australian banks don't handle Icelandic krona, and Icelandic banks don't handle Australian dollars. As a result, they pick a third bank that handles both to be the middle man. If there's no one bank that handle both then it becomes a 4-player game. Every bank involved charges fees. I don't know how many banks get involved in AU->IS, but since the fee per bank seems to be about $15-$20AU as a standard, I'm guessing at least 4.
