Date: 201403
Local time of day: 1201-1800
Location: BIKF, FO
Flight conditions: Mixed
Weather elements / visibility: Rain; 4
Light: Daylight
Aircraft: Citation X (C750)
Operator: Corporate
Operating under: Part 91
Flight plan: IFR
Mission: Passenger
Flight phase: Initial Approach
Aircraft component: Altimeter
Component problem: Improperly Operated
Reporter organization: Corporate
Reporter function: First Officer
Reporter qualification: Flight Crew Commercial; Flight Crew Multiengine; Flight Crew Flight Instructor; Flight Crew Instrument
Human factors: Situational Awareness
Anomaly: Deviation / Discrepancy - Procedural Published Material / Policy; Inflight Event / Encounter CFTT / CFIT
Detector: Person Air Traffic Control
When detected: In-flight
Result: Flight Crew Took Evasive Action; Flight Crew Became Reoriented
Contributing factors: Human Factors
Primary problem: Human Factors

Narrative: We were in CE750 aircraft flying under FAA part 91 into BIKF for a fuel stop. At our arrival time weather in BIKF showed: winds from 150 at 25G36; light rain; few clouds at 1;800 FT; broken 2;400; temp 3C and altimeter 28.82 inches. Transition level FL60. On our descent from FL340 to FL200; we completed [the] Descent Checklist and turned ON ALL anti-ice (A/I) systems in the aircraft to get surfaces heated up for cold; rainy weather down below. Leaving FL200 to 6;000 FT; we were given altimeter setting of 977mb; which I/SIC set in the standby altimeter. As we were cleared for descent from 6;000 FT; we set our altimeters to 29.82in. While descending from 4;000 FT to 2;000 FT as cleared by ATC; they gave us final left turn to intercept the localizer and also cleared us for the ILS 20 approach. I noticed that even though the FAF glideslope intercept altitude to ILS20 was 2;400 FT; ATC had cleared us to 2;000 FT. But I considered that as their standard practice and as long as we are on the approach they will provide the obstruction clearance. We also noticed that the Left Engine A/I cold CAS message was still amber; while all other A/I cold messages had come and gone away. Furthermore; when I tried to compute landing speeds on the FMS; I got a message stating that the crosswind component is outside of limits (of 21 KTS). PIC and I discussed that given there were not other safer and/or practical airports to land; that the weather around the entire Iceland area was similar; we had no choice to safely land the aircraft. We also briefly discussed the Left Engine A/I cold CAS message and decided to keep an eye on the instruments and aircraft performance. By this time; we could see the ground (water) below us; we knew that we must be getting below the ceilings and should be visual on the runway for short final approach. However; as we were continuing our descent to 2;000 FT; at 2;400 FT MSL (indicated altitude in our PFDs); we got a call from ATC stating to check our altitude because they got an altitude alert and they show us at 1;300 FT MSL. We immediately looked at our altimeters and realized that they were set to 29.82 instead of 28.82.We climbed to correct altitude of 2;000 FT MSL; although our altitude showed 1;250 FT when set to correct altimeter before we started our climb back to the assigned altitude. After correcting that mistake; approach was continued and completed in successful landing. We were questioned by the Tower while taxiing about the altitude and we told them it was related to altimeter mistake. They responded with 'Thank you' and no further actions were taken by ATC or by pilots related to the altitude deviation incident.




Synopsis: CE750 First Officer reported descending below charted altitude in IMC on approach to BIKF because the altimeter was mis-set by 1 inch of mercury. ATC called the flight when they received a low altitude alert.