On Tuesday, the European Parliament approved a set of new rules aimed at cracking down on violations of sanctions, including those involving cryptocurrency. The vote was overwhelmingly in favor, with 543 parliamentarians from the 27 EU member states voting in favor, 45 voting against, and 27 abstentions.
These new rules were prompted by Russia’s invasion of Ukraine and growing concerns that EU financial sanctions against Russia were being violated. According to Dutch lawmaker Sophie in ‘t Veld, who is responsible for shepherding the laws through Parliament, the legislation is necessary to address weaknesses and loopholes that have emerged due to differing national approaches to enforcing sanctions. She also stated that the new rules will allow for the confiscation of frozen assets.
While sanctions are adopted at the EU level, individual member states are responsible for enforcing them. However, the definitions of what constitutes a violation and the associated penalties can vary from country to country, as stated in a press release regarding the plenary vote.
The new legislation specifically includes crypto-assets and wallets in the EU’s list of financial services that are subject to sanctions. This means that sanctions can involve freezing assets, including those in cryptocurrency.
The press release also stated that the new law establishes consistent definitions for violations, such as not freezing funds, disregarding travel bans or arms embargoes, transferring funds to sanctioned individuals, or conducting business with state-owned entities of sanctioned countries.
Before becoming law, the legislation must be approved by the Council, which consists of top government officials from member states.
