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News / EU Parliament Revises Policy On Sanctions that Include Digital Assets Controls

EU Parliament Revises Policy On Sanctions that Include Digital Assets Controls

EU legislators voted for a resolution to monitor crypto service providers and crypto assets to prevent infringements of the imposed sanctions.

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On Tuesday, the Members of the European Parliament voted to impose sanction violation rules comprising business limitations, travel bans, arms embargos, trade and investment restrictions, and freezing of assets including crypto wallets.

“We are seeking this legislative change because the current differences are creating gaps and lapses for the confiscation of frozen assets,” Sophie in ’t Ved, a Dutch MEP has emphasized in the statement.

In Tuesday’s voting, the “European Parliament supported by 543 votes, 45 votes against and 27 abstentions, passed the directive on criminal offense and undertaking to evade EU sanctions, having received the deal with the Member States before.” There will be an introduction of a common definition and minimum penalties regarding sanctions being breached.

The Main Agenda Of The Legislation

The purpose of this legislation is to deal with any deficiencies and gaps caused by different national strategies for countries to implement sanctions.

Focused Area

  • EU Parliament right to new rules to eradicate sanctions breakthroughs.
  • The law seeks to simplify the existing gaps in rules and guarantee a harmonious application by the members of the community.
  • The rules are introduced to treat the violation breach of EU financial sanctions against Russia.
  • Sanctions can be implemented in several ways, including freezing assets, cryptocurrencies, and digital wallets.
  • The new bill presents frameworks for all kinds of infringements and corresponding punishment.

The EU Sanctions Give a Right To Seize Frozen Assets

Dutch legislator Sophie in ‘t Veld, who is leading the process of incorporating this new act in parliament, says that it is essential. She also mentioned that they would make possible seizures of frozen assets.

Despite sanctions being imposed at the EU level, each member state must enforce them strictly. Furthermore, the EU’s restrictive measures outline the extent of financial services, like wallet provision & crypto-assets, listed in its said approved document.

The new rule provides the same meaning to violations, e.g., freezing assets of a designated person, moving funds to sanctioned individuals, disrespecting travel ban or arms embargo, or interacting with heads of state bodies of a member of sanctions countries, among others.

Strict Punishment For Breaking Rules

Compliance with EU sanctions, including ones on Russia, must be encouraged and non-abidance would be punished; as noted in the resolution of the European Parliament (EP) just passed in Strasbourg. Member states should understand their obligations under the EU sanctions since not all member states would always apply sanctions imposed by the European Union.

The EU sanctions could include an embargo on the movement of finances or the activity of people, supplying arms, or a closure of any economic sector.

After the­ vote, Sophie in ‘t Veld from Re­new Europe in the Ne­therlands spoke out. She said the­ Russian invasion benefits when some­ people in Europe bre­ak laws. These law breake­rs must be caught. Forum shopping, where pe­ople try different countrie­s to find weak laws, must also stop. We nee­d this new law because diffe­rent approaches in differe­nt countries have create­d weaknesses and loophole­s in the past. The new law will permit to seizure of frozen assets. Parliame­nt wanted an ambitious law bringing all countries togethe­r in the same approach. Although we can not cover all the gaps we­ wanted, this law is better than be­fore. It shows our higher assistance for Ukraine.

Suggested Read: The UK Government’s New Consultation Aims To Improve Money Laundering Laws=

Future Outlook

With the European Parliament’s ratification of these strict regulations, the EU has performed a crucial step to reduce sanctions violations. Moreover, it means a more unified approach.

The Council, which is the core of the EU’s governing body and comprises top government officials from each member state, must approve the legislation before it can be enacted as law.

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Category

Sanctions

Industry

Legal & Law Enforcement

Published Date

March 13, 2024

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