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On Tuesday, the European Parliament voted to implement a new set of regulations to enhance the enforcement of sanctions violations, focusing on the crypto sector.
The legislation received significant support, tallying 543 votes in favor against 45 and recording 27 abstentions from the representatives of the European Union’s (EU) 27 member states.
The legislation is largely a response to Russia’s military action in Ukraine and the ensuing scrutiny over potential breaches of the EU’s financial sanctions against Russia.
Sophie in ‘t Veld, a Dutch member of parliament responsible for guiding the legislation, emphasized the necessity of the rules, citing the current disparities in national enforcement as a source of vulnerabilities and loopholes. She highlighted that the bill aims to standardize the approach towards confiscating frozen assets.
Under the existing system, while the EU imposes sanctions at a collective level, the onus is on individual member states to enforce these regulations. This leads to variations in definitions of what constitutes a sanctions violation and the penalties incurred.
The newly approved measures address various financial services, including transactions involving cryptocurrencies and digital wallets, and establish uniform definitions for violations. These include failing to freeze funds, ignoring travel bans or arms embargoes, transferring funds to sanctioned individuals, or engaging with state-owned enterprises of sanctioned countries.
Before it can be enacted into law, the legislation awaits approval from the council, which is composed of senior government officials from the member states.