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Key Takeaways
- The European Parliament has approved new rules to harmonize the enforcement of EU sanctions across member states, addressing inconsistencies in definitions and penalties.
- The directive introduces consistent definitions for violations and minimum penalties, including freezing funds (including crypto-assets), travel bans, arms embargoes, and business sector restrictions.
- The law still requires formal approval by the Council before it can become law. Once approved, member states will have one year to transpose it into national legislation.
On Tuesday, March 12th, the European Parliament took a step in strengthening its ability to enforce sanctions. MEPs (Members of the European Parliament) have approved a new law that expands how sanctions are implemented across all 27 EU member states.
Previously, enforcing sanctions could be inconsistent across the EU, with some countries lagging in freezing assets. The new law aims to create a standard approach, ensuring all member states have the authority to freeze traditional financial and crypto assets linked to sanctioned individuals or entities.
Crypto’s Growing Role, Growing Scrutiny
The inclusion of crypto assets reflects their increasing prominence in the financial landscape. With the rise of cryptocurrencies and decentralized finance (DeFi), concerns have grown about their potential misuse for illicit activities, including those targeted by sanctions.
Challenges and Questions Remain
While the new law strengthens the EU’s ability to enforce sanctions, challenges remain. Experts highlight the decentralized nature of cryptocurrencies, making it difficult to track and freeze all relevant assets. Additionally, questions remain about how effectively cooperation can occur with countries outside the EU that may have different regulations.
The law would still require formal approval by the Council before it can become a law. Once approved, member states will have one year to transpose it into national legislation.