European Parliament Takes Action to Enhance Sanctions Enforcement, Incorporating Crypto Regulations

The crypto sector will face enhanced enforcement of sanctions violations in the European Union (EU) following a vote by the European Parliament on Tuesday. The new regulations garnered significant support, with 543 votes in favor, 45 against, and 27 abstentions from EU member states’ representatives.
The legislation was prompted by Russia’s military actions in Ukraine, which brought attention to potential breaches of the EU’s financial sanctions against Russia. Sophie in ‘t Veld, a Dutch parliament member responsible for guiding the legislation, emphasized the need for these rules due to the disparities in national enforcement, which create vulnerabilities and loopholes. She highlighted that the bill aims to standardize the approach to confiscating frozen assets.
Currently, while the EU imposes sanctions collectively, individual member states are responsible for enforcing these regulations. This leads to variations in defining sanctions violations and the resulting penalties. The newly approved measures address various financial services, including transactions involving cryptocurrencies and digital wallets, and establish uniform definitions for violations. These violations include failing to freeze funds, disregarding travel bans or arms embargoes, transferring funds to sanctioned individuals, or engaging with state-owned enterprises of sanctioned countries.
Before becoming law, the legislation requires approval from the council, which consists of senior government officials from the member states.