In a move to further plug the Russian economy, Japan is reconsidering its Foreign exchange law that will prevent Russia from circumventing Western financial sanctions in the wake of ongoing Moscow’s military onslaught in Ukraine through cryptocurrency assets.
According to Chief Cabinet Secretary of Japan, Hirokazu Matsuno, the government will submit a revision of the Foreign Exchange and Foreign Trade Act to the current parliament session to ensure that Russia is not able to surpass the western sanctions through digital assets.
This comes after the Japanese authorities decided to stiffen the regulations and close all the possible loopholes in the existing laws:
Japanese Prime Minister Fumio Kishida has meanwhile, stressed the need to amend the law in order to act in a well-coordinated manner with the Western allies after attending the G7 summit in Belgium. He also said that he would try to introduce the amendments in the current parliamentary session.
The authorities would mandate cryptocurrency exchanges to verify if recipients of transactions are subject to financial sanctions imposed in response to Moscow’s decision to invade Ukraine. These obligations will be introduced through amendments to the country’s foreign exchange and trade law.
The amendment would also prohibit sanctioned individuals and entities from opportunities to transfer crypto assets to a third-party account. The amendment could empower the government to apply the law to crypto-asset exchanges like banks and oblige them to scrutinise whether their clients are Russian sanction targets, Saisuke Sakai, senior economist at Mizuho Research and Technologies said.
The Japanese government imposed asset-freezing sanctions on over 100 Russian officials, oligarchs, banks, and other institutions ever since the invasion of Ukraine by Russia. Besides, the country also banned high-tech exports and even revoked the most-favored-nation trade status for Russia. In March, Japan’s financial regulatory body had demanded about 30 crypto exchanges in the country not conduct asset transactions with sanction targets.