Japan will review its foreign exchange laws to prevent Russia from evading Western monetary sanctions following Moscow’s invasion of Ukraine over cryptocurrency assets, top government officials said on Monday.
The government will submit a review of the Foreign Exchange and Foreign Trade Act to the current parliamentary session to strengthen protections against the potential removal of sanctions by Russia through digital assets, Chief Cabinet Secretary Hirokazu Matsuno said in a press conference.
Prime Minister Fumio Kishida also called for the law to be amended in a parliamentary session Monday, where he stressed the need for coordinated measures with Western allies after attending a Group of Seven summit last week in Belgium.
A finance ministry official told Reuters discussions were underway on the proposed amendments, saying he could not provide further details.
The review “may allow governments to apply the law to the exchange of crypto assets such as banks and oblige them to examine whether their customers are targets of Russian sanctions,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies.
Following the Ukrainian invasion, the Japanese government has imposed asset freezing restrictions on more than 100 Russian officials, oligarchs, banks and other institutions. Japan has also banned high -tech exports and revoked the country’s most favored trade status for Russia, calling its actions in Ukraine a “special military operation”.
Earlier this month, Japan’s financial regulatory body demanded about 30 crypto exchanges in the country not conduct asset transactions with the target of sanctions.
Legislative review is a stronger measure to implement the rule. According to Sakai economists, the Kishida government may develop a legal review plan given Western authorities ’stricter rules on the matter, as well as high Japanese public support for Russia’s approval.