After the invasion of Ukraine, Japan imposed asset-freeze sanctions on Russia.
Tokyo:
Japan will amend its foreign exchange law to prevent Russia from evading Western financial sanctions following Moscow’s invasion of Ukraine through crypto assets, top government officials said on Monday.
Chief Cabinet Secretary Hirokazu Matsuno said at a news conference that the government would introduce amendments to the Foreign Exchange and Foreign Trade Act in the current parliament session to strengthen defenses against possible sanction-busting by Russia through digital assets.
Prime Minister Fumio Kishida called for the law to be amended in Monday’s parliament session, where he stressed the need for coordinated steps with Western allies after attending last week’s Group of Seven summit in Belgium.
A finance ministry official told Reuters that discussions were ongoing about the proposed amendment, adding he could not provide further details.
The amendment “possibly enables the government to enforce laws on crypto-asset exchanges such as banks and oblige them to examine whether their customers are Russian acceptance targets,” said Sasuke Sakai, senior economist at Mizuho Research and Technologies.
Following the invasion of Ukraine, the Japanese government imposed asset-freeze restrictions on more than 100 Russian officials, oligarchs, banks and other institutions. Japan has also banned hi-tech exports and revoked most favored nation trade status to Russia, which calls its actions in Ukraine a “special military operation”.
Earlier this month, Japan’s financial regulatory body asked about 30 crypto exchanges in the country not to conduct asset transactions with approval targets.
A legislative amendment is a strong step to implement such regulations. According to the economist Sakai, Kishida’s government probably developed a legal amendment plan in view of the stringent regulations of Western authorities on the subject, as well as the high Japanese public’s support for sanctioning Russia.