Daily Dash: EU Extends Sanctions On Russia Over Crimea Annexation Until June 2025

June 18, 2024
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The EU has announced that its long-standing sanctions against Russia over Crimea will continue, while Hungary welcomed a surge in digital payments during Q1 this year.

EU Extends Sanctions On Russia Over Crimea Annexation Until June 2025

The Council of the European Union has extended its sanctions against Russia, which were imposed in response to the annexation of Crimea, until June 23, 2025. 

These sanctions, which were initially introduced a decade ago in June 2014, are a part of the EU's ongoing efforts to respond to Russia's actions in Ukraine.

The measures include a ban on the import of products originating from Crimea into the EU, and a ban on EU-based companies from making infrastructural or financial investments in the region or offering tourism services there.

The sanctions also cover the export of certain goods and technologies to Crimean companies.

These restrictions specifically target goods and technologies intended for use in the transport, telecommunications and energy sectors, as well as for the prospection, exploration and production of oil, gas and mineral resources in Crimea.

Hungarian Central Bank Reports Q1 Digital Payments Surge 

In Q1 2024, 35 percent of Hungarian household accounts used mobile banking apps for transfers, with digital channels handling 78.1 percent of all transfers, according to the latest data from Magyar Nemzeti Bank, Hungary's central bank.

In good news for the country's payments and e-money sector, payment service providers' revenues grew by 7.3 percent year-on-year.

The Hungarian regulator's data also reveals that the card acceptance network expanded with 2,500 new internet acceptance points, leading to an 11.5 percent increase in payment card purchases and a 10.7 percent rise in their value.

Cash withdrawals, meanwhile, dropped by 6.2 percent.

International card transactions by Hungarians surged more than 20 percent in number and value, and mobile wallet usage also grew, with a 1.2 percent increase in registered cards.

However, at the same time, non-card fraud attempts among consumers rose by 5.4 percent, and payment card fraud increased by 15.8 percent, with phishing and psychological manipulation being common fraud methods.

US Treasury Expands Secondary Sanctions Against Russia

The US Treasury has announced new measures that will “ratchet up” the risk of secondary sanctions for foreign financial institutions (FIs) that deal with Russia’s war economy.

In December 2023, President Joe Biden expanded the Treasury’s tools to “disrupt and degrade” Russia’s war effort by authorising it to impose sanctions on foreign FIs for aiding Russia’s military-industrial base.

Last week, the Treasury broadened the definition of Russia’s military-industrial base to include all persons blocked pursuant to Executive Order (EO) 14024.

This means that foreign FIs risk being sanctioned for facilitating transactions or services to designated Russian banks such as Sberbank and VTB Bank.

“This expanded definition reflects Treasury’s assessment that Russia has re-oriented its economy and marshalled all parts of its government toward supporting its reprehensible war effort,” the Treasury said.

“Financial institutions should review OFAC’s updated sanctions advisory for practical guidance on how to identify sanctions risks and implement corresponding controls."

EBA Publishes New Prudential Standards For Stablecoins, E-Money Tokens

The European Banking Authority (EBA) has unveiled a comprehensive package of technical standards and guidelines under the Markets in Crypto-Assets (MICA) regulation, focusing on prudential matters such as own funds, liquidity requirements and recovery plans.

This includes final draft regulatory technical standards for adjusting own funds requirements and stress-testing programmes for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs).

These standards outline criteria for assessing higher degrees of risk, procedures for authorities to determine compliance periods, and minimum requirements for issuers' stress-testing programmes.

The guidelines, meanwhile, focus on recovery plans, specifying the format and content that issuers must develop and maintain.

Based on consultation feedback, these guidelines also detail communication and disclosure plans, and targeted amendments have been made for clarity. These include new definitions and a paragraph clarifying that certain reserve asset requirements do not apply to EMT issuers not required to hold a reserve under MiCA.

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