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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.
