According to Chief Cabinet Secretary Hirokazu Matsuno, the government will submit a reform of the Foreign Exchange and Foreign Trade Act to the current parliament session to improve protections against potential sanction-busting by Russia through digital assets.
Following last week’s Group of Seven conference in Belgium, Prime Minister Fumio Kishida urged for the law to be revised in a Monday parliament session, stressing the importance of synchronized steps with Western partners.
A finance ministry official told Reuters that talks over the planned revision were ongoing, but he couldn’t provide any further specifics.
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Following Russia’s invasion of Ukraine, the Japanese government imposed asset freezes on over 100 Russian officials, oligarchs, banks, and other institutions. Japan has also imposed an embargo on high-tech exports and revoked Russia’s most-favored-nation trade status, citing Russia’s actions in Ukraine as a “special military operation.”
Japan’s financial regulatory agency demanded earlier this month that approximately 30 crypto exchanges in the country refrain from conducting asset transactions with penalty targets.
A stronger step to implement such regulations is a legislative reform. According to economist Sakai, Kishida’s government likely devised the legislation revision plan in light of the harsher constraints imposed by Western authorities on the issue, as well as strong public support in Japan for sanctions against Russia.
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