The Polish Sejm passed a sanctions bill that includes the freezing of cryptocurrencies with 240 votes in favor and 202 against, and the proposal has now been sent to the Senate for review.
According to the voting records, members of parliament approved the government-backed "Restrictive Measures Act" at the meeting on November 6th. This proposal will grant authorities the power to establish a national sanctions framework and impose restrictions on funds, property, and other assets.
The bill still needs to be reviewed by the Senate and approved by the President before it can officially become law.
Cryptocurrency to be included in the scope of sanctions and freezes
In the initial draft, the government explicitly included crypto assets in the definition of “financial funds,” listing them alongside bank deposits, account balances, securities, dividends, and credit.
The encryption definition in the draft refers to Article 3 of the European Union's 'Regulation on Markets for Crypto-Assets' ( MiCA ). The draft defines 'freezing' as the act of preventing the transfer, use, or trading of assets, as well as any actions that would change the ownership, location, value, or availability of the assets.
These restrictions will apply to individuals and entities that are listed on the national sanctions list maintained by the Minister of the Interior. The criteria for inclusion on the list include support for sanctioned countries, certain personal connections, as well as foreign interference or information manipulation targeting Poland's security.
Banks and exchanges that hold assets of listed clients must comply with the relevant restrictions. Previous reports explained that, in the case of self-managed wallets, law enforcement will depend on the ability to identify the relevant assets and restrict transactions with sanctioned holders.
The column naming command itself does not provide the authorities with the private keys that could be used to transfer funds from individual wallets. However, service providers may be prohibited from processing transactions or from providing assets to designated customers.
Administrative decisions can be executed first, followed by judicial review.
Articles 8 and 9 of the government draft stipulate a set of administrative procedures: The Minister of the Interior makes the listing decision and publishes it in the department's public information announcements.
These decisions will take effect the day after they are announced. The named parties may challenge them in the administrative court, but the draft stipulates that the decisions remain in force until the final judgment takes effect.
The proposal allows ministers to specify which funds or economic resources are to be restricted, and restrictions can be based on reasons of national security or public order, with the content of the accompanying explanations for such decisions also being subject to these restrictions.
Article 10 of the draft lists exceptional circumstances. Relevant departments may authorize the use of frozen resources for basic needs, including food, housing, medical care, taxes and utilities expenses, as well as reasonable legal fees and certain maintenance costs. Whether such use is permitted depends on individual decisions and the conditions attached to them.
The sanctions revision is based on Poland's existing list of countries.
The government project description states that the existing sanctions provisions are scattered across different laws, causing difficulties for enterprises to implement them. This proposal will integrate the division of responsibilities, information sharing, supervision, and penalties.
During the parliamentary debate on September 3, Deputy Minister of Interior Czeslaw Mroczek explained that Poland's current national system is based on a law enacted in April 2022, which targets support for Russia's aggression against Ukraine.
At that time, he stated that the list contained 554 entries: 119 enterprises and 435 individuals. Among them, 99 enterprises were related to Russian capital, and 20 were related to Belarusian capital.
Mroček said that the new legislation will enable national measures to address situations beyond Russia and Belarus. The government stated that the proposal aims to implement EU Directive 2024/1226, which deals with crimes and penalties related to violations of EU sanctions.
MiCA Licensing regulation remains another legislative controversy
Poland's attempts to establish a domestic cryptocurrency regulatory framework are proceeding along another parliamentary path. President Karol Nawroćyski vetoed the framework proposed by the government on June 11, which was his third veto of such a proposal; he stated his support for effective consumer protection but opposed the framework itself.
In September, the House of Representatives attempted to overturn the veto, but failed to pass with 241 votes in favor, 198 votes against, and 3 abstentions. To pass the bill again, 266 votes are required. The vetoed bill would have designated the Polish Financial Supervision Authority as the country's crypto regulatory agency.
In the United States, the Office of Foreign Assets Control (OFAC) of the Treasury Department has applied the same sanctions obligations to both digital currencies and traditional currencies. Its guidelines require individuals subject to U.S. judicial jurisdiction to freeze restricted assets held by sanctioned entities and to avoid prohibited transactions, including those intended to circumvent sanctions.
This article was written by Lawrence Mondal.
