Poland’s lower house of parliament, the Sejm, recently passed a bill that seeks to expand the nation’s sanctions framework by explicitly authorizing authorities to freeze crypto assets. Lawmakers approved the government-backed Act on Restrictive Measures with 240 votes in favor, 202 against, and one abstention. The legislation has now been forwarded to the Senate for further consideration.

Crypto assets included in sanctions framework

The proposed law specifically designates crypto assets as financial funds that may be subject to freezing when authorities impose sanctions. The definition of crypto assets in the bill aligns with standards set under the European Union’s Markets in Crypto-Assets Regulation (MiCA), a legislative framework that governs the issuance, trading, and custody of digital assets across the EU.

Mini dictionary: MiCA (Markets in Crypto-Assets Regulation) is a comprehensive regulatory framework adopted by the European Union to oversee digital asset markets, aiming to enhance investor protection and establish consistent rules for crypto assets across EU member states.

Once the bill is enacted, Polish authorities would be empowered to freeze virtual currencies and tokens, as well as traditional financial assets, during the enforcement of national or international sanctions.

Oversight and legal process

Poland’s Minister of the Interior will be responsible for overseeing the national sanctions list. Under the proposed law, any decision to add individuals or entities to the list would take effect the day after publication. Those who are included on the sanctions list may contest the decision before an administrative court, although enforcement begins before a final court ruling is issued.

Crypto assets, as defined under MiCA, will be treated as financial instruments subject to freezing under Poland’s updated sanctions framework, with immediate enforcement upon listing.

This mechanism aims to ensure that assets can be promptly frozen, reducing the risk of funds being withdrawn or concealed before court adjudication.

Expanded grounds for sanctions

Poland already operates a national sanctions system under a 2022 law introduced to counter support for Russia’s invasion of Ukraine. The new bill would broaden these regulations further, allowing sanctions to be imposed on individuals and organizations suspected of engaging in certain foreign interference activities and information manipulation that threaten Poland’s national security.

The expanded framework reflects ongoing concerns in the region about external influence and efforts to enhance financial transparency and state security.

Next legislative steps

The Senate now has 30 days to approve, amend, or reject the legislation. If no action is taken by the deadline, the Polish Constitution stipulates that the bill will be considered approved in the form adopted by the Sejm. At that point, the draft law will advance to President Andrzej Duda for final consideration and possible signature into law.

Sanctions-listing decisions will take effect the day after publication, and enforcement of asset freezes, including crypto, will commence immediately, even if the affected parties choose to challenge the measures in court.

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