CRYPTO-MECHANISMS OF SANCTIONS EVASION AS A CHALLENGE TO THE INTERNATIONAL AML/CFT ARCHITECTURE: THE A7A5 CASE STUDY AND UKRAINE’S INITIATIVE FOR A NEW EU REGULATORY INSTRUMENT
DOI:
https://doi.org/10.32689/2617-9660-2026-1(37)-58-65Keywords:
anti-money laundering, sanctions circumvention, cryptocurrency regulation, stablecoin, MiCA, FATF Recommendation 15, MONEYVAL, EU sanctions autonomy, «de lege ferenda»Abstract
Purpose. This article examines the structural deficiencies of the European Union’s anti-money laundering and counter-terrorist financing (AML/CFT) regulatory architecture through the lens of «the A7A5 crypto-sanctions evasion scheme», which processed $93.3 billion in transactions within ten months. The purpose is to identify systemic legal gaps in the existing framework and to develop concrete «de lege ferenda» proposals for an autonomous EU sanctions instrument. Methods. The study employs a combination of comparative legal analysis (EU and US regulatory frameworks), case-study methodology («the A7A5 scheme» based on the Chainalysis 2026 Crypto Crime Report), and institutional design analysis (MONEYVAL, PACE, and European Commission decision-making procedures). The research draws on primary sources, including EU regulations (MiCA, AMLAR, TFEU), FATF standards, and enforcement data from OFAC and EU Council implementing regulations. Results. Five systemic legal gaps are identified: jurisdictional inaccessibility, absence of MiCA extraterritoriality, the unanimity requirement under Article 215 TFEU, strategic dependence on OFAC, and ‘grey jurisdictions’ beyond FATF reach. Five de lege ferenda measures are proposed: ‘Euro-Section 311’ (autonomous designation mechanism), ‘Euro-Correspondent Control’ (extraterritorial sanctions screening), MONEYVAL thematic review, PACE resolution, and extension of KYC/CDD obligations to technical intermediaries under FATF R.15/R.16. A four-phase institutional roadmap (MONEYVAL – PACE – European Commission) is developed. Conclusions. «The A7A5 case» confirms the architectural incapacity of the current EU AML/CFT system to counter industrial-scale crypto-sanctions evasion. Ukraine, leveraging its MONEYVAL membership, leadership of the ‘Proceeds and Conflicts’ project, and EU candidate status, possesses unique legal standing to initiate the proposed reforms within a 14–18-month horizon.
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