The rules of the European Union, enshrined in the 1992 Maastricht Treaty, ban restrictions on the movement of capital, but the measures by Cyprus have been endorsed by the European Central Bank and the unions executive arm, the European Commission, as essential to prevent money from fleeing the country.
Laws are great until they become inconvenient, so lets all just agree to ignore them. It's really what is best for everyone.... coming from who originally made those laws.