EU sanctions removal: oligarchs Alisher Usmanov and Mikhail Fridman

Why were Alisher Usmanov and Mikhail Fridman removed from the EU sanctions list?

The removal of Alisher Usmanov and Mikhail Fridman stems from specific diplomatic pressures and legal challenges raised by individual EU member states. France led the campaign for the removal of billionaire Alisher Usmanov, citing concerns regarding national security. Reports suggest that France's initiative may have been linked to potential negotiations concerning a prospective prisoner release deal involving Azerbaijan.

Mikhail Fridman, a Russian-Israeli businessman, was supported for removal by Luxembourg. This support follows legal proceedings initiated by Fridman, who is currently suing Luxembourg for the release of his frozen assets. The decision to lift these specific sanctions represents a shift in the EU's unified front against the individuals identified as enablers of the Russian leadership.

The decision highlights how individual member state interests—ranging from legal disputes in Luxembourg to potential mediation roles in Azerbaijan for France—can influence the collective sanctions regime of the bloc. This shift has left the question of how the EU maintains a monolithic stance against Russian influence unsettled, as individual priorities appear to take precedence in specific diplomatic contexts.

Profiles of the removed oligarchs

Alisher Usmanov, the founder of the USM Holding investment group, holds extensive interests in copper, steel, and iron suppliers, as well as the Megafon telecommunications company. He has previously maintained high-profile ties with English Premier League clubs, including Arsenal and Everton. The EU had originally frozen his assets in 2022, labeling him a pro-Kremlin figure with close ties to President Vladimir Putin. Usmanov has characterized the sanctions as unfair.

Mikhail Fridman is the founder of the Alfa Group investment conglomerate, which maintains significant holdings in the energy and banking sectors. Although Fridman expressed a desire for the conflict in Ukraine to end quickly at the start of the full-scale invasion, he stopped short of explicitly condemning President Putin. The EU had previously classified him as a top financier within Putin's inner circle.

The profiles of these two men illustrate the complexity of the EU's targeting strategy. While Usmanov is described as having particularly close ties to the Russian presidency, Fridman's position as a top financier and enabler of the inner circle was the basis for his inclusion. Their removal marks a significant reversal for two individuals whom the EU had previously identified as central to the Russian economic and political apparatus.

How did the EU reach a compromise regarding the sanctions regime?

The EU reached a compromise to prevent a total veto of the sanctions package, primarily by altering the duration of existing restrictions. Latvia initially opposed the removal of the two oligarchs, leading to a veto by EU ambassadors on Monday. However, the bloc moved toward a consensus on Tuesday when Latvia shifted its position to an abstention following the negotiation of a new regulatory framework.

The core of this compromise involves a significant change in how sanctions are renewed. Previously, the EU was required to renew sanctions on listed individuals and entities every six months. Under the new agreement, sanctions on approximately 2,600 other individuals and entities will now be extended for a period of three years. This shift provides greater administrative stability for the sanctions regime while allowing for the specific removals requested by France and Luxembourg.

The negotiation process reveals the friction inherent in EU decision-making. Latvia's initial veto was influenced by the fact that his Russian-Latvian business partner, Pyotr Aven, had been stripped of Latvia's highest civilian honour in 2022 for failing to condemn the invasion. The eventual compromise—extending the term of sanctions for nearly 3,000 other entities (with 2,600 specifically cited in the deal) to three years—served as the mechanism to break the deadlock. This change from a six-month cycle to a three-year cycle represents a fundamental shift in the operational tempo of EU sanctions.

What is the reaction from Ukraine and the Kremlin?

Ukrainian officials have expressed profound anger, describing the decision as unacceptable and a sign of weakness. Foreign Minister Andriy Sybiha stated on X that the move sends a damaging signal to Moscow, suggesting that the Kremlin will interpret the decision as a victory. According to Sybiha, the removal of these names provides Moscow with a sense of impunity and highlights divisions among European nations.

In response to the EU's decision, Sybiha urged member states to implement their own national sanctions against Usmanov and Fridman. Latvia has already indicated its intention to follow this course. Conversely, the Kremlin has welcomed the development. Kremlin spokesperson Dmitry Peskov stated that the EU's original sanctions were illegal and argued that all Russians should be removed from such lists.

The reactions demonstrate a widening gap between the EU's diplomatic maneuvering and the perceptions of those directly affected by the conflict. While the EU seeks compromise to maintain its broader sanctions framework, Ukraine views the specific removals as a humiliation of the bloc and a victory for Moscow. The Kremlin's response, framing the sanctions as inherently illegal, further underscores the ideological divide that the EU's compromise has failed to bridge.

What are the broader geopolitical implications for EU member states?

Beyond the immediate sanctions debate, the diplomatic shifts are influencing security arrangements within Europe. The negotiations involving Latvia have extended into military and defense cooperation. Latvian Prime Minister Andris Kulbergs noted that as part of the broader diplomatic context, France has agreed to enter discussions with Latvia regarding participation in a French nuclear deterrence initiative.

This development also includes a commitment to strengthen France's military presence within Latvian territory. This suggests that while the EU is showing flexibility on specific individual sanctions, it is simultaneously attempting to bolster its collective security posture in Eastern Europe through bilateral military agreements.

The interplay between the sanctions compromise and the new security commitments suggests a dual-track approach to European stability. On one hand, there is a move toward administrative efficiency and diplomatic flexibility regarding individual sanctions; on the other, there is a hardening of military ties between major powers like France and frontline states like Latvia. This tension between economic/diplomatic compromise and military reinforcement remains a defining feature of the current geopolitical landscape.

FAQ: EU sanctions on Russian oligarchs

Why did Latvia change its vote from a veto to an abstention?

Latvia changed its vote to an abstention as part of a broader compromise reached within the EU. While the country initially opposed the removal of the two oligarchs, it agreed to the deal because it included an extension of sanctions on 2,600 other entities for three years instead of the previous six-month renewal cycle.

What is the link between France and Azerbaijan in this context?

Reports indicate that France's initiative to remove Alisher Usmanov from the sanctions list was potentially connected to diplomatic negotiations regarding a prospective prisoner release deal involving Azerbaijan. This suggests that individual EU member states may use sanctions policy as leverage in broader international mediation efforts.

How does the new sanctions renewal process work?

The new agreement moves away from the previous requirement of renewing sanctions every six months. Instead, the EU has agreed to extend the sanctions on nearly 2,600 individuals and entities for a three-year period. This change was a key component of the compromise that allowed the sanctions package to proceed.

What were the original reasons for sanctioning Usmanov and Fridman?

The EU originally sanctioned Alisher Usmanov due to his described close ties to Vladimir Putin and his role as a pro-Kremlin oligarch. Mikhail Fridman was sanctioned because the EU identified him as a top financier and enabler of the inner circle surrounding the Russian presidency.

Will Latvia still penalize the removed oligarchs?

Yes, Latvia has announced that it intends to move forward with national sanctions against the two individuals despite the EU-level decision. This move follows the call from Ukrainian Foreign Minister Andriy Sybiha for member states to implement independent sanctions to maintain pressure on the individuals.