EU fails to reach deal on lifting sanctions against Russian oligarchs

European Union countries failed on Monday to approve a compromise deal that would have removed Russian-Uzbek billionaire Alisher Usmanov and banking magnate Mikhail Fridman from the bloc's sanctions blacklist, in exchange for extending sanctions on nearly 3,000 other individuals and entities linked to Russia's war in Ukraine. Diplomats said a provisional agreement had been reached earlier, but final approval collapsed after Latvia lodged a last-minute objection. EU ambassadors are set to meet again on Tuesday morning in Brussels to try to finalize a deal before a deadline later that day.

What sparked the standoff

France and Slovakia had pushed for Usmanov's removal from the list, prompting Luxembourg to demand the same treatment for Fridman. French officials cited "national security" concerns regarding Usmanov without elaborating, though the Financial Times reported the request could be tied to a potential prisoner exchange deal with Azerbaijan. Luxembourg's push on Fridman comes as he is suing the country for 15 billion euros over the freezing of his assets under EU sanctions.

More hawkish member states, including Poland and the Baltic countries, strongly opposed easing the sanctions, arguing that pressure on Russia should instead be increased. In exchange for accepting the compromise, they secured an agreement to extend the overall sanctions regime for three years rather than the previous six-month renewal cycle.

Ukraine reacted sharply to the prospect of the two businessmen being delisted. Foreign Minister Andriy Sybiha called the move unacceptable, warning it would send the wrong signal to Moscow at a moment when pressure needs to increase rather than ease. EU foreign policy chief Kaja Kallas, speaking after a meeting of EU foreign ministers in New York, urged member states to maintain sanctions on Russia, describing them as a core tool for depriving Moscow of funding, and said she hoped talks on the sanctions rollover would conclude soon.

Usmanov and Fridman were added to the EU blacklist shortly after Russia's 2022 invasion of Ukraine over allegations their businesses generated significant revenue for the Kremlin. Both are among dozens of Russian businessmen who have sued the EU over the sanctions.