EU reaches agreement on sanctioning Russian oligarchs

After weeks of difficult negotiations, EU member states on Saturday reached a last-minute agreement to extend sanctions against Russia after a compromise was reached over sanctioning two Russian oligarchs.

The agreement will leave prominent Russian oligarchs Alisher Usmanov and Mikhail Fridman subject to punitive measures for now, despite demands from Slovakia and Hungary to remove them from the list.

In addition, sanctions against two individuals will not be renewed, the member states said, saying there was only very weak evidence of the two’s support for Russia’s war against Ukraine. Their names have not yet been disclosed.

EU sanctions typically include travel restrictions, asset freezes, and a prohibition on making funds or other economic resources available. In most cases, sanctions were imposed in response to what the EU views as Russia’s unjustified and unprovoked war against Ukraine, which Moscow started more than four years ago.

Those affected include numerous Russian politicians and senior officials, as well as a number of businesspeople with commercial activities in the EU. The latter group is being hit particularly hard by the measures.

Without Saturday’s renewal decision, the sanctions would have expired on Sunday.

EU decision carries risks

An intense debate raged right up to the last minute over the demands made by Slovakia and Hungary, as EU members were unwilling to accept their demands.

The risk was that lifting the sanctions could provide other Russians with grounds for further legal challenges against punitive measures.

Meanwhile, a package of new sanctions against Russia remains blocked.

Hungary will only agree to it once a dispute over interrupted Russian oil supplies via the Druzhba pipeline has been resolved. Prime Minister Viktor Orbán’s government accuses Ukraine of preventing the pipeline from resuming operations, while Ukraine says Russia damaged the pipeline, which runs from Russia via Belarus and Ukraine to Hungary and Slovakia.

Turkey stood up for Usmanov

The exact reasons for Slovakia and Hungary backing Fridman and Usmanov remained unclear. However, Slovak Foreign Minister Juraj Blanár confirmed on Thursday that Slovakia had advocated on behalf of the two oligarchs.

Radio Free Europe reported Slovak Prime Minister Robert Fico forwarded a letter from Turkish President Recep Tayyip Erdoğan that urged support particularly for Usmanov, citing his role in fostering ties between Turkic states and the West.

Fridman took legal action against sanctions

For Fridman, who also holds Israeli citizenship, intense lobbying and a ruling by the EU General Court are likely to have played a role.

In 2024, the court overturned EU sanctions decisions against Fridman on the grounds that there was not sufficient evidence for his inclusion on the sanctions list in decisions made between February 2022 and March 2023.

Still that did not mean that Fridman was removed from the EU sanctions list because the EU Council had already issued updated sanctions decisions against him at the time of the ruling.

Usmanov and Fridman ties to Putin

The sanctions resolution against Usmanov had previously stated that he was a Kremlin-friendly oligarch “who maintains particularly close ties to Russian President Vladimir Putin” and is regarded as one of Putin’s particular favourites.

Usmanov is known in Germany because the Munich Public Prosecutor’s Office was investigating him on suspicion of two breaches of the Foreign Trade Act and possible sanctions violations. The case was only dropped last year following the payment of a fine of €10 million ($11.5 million).

According to investigators, Usmanov was suspected of having paid around €1.5 million euros via companies based abroad between April and September 2022 for the surveillance of two properties on Lake Tegernsee. He is also alleged to have failed to declare various valuables, such as jewellery, paintings and wines, to the relevant authorities.

EU: Fridman benefited from Putin

Until recently, Fridman was also listed in EU documents as a businessman with close ties to Putin and a supporter of Putin’s inner circle.

According to the latest sanctions decision, his connections to the government enabled him to acquire state assets, and Putin rewarded the Alfa Group’s loyalty, a company he is connected to, with political support for the group’s foreign investment plans.

The EU says Fridman is the founder and one of the shareholders of the Alfa Group, which owns Russia’s leading bank, Alfa Bank.