EU Sanctions: Alisher Usmanov, Mikhail Fridman Delisted

• The European Union has extended its sanctions against Russia for three years.
• Alisher Usmanov and Mikhail Fridman were removed from the EU's sanctions list, sparking controversy.
• France reportedly sought Usmanov's delisting in exchange for the release of French prisoners from Azerbaijan.
• Luxembourg's request for Fridman's removal was linked to his legal fight to unfreeze $16 billion in assets.
• Ukrainian and Russian opposition leaders condemned the delistings, viewing them as a concession to Moscow.

This dynamic environment underscores why Russia sanctions compliance in Europe remains a critical and evolving challenge, requiring continuous vigilance and adaptation from all stakeholders.

The European Union has opted to prolong its extensive sanctions program against Russia for an additional three years, a move aimed at maintaining pressure following the 2022 invasion of Ukraine. This decision, however, was accompanied by a significant adjustment to the bloc's restrictive measures: the removal of two prominent Russian billionaires, Alisher Usmanov and Mikhail Fridman, from the sanctions list. While the EU's updated regime continues to target over 3,000 Russian individuals, entities, and companies, the delisting of Usmanov and Fridman has sparked considerable debate and concern among international observers.

Critics have voiced apprehension that this particular EU Russia sanctions update signals a potential weakening of European resolve. The decision to lift sanctions on Alisher Usmanov and Mikhail Fridman has been described by some as a concession to the national interests of certain member states, rather than a unified stance against Moscow. This development underscores the complex political dynamics influencing the EU sanctions list changes, particularly as compliance officers across Europe must now adjust their protocols regarding these previously sanctioned individuals.

The specific circumstances surrounding the removal of Alisher Usmanov and Mikhail Fridman from the EU's sanctions regime highlight the intricate diplomatic negotiations at play. Reports indicate that France actively pursued Usmanov’s delisting as part of a broader agreement with Azerbaijan. This arrangement reportedly facilitated the release of two French citizens, including an individual accused of espionage. Indeed, Azerbaijan’s President Ilham Aliyev confirmed the pardon of Martin Ryan, a Frenchman serving a decade-long sentence for allegedly spying on Azerbaijani military activities for France.

Concurrently, Luxembourg reportedly advocated for Mikhail Fridman’s removal, a request linked to his ongoing legal efforts to unfreeze approximately $16 billion in assets held within the Grand Duchy. The unanimous agreement required from all 27 EU governments for the sanctions extension faced a critical deadline. Latvian Prime Minister Andris Kulbergs initially opposed the delistings but ultimately agreed to a compromise: extending the sanctions for three years instead of the previous six-month renewal cycle. This agreement also included a commitment from French President Emmanuel Macron to initiate discussions on extending France's nuclear umbrella over Latvia and providing assistance with air defense. Latvian MEP Rihards Kols critically observed that such incidents create a "tested method" for authoritarian regimes, suggesting they can detain European citizens to pressure capitals and make EU policy negotiable, warning that "Pandora’s box, once opened, does not close on request."

The decision to lift sanctions on Alisher Usmanov and Mikhail Fridman has drawn sharp condemnation from Ukrainian officials and exiled Russian opposition leaders. Ukrainian President Volodymyr Zelenskyy characterized the move as "suicidal and counterproductive," emphasizing that each individual on the sanctions list represents a reason for the ongoing conflict and its human cost. Ukrainian Foreign Minister Andriy Sybiga asserted that Moscow would view the delistings as a victory, fostering a sense of impunity and highlighting perceived divisions within the EU. Lyubov Sobol, an ally of the late Russian opposition leader Alexei Navalny, echoed these sentiments, labeling it a "serious geopolitical victory for Putin."

Further complicating the matter, European leaders reportedly faced pressure from Turkish President Recep Tayyip Erdoğan and other Turkic leaders concerning Usmanov's sanctions status. Since Russia's full-scale invasion in February 2022, the EU has implemented 21 packages of sanctions, targeting key figures like President Vladimir Putin and Foreign Minister Sergey Lavrov, along with Russian banks, businessmen, energy supplies, weapons manufacturers, cargo vessels, and media outlets. While these measures have impacted Russia's economy, Moscow has also employed various methods, including shell companies and cryptocurrencies, to circumvent them. This dynamic environment underscores why Russia sanctions compliance in Europe remains a critical and evolving challenge, requiring continuous vigilance and adaptation from all stakeholders.

Compliance officers must update sanctions screening protocols for Alisher Usmanov and Mikhail Fridman, as their removal from the EU's Russia sanctions list impacts due diligence and potential business dealings. This also highlights the dynamic and politically influenced nature of sanctions regimes, requiring continuous monitoring for clients operating in this space.

Source: Original reporting via Associated Press