The Price of Two Oligarchs: Europe’s Curious Sanctions Compromise
By Matthew Parish
Thursday 24 September 2026
Something peculiar has happened to the European Union’s sanctions policy towards Russia. On 22 September 2026, the Council of the European Union renewed for three years the restrictive measures imposed upon more than 3,000 individuals and entities considered responsible for undermining or threatening Ukraine’s territorial integrity, sovereignty and independence. At the same time, however, two particularly prominent names disappeared from the list: the Russian-Uzbek billionaire Alisher Usmanov and the Russian businessman Mikhail Fridman. The decision has produced anger in Kyiv and unease in a number of European capitals.
At first sight, this looks like an extraordinary contradiction. The European Union maintains that the pressure upon Russia must continue and indeed its formal decision of 22 September states that so long as Russia continues to violate fundamental rules of international law, the sanctions should remain in force and additional measures should be taken if necessary. Yet two of the most famous businessmen subjected to those measures since the beginning of the full-scale invasion have simultaneously been released from them.
The explanation lies less in any sudden reassessment of Russia than in the peculiar machinery of European foreign policy. Sanctions of this kind require unanimity among the EU member states. Until now the individual listings had generally been renewed every six months. This created repeated opportunities for individual governments to threaten the entire sanctions architecture unless particular demands were accommodated. The September 2026 negotiations demonstrated the weakness of this arrangement with unusual clarity.
France pushed for Usmanov’s removal. Luxembourg pressed for Fridman’s. Slovakia had also advocated removing the two businessmen. Latvia resisted the compromise almost until the end, before abstaining and thereby permitting it to proceed. The eventual bargain was stark: Usmanov and Fridman would leave the list, while sanctions against the remaining thousands of individuals and entities would be secured not merely for another six months but for three years.
There is therefore a respectable argument that this was an exercise in European Realpolitik rather than capitulation. Two names were sacrificed to secure several thousand others for 36 months. The new arrangement substantially reduces the opportunities for member states periodically to hold the sanctions regime hostage during six-monthly renewal negotiations. From this perspective, the relevant calculation is not whether Usmanov and Fridman individually deserved sanctions but whether their continued designation was worth jeopardising the entire structure.
That argument deserves to be taken seriously. Sanctions are instruments of foreign policy, not criminal convictions. The Council itself describes EU sanctions as targeted, proportionate and temporary measures subject to review and calibration. Their purpose is not principally to punish objectionable people. In the Russian context their declared strategic objectives include weakening Russia’s economic capacity to wage war, restricting its energy revenues, depriving it of critical technologies and markets and targeting its military-industrial complex. If surrendering two individual designations makes the remaining sanctions significantly more durable, a conventional cost-benefit analysis might regard the bargain as rational.
There is also an important rule-of-law question that can sometimes disappear from political discussions of Russian oligarchs. An individual sanctions regime cannot properly operate upon the assumption that once somebody has been designated he must remain sanctioned indefinitely. Listings must continue to satisfy the applicable legal criteria and they must remain capable of surviving judicial scrutiny. Otherwise sanctions cease to be restrictive measures governed by law and become indefinite administrative punishments imposed according to political reputation.
That principle applies even to exceptionally wealthy Russians and even during a war. Indeed it matters precisely in difficult cases. European institutions regularly present adherence to law as one of the distinctions between European government and the arbitrary exercise of state power characteristic of authoritarian systems. A sanctions policy that never permits delisting, regardless of changed circumstances or evidential weakness, would sit uneasily with that claim.
The difficulty is that the political history of these particular delistings makes such a principled explanation considerably harder to sustain.
Usmanov’s case became entangled with an apparently quite different dispute between France and Azerbaijan. Reuters reported, citing European diplomats, that France privately told its partners that Azerbaijan was using the Usmanov sanctions question as leverage concerning French citizens detained in Azerbaijan. Azerbaijan rejected the suggestion that it had engaged in such blackmail. On 23 September Azerbaijani President Ilham Aliyev pardoned one French national imprisoned for espionage, which France described as a humanitarian gesture.
Whatever precisely occurred in those negotiations, the appearance is politically uncomfortable. A European sanctions designation connected with Russia’s invasion of Ukraine became part of diplomatic bargaining involving France, Azerbaijan and detained French citizens. The substantive question of whether Usmanov continued to satisfy the criteria for sanctions thereby became entangled with interests having little obvious connection with Ukraine.
Fridman’s case followed another route. He has pursued a claim reportedly worth approximately $16 billion against Luxembourg arising from the treatment of his assets, and Luxembourg pressed for his removal once France demanded Usmanov’s. Again, this creates an awkward appearance. If sanctions are lifted because the underlying designation can no longer legally or factually be sustained, the system is functioning as it should. If they are lifted because maintaining them has become diplomatically, financially or legally inconvenient to a particular member state, the integrity of the sanctions architecture becomes harder to explain.
This distinction matters enormously. The effectiveness of sanctions depends partly upon their predictability. A Russian businessman deciding whether continued association with the Kremlin carries long-term economic consequences must believe that sanctions cannot readily be removed through unrelated political leverage. If sufficiently powerful individuals can persuade third countries or individual EU governments to make their cases bargaining chips in wider negotiations, the incentives created by sanctions change.
This is the strongest element of the Ukrainian objection. Ukrainian Foreign Minister Andrii Sybiha described the delistings as “shameful and unjustifiable”, while Ukrainian officials questioned whether removing two figures of such prominence was worth the bargain. Estonia and Latvia likewise expressed concern about the signal the decision might send. These are political judgements rather than established facts, but the underlying institutional problem is real: once exceptions become negotiable, every future designation potentially acquires a diplomatic price.
There is nevertheless another side to the ledger. The EU has not dismantled its Russia sanctions regime. Quite the opposite occurred in numerical and temporal terms. More than 3,000 individual and entity listings have been prolonged until 22 September 2029. The formal Council decision explicitly states that the Union remains committed to increasing pressure upon Russia and weakening its war economy. Describing the September compromise simply as the abandonment of sanctions therefore misses most of what actually happened.
The three-year extension may ultimately prove more strategically significant than the removal of two oligarchs. Six-month renewals created recurrent moments of vulnerability. Every renewal required another unanimous agreement among 27 governments whose interests, domestic politics and relationships with Moscow vary considerably. Any one of them could use the approaching expiry as leverage. Moving to a 36-month cycle substantially changes that dynamic.
In that sense, the September confrontation exposed a structural weakness and simultaneously produced a partial remedy for it. France demonstrated how much leverage a large member state could exercise when sanctions were approaching expiry. Latvia demonstrated how a smaller member state could use precisely the same unanimity requirement to resist. The eventual three-year settlement reduces the frequency with which either manoeuvre can be repeated.
Yet the political cost cannot simply be measured in numbers. Usmanov and Fridman are not obscure names buried on a spreadsheet containing thousands of sanctioned persons. Their prominence gives their removal symbolic significance far beyond the direct economic consequences. Sanctions operate partly through material restrictions and partly through signalling. They tell Russia’s wealthy business class that proximity to the political and economic structures surrounding the Kremlin carries consequences abroad. Removing prominent individuals for reasons perceived as extraneous to the original sanctions criteria risks muddying that message.
There is also a potentially troublesome lesson for third countries. If the perception takes hold that pressure upon an EU member state can produce concessions concerning Russian sanctions, then sanctions policy may become entangled in disputes having nothing to do with Russia. Governments confronting European states over prisoners, trade, migration, energy or security may be encouraged to search for Russian interests that can be inserted into the negotiations. Whether Azerbaijan actually behaved in this way is disputed, but the precedent may matter independently of the truth of that particular allegation.
This illustrates a broader problem with personalised sanctions. Freezing the assets of identifiable billionaires is politically attractive because it provides visible targets. Yet the relationship between oligarchic wealth and Kremlin policy is not always straightforward. Russia’s contemporary political economy is not simply a boardroom in which a handful of billionaires collectively decide national strategy. Vladimir Putin’s system has progressively subordinated major private fortunes to political authority. Some wealthy Russians possess influence, but they also depend upon the state for the continued security of their property and position.
Sanctioning oligarchs therefore serves several overlapping purposes. It can prevent wealth connected with the Russian political system from enjoying unrestricted access to European markets. It can impose costs upon elites associated with the state. It can create incentives for wealthy Russians to distance themselves from government policy. It can also express political condemnation. These objectives are not identical and occasionally they conflict.
If the purpose is to change behaviour, there must logically be some route out of sanctions. Otherwise the incentive disappears. A businessman who knows that nothing he does will ever result in delisting has little sanctions-related reason to change his conduct. A credible sanctions system therefore requires both a meaningful threat of designation and a meaningful possibility of removal where the legal and policy justification no longer exists.
The controversy over Usmanov and Fridman is that it is difficult to see the September bargain purely through that lens. The public reporting instead describes a negotiation involving French national-security concerns, Azerbaijan, Luxembourg’s exposure to an enormous legal claim, Slovak demands and Latvian resistance. That is diplomacy in its most traditional form: competing national interests being traded until unanimity becomes possible.
Perhaps it was inevitable. The European Union is not a unitary state and its foreign policy remains an accommodation between 27 governments. France has French interests, Luxembourg has Luxembourgish interests, Latvia has Latvian interests and Ukraine, which is not yet a member of the Union, has Ukrainian interests. The remarkable feature of European policy since February 2022 has arguably been not that these interests occasionally diverge but that such different states have maintained such an extensive sanctions architecture for so long.
The episode nevertheless provides a warning about what may come next. As the war continues and its economic, political and diplomatic consequences accumulate, sanctions will increasingly become bargaining instruments. Individual states will discover reasons why particular listings inconvenience them. Sanctioned Russians will continue challenging designations before European courts and seeking political routes to delisting. Governments outside the EU will discover that relationships with Russian businessmen can sometimes provide leverage in their dealings with European capitals.
Europe will consequently have to decide more clearly what individual sanctions are for. If they are legal measures based upon defined criteria, then listings and delistings ought principally to turn upon whether those criteria are satisfied. If they are bargaining instruments, then political trades are inevitable. Trying to maintain both propositions simultaneously risks undermining the credibility of the system.
The September compromise contains elements that can support either interpretation. Europe removed two extremely prominent businessmen in circumstances surrounded by national political bargaining. Yet it also secured the overwhelming remainder of its individual sanctions architecture for three years, a considerably longer period than before. The immediate material balance is therefore not simply one of relaxation: two significant restrictions disappeared while thousands became considerably more secure.
For Ukraine, however, symbolism is hardly an incidental consideration. Ukrainians are fighting a war in which European sanctions are intended to form one component of the pressure upon the Russian state and the economic networks surrounding it. Kyiv naturally has an interest in ensuring that those measures are not diluted through negotiations over unrelated European national interests. The anger expressed by Ukrainian officials is therefore readily understandable even if other European governments regarded the three-year renewal as the more important strategic prize.
The real test will come with the next oligarch. If Usmanov and Fridman prove exceptional cases produced by an unusually difficult renewal negotiation, then the controversy may eventually appear as the price of securing a stronger and more durable sanctions settlement. If their removal instead establishes that sufficiently wealthy sanctioned Russians can assemble diplomatic pressure through individual member states and obtain bespoke political bargains, then September 2026 may be remembered rather differently.
Sanctions derive much of their power from the belief that they will endure until the circumstances that justified them materially change. Once their targets believe instead that everything has a price, the question ceases to be how to alter one’s conduct and becomes how to find somebody willing to negotiate the price. That is the political danger exposed by the curious affair of Europe’s two oligarchs.
