Luxembourg’s decision to delist Russian oligarch Mikhail Fridman from EU sanctions has drawn sharp criticism from lawmakers and analysts, who warn the move risks undermining the bloc’s united stance against Moscow.
The controversy erupted after Luxembourg, alongside France and Slovakia, successfully pressured the EU to remove Fridman and Alisher Usmanov from the sanctions list in September. The three countries threatened to block the renewal of all 3,000 EU Russia-related sanctions unless the delistings were approved. Luxembourg Prime Minister Luc Frieden defended the decision in parliament on October 12, citing a potential €16 billion arbitration claim by Fridman against the country as the primary justification.
However, lawmakers Franz Fayot of the Social Democrats and Sam Tanson of the Green Party dismissed Frieden’s reasoning as flawed. According to their account, Frieden suggested that delisting Fridman might persuade him to drop the arbitration case—a gambit that has so far failed. The oligarch’s legal team has not withdrawn the claim, and Luxembourg’s leading newspaper, Luxemburger Wort, reported no direct contact between the government and Fridman’s representatives.
Tanson warned that Luxembourg’s approach ‘appears willing to weaken the EU sanctions regime in response to a potentially enormous financial liability without having established that delisting would eliminate it.’ The move could even backfire in arbitration, Fayot added, potentially strengthening Fridman’s case by implying Luxembourg had influence over the sanctions process.
The EU’s ‘no-claims clause’—a provision in sanctions regulations stating that member states are not obligated to compensate sanctioned individuals if sanctions prevent contract fulfilment—was cited by a European Commission spokesperson as a safeguard. Yet Frieden reportedly claimed there was ‘no solidarity at EU level for any damage,’ suggesting Luxembourg might face the financial burden alone. When pressed on EU protections, Frieden admitted he was unaware of such rules.
Critics argue the delisting sets a dangerous precedent. Fayot fears other oligarchs may exploit similar tactics, while Tanson called the move ‘a signal to Russia that EU unity is fragile’ and to Ukraine that European support may be unreliable. The Luxembourg government’s Bilateral Investment Treaty (BIT) with Russia was also cited as a potential legal basis for enforcing arbitration rulings, though EU-wide discussions on terminating such treaties remain stalled.
The fallout highlights Luxembourg’s delicate balancing act between national financial interests and EU-wide sanctions cohesion. With smaller member states particularly vulnerable to legal pressure, the episode raises broader questions about the resilience of the sanctions framework.