San Francisco Frontiers - EU in showdown over Russian oligarch sanctions as deadline looms

The 27-nation bloc had looked set to remove asset freezes and visa bans from Russian businessmen Alisher Usmanov and Mikhail Fridman after demands from France, Luxembourg and Slovakia.

The move -- slammed by Kyiv -- was part of a compromise to extend sanctions on almost 3,000 other individuals and companies over the Ukraine war for three more years, before a deadline that could see them lapse at 2200 GMT Tuesday.

But that agreement hit an obstacle at the finishing line when Latvia lodged a last-ditch objection late on Monday.

Ukrainian President Volodymyr Zelensky thanked Latvia for "keeping up the legal front against the war of aggression against Ukraine."

"Every crime against peaceful Ukrainians has a name. And as long as this war continues, these names must be on the sanctions lists," he wrote online.

EU ambassadors were set to resume talks at 1400 GMT to discuss their options as neither France nor Latvia gave any sign of blinking in their game of diplomatic chicken.

Officials insist there is widespread agreement that the bloc's sanctions should not be allowed to lapse -- and diplomats said Riga had floated a two-week extension if no deal is reached Tuesday.

EU countries have been haggling for days over a way forward after France joined Slovakia in demanding Russian-Uzbek billionaire Usmanov to be removed from the blacklist.

Luxembourg then seized upon the demand by Paris to insist that if sanctions were lifted on Usmanov, then they should be lifted for Fridman as well.

Officials in Paris have cited "national security" concerns for their request on Usmanov, but refused publicly to give details.

A senior diplomat in Brussels told AFP that Paris explained the demand was linked to a potential prisoner release deal involving French nationals held in Azerbaijan.

Luxembourg has pushed for Fridman to be removed. Diplomats said the move comes as he is suing the country for 15 billion euros ($17 billion) for freezing his assets under EU sanctions.

The demand from France in particular has riled other EU member states who argue that removing people for political reasons sets a dangerous precedent.

"It really sends the signal that you can blackmail your way to delisting," said one EU diplomat talking on condition of anonymity.

"It's shocking that France is the one blocking it all."

The Kremlin seized on the EU's standoff to say it backed taking Usmanov and Fridman off the blacklist, and the EU should lift sanctions on "all Russian businessmen".

- 'Need stability' -

As time ticked down, EU top diplomat Kaja Kallas urged the bloc's member states Monday to maintain the sanctions imposed on Moscow.

"Sanctions are a core pillar of our response to Russia's war", she told reporters Monday in New York after a meeting of EU foreign ministers.

"We need to have this stability."

As an offering to those opposed to the delisting move, the compromise deal on offer in Brussels would see the sanctions remain in place for the next three years -- as opposed to the previous extensions of six months each.

The EU's sanctions blacklist includes key figures such as Russian President Vladimir Putin and Foreign Minister Sergei Lavrov.

Metals tycoon Usmanov and banking magnate Fridman are among dozens of Russian businessmen suing the EU over the sanctions.

Both were added to the sanctions list shortly after Russia's invasion of Ukraine in 2022 over allegations that their businesses provided significant revenues to the Kremlin.

W.Thompson--SFF