NextFin News - The European Union's sanctions regime against Russia survived nearly five years of war but nearly collapsed in 48 hours — not because of pressure from Moscow, but because two of its own members turned the bloc's unanimity rule into a bargaining chip. In the final days before the EU's blacklist of nearly 3,000 Russian individuals and entities was due to expire at midnight on September 15, France and Luxembourg each pulled a veto lever to extract national concessions, forcing a one-week emergency extension and, within days, a deal that erased two oligarchs from the list in exchange for keeping the rest.
The episode is being read across European capitals as the moment the sanctions architecture stopped being a weapon aimed solely at the Kremlin and became an instrument any member state could wield against the others. The immediate crisis passed. The precedent did not.
The 48-Hour Cliffhanger
The sequence reads like a diplomatic thriller but exposes a structural fault line. On September 11, France unexpectedly joined Slovakia in demanding the removal of Russian-Uzbek billionaire Alisher Usmanov from the EU sanctions list, blocking the routine six-month renewal of individual restrictive measures. The regime, covering nearly 3,000 people and entities with asset freezes and travel bans, was due to lapse at midnight on September 15 — which would have left the EU without a single named-sanctions tool against Russia's war economy.
With unanimity among all 27 member states required and no agreement in sight, the Committee of Permanent Representatives granted only a temporary seven-day reprieve, pushing the deadline to September 22. The intervention by Paris caused particular bewilderment in Brussels: France has long ranked among the strongest advocates of tighter pressure on Moscow. Its sudden alignment with Slovakia — a government more often associated with resistance to sanctions — marked a sharp departure and injected fresh uncertainty into the bloc's ability to hold a unified front.
On September 18, Luxembourg raised the stakes further, telling a meeting of EU ambassadors that if France succeeded in delisting Usmanov, Mikhail Fridman should be removed as well. Five days after the original deadline, on September 21, EU envoys reached a provisional agreement: Usmanov and Fridman would both come off the list, while restrictions on the remaining roughly 3,000 individuals and entities would be extended for 36 months — six times the usual six-month cycle and three times the 12-month renewal that had been on the table. Latvia was reported to be the sole country still withholding approval late that evening.
"Not the time to shield Russian oligarchs," Ukrainian President Volodymyr Zelensky said as the delay became public, warning against steps that would amount to rescuing Russian businessmen while Russian attacks on Ukrainian civilian targets continued.
Two Veto Levers, Two Very Different Motives
France's calculus was geopolitical in the narrowest sense. Paris framed its push to delist Usmanov as a form of "political compromise," and reporting linked the move to efforts to secure the release of two French nationals held in Azerbaijan — a country that has previously lobbied for Usmanov's removal. France declined to confirm details of any such arrangement while insisting it remained fully committed to increasing pressure on Russia's war machine.
Luxembourg's position was colder and, in its way, more damaging to the regime's credibility. The Grand Duchy's demand was not about friendship with Fridman. It was about legal risk. After Fridman was sanctioned in 2022, Luxembourg froze holdings he had parked there through Alfa Group and LetterOne. He then sued the Grand Duchy under a 1989 Belgium-Luxembourg-Soviet investment treaty, seeking on the order of $16 billion in compensation for the freeze. Luxembourg's logic was one of consistency: if the EU accepts that a sanctioned oligarch can be delisted under political pressure, the legal foundation for freezing his assets grows shakier still.
The geography of frozen assets helps explain who holds the leverage. Euroclear in Belgium holds roughly €183 billion of immobilised Russian central bank funds; France holds approximately €19 billion; and Luxembourg holds between €5 billion and €20 billion, with European Parliament research citing about €10 billion. The states that physically host the money are the states with the most to lose — and therefore the most incentive to shape the rules.
There is also a legal precedent that made the delisting route look viable. On April 10, 2024, the EU General Court annulled Fridman's inclusion on the sanctions list, ruling that the Council had not provided a sufficiently solid factual basis for the allegations against him. The Council promptly reimposed sanctions on new grounds, but the episode showed that a sanctioned oligarch can beat the EU in its own courts — raising the political cost of keeping any name listed for any capital that hosts his assets.
The Unanimity Trap
Here lies the mechanism that turned a routine administrative renewal into a hostage situation. Individual EU sanctions require unanimous approval of all 27 member states and must be renewed every six months. If unanimity is not reached, the entire list lapses. That design gives every member state, twice a year, a veto over the whole regime — a veto that can be used not to defend a position on Russia, but to extract an unrelated concession.
Until this episode, the veto threat was associated with the bloc's predictable dissenters: Hungary and Slovakia. Their resistance was a known variable, priced into every renewal cycle. What changed in September is that the lever moved from the periphery to the core. When a founding member and sanctions hawk like France uses the same mechanism for a prisoner-exchange negotiation, the deterrent value of the veto evaporates. Every capital now knows the playbook works.
The EU has tried to insulate parts of the architecture from this problem. In December 2025, Brussels triggered Article 122 of the Treaty on the Functioning of the European Union to freeze Russian central bank assets indefinitely, removing them from the six-month renewal cycle — a direct response to Belgium's refusal, at the October 2025 summit, to back a €140 billion reparations loan to Ukraine until other asset-holding states shared the litigation risk. That fix works for immobilised assets. It does not exist for the individual sanctions list, which remains exposed to the twice-yearly cliffhanger even after the 36-month extension runs its course in September 2029.
The asymmetry is stark. The bloc found an emergency legal tool to protect roughly €210 billion of central bank reserves from a Hungarian veto, but it has no equivalent protection for a sanctions list whose credibility depends on the perception that it cannot be picked apart name by name. The message to any future holdout is that the price of a veto is simply the size of the concession demanded.
The Real Stakes: Enforcement, Not Names
It would be a mistake to measure the damage only by two oligarchs. The individual blacklist is the visible layer; the economic teeth are the sectoral measures — the G7 oil price cap, the bans on maritime services, and the shadow-fleet listings. And here the contradiction is sharpest.
France has been among the most aggressive enforcers at sea. In January 2026, the French navy intercepted the GRINCH, a tanker suspected of belonging to Russia's shadow fleet, in the Mediterranean and diverted it to Marseille; President Emmanuel Macron suggested the oil carried by shadow-fleet tankers be confiscated and sold. The vessel was released in February after a multimillion-euro penalty — a reminder that enforcement produces outcomes only when the legal regime behind it is stable and credible.
The enforcement gap is measurable. The European Commission's 20th sanctions package, adopted in April 2026 after Slovakia and Hungary dropped their opposition, established the legal basis for a future full ban on offering maritime services to buyers of Russian crude — effectively replacing the G7 price cap, which has been enforced with mixed success. The package added 46 vessels to the shadow-fleet list, taking the total to 632, and imposed a ban on direct and indirect tanker sales to Russian entities. Yet the architecture still depends on member states to police it.
And policing is precisely what is missing. In July 2026, 53 percent of Russia's seaborne oil was transported by shadow tankers already under sanctions, the Centre for Research on Energy and Clean Air found. Full enforcement of the $44.1 per barrel crude cap and the relevant product caps would have reduced Russia's oil export revenues by roughly 17 percent — about €2.2 billion in that month alone. In August, the figure was about 15 percent, or €1.7 billion. The gap between the policy on paper and the revenue actually denied to Moscow is the measure of the enforcement deficit.
The state most willing to enforce at sea became the state most willing to compromise the legal regime on land. That is the wound: not the delistings themselves, but the demonstration that the regime's guardians can be bought off with side deals.
Cyclical Setback or Structural Break?
The immediate counter-argument is that the regime emerged stronger, not weaker. The 36-month extension is unprecedented, and it locks in restrictions on roughly 3,000 names well beyond the next renewal cliffhanger. From this vantage point, Brussels traded two names for three years of certainty, and the alternative was the total lapse of the list.
That is correct as far as it goes, and it is why markets and diplomats treated the September outcome as crisis averted rather than defeat. But it prices the wrong risk. The danger is not that Usmanov and Fridman regain mobility; it is that the veto playbook has been demonstrated to work by a core state. A cyclical disruption is one where the system reverts — the list is renewed, life continues. A structural break is one where the rules of the game have changed — where every future renewal becomes an auction in which any member can table its national file.
This is structural. The evidence is in the migration of the lever: from Hungary and Slovakia, whose opposition was anticipated and managed, to France, whose participation was not. Once a sanctions hawk discovers the veto's utility, the norm of automatic renewal is broken. The 36-month extension buys time; it does not repair the mechanism.
The falsifying signal is specific: if the next renewal — due in September 2029 under the three-year deal — passes without any member state tabling a national concession demand, and if the EU moves sanctions renewal to qualified majority voting before then, the "fatal wound" thesis would be wrong. The regime would have proven self-correcting. Nothing in the September record suggests that trajectory.
What Comes Next
In the short term, the sanctions regime is intact. The 36-month extension removes the immediate cliffhanger for the individual list, and the sectoral measures were never in question. Markets should read this as continuity with a credibility discount, not collapse. The euro and European equities showed no meaningful reaction, which is itself a signal: investors treat the sanctions regime as background noise until it actually breaks.
Over the medium term, the test is behavioral. Watch whether other capitals follow the French precedent — whether a future renewal sees Germany, Poland, or a smaller state link its approval to an unrelated national demand. The first repeat would confirm the structural reading; its absence would begin to repair it.
In the long term, the choice is institutional: either the EU extends the Article 122-style insulation to the individual sanctions list and moves renewal to qualified majority, or it accepts a regime permanently exposed to twice-yearly hostage-taking. The near-lapse of September should have been the shock that forces that decision.
Three scenarios frame the path ahead. The base case is that the 36-month extension holds, the two delistings are absorbed as a one-off, and Russia gains a propaganda victory without a material change in economic pressure. The upside case for the regime is that the near-lapse shocks capitals into treaty change — extending emergency-powers insulation to the individual list and ending the unanimity requirement before the next cliffhanger. The downside case is that a future renewal sees a member state demand concessions on sectoral measures, carving up the price cap or the shadow-fleet enforcement that actually constrains Moscow's war chest.
The beneficiaries are clear enough: Russia, which gains a propaganda victory and a cracked enforcement front; the oligarchs who now see a legal pathway back; and Azerbaijan, whose leverage has been demonstrated. The exposed are Ukraine, which loses pressure at the moment it asked for more; and the EU itself, whose sanctions credibility now carries a discount that no price cap can offset.
The European Union did not lose its sanctions regime to Russian evasion. It lost it to the invoice — and the invoice arrived from Paris and Luxembourg, not from Budapest.
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