The European Union is to remove sanctions on two oligarchs imposed after Russia's full-scale invasion of Ukraine in 2022, according to reports, prompting anger in Ukraine.

France had campaigned for Russian-Uzbek billionaire Alisher Usmanov to be taken off the list, citing "national security concerns". Luxembourg called for the removal of Russian-Israeli businessman Mikhail Fridman, who is suing the country for the release of frozen assets.

Latvia initially opposed the deal but agreed to a compromise, part of which involved extending sanctions on nearly 3,000 other individuals and entities for three years.

Ukrainian officials said the move was "unacceptable" and sent the wrong signal to Moscow.

"Moscow is celebrating because it got what it wanted: a sense of impunity, the humiliation of the EU, and division among Europeans," Foreign Minister Andriy Sybiha said on X.

He urged all EU member states to instead announce national sanctions on the two individuals. Latvia has already said it would do so.

Kremlin spokesperson Dmitry Peskov earlier welcomed the prospect of the two oligarchs being taken off the list, claiming the EU's sanctions were illegal and all Russians should be removed.

Usmanov founded USM Holding company, an investment group that owns iron, steel and copper suppliers, and the Megafon telecommunications company. He has in the past had ties with the English Premier League clubs Arsenal and Everton.

The EU froze his assets in 2022, describing him as "a pro-Kremlin oligarch with particularly close ties to Russian president Vladimir Putin". Usmanov said the decision was "unfair".

It has been reported that France's initiative was linked to a prospective prisoner release deal with Azerbaijan.