It does not sound as if American Express has withdrawn, but rather the contract with their local issuer has ended and will not be renewed. This decision could have been made by either party.
You are right, Citadele issued a statement according to which they stop selling American Express cards because of reguloratory changes.
Usually payments made in the area with an Amex card were processed by Citadele, thus the probability that the number of places where it will be possible to pay with Amex will decrease.