As sanctions bite, what happens to Russian-owned superyachts?
|In the past eight weeks at least 25 Russian superyachts have been seized, arrested or detained by governments, banks and law enforcement agencies. This includes 12 under construction in the Netherlands. It also includes Dilbar (pictured above) (linked to sanctioned Russian businessman Alisher Usmanov), which German police say was seized yesterday while at a yard undergoing a refit.
Other high profiles seizures include the 77m (255ft) Tango. Spanish authorities seized the superyacht on behalf of the US Department of Justice due to its connections to sanctioned oligarch, Viktor Vekselberg. The 192ft (58.5m) $50m yacht Phi, owned by an unnamed Russian businessman, was arrested at Canary Wharf, East London under sanctions legislation. Phi was in London for the judging of the World Superyacht Awards.
Yesterday, the UK sanctioned Vagit Alekperov who owns Heesen Yachts. Alekperov is subject to a UK travel ban and asset freeze despite calling for an end to the war.
Few believe that this is the end. “We may yet see a second wave of seizures,” says Benjamin Maltby, partner, Keystone Law. There are also more problems to come with detained vessels. Both with storage fees and maintenance.
In most jurisdictions where yachts have been seized, no duty of care is owed to the owner or yacht by the government. “Owners remain responsible for ensuring that their yachts continue to be maintained. If they cannot pay suppliers then this is not governments’ concern,” says Maltby. “Port authorities are likely to charge owners a storage fee. Those fees are going to rise maybe to a point where those two figures meet in the middle. That may be the point where the port authority decides, ‘we could end up with not enough value here to cover our costs,’ and to look to auction or sell by tender.”
Crew on Russian yachts also face real issues. The UK has introduced a new amendment designed to stop individuals from providing technical services. “UK citizens who are employed on the vessels of sanctioned Russian individuals could be committing a criminal offence if they do not comply with this amendment,” said Rachel Lynch, international strategic organiser, Nautilus International. “Anyone found to be in breach of the law could face extremely severe penalties, including imprisonment.”
Superyacht Times Intelligence says that Russian owners account for 9% of all superyachts in market share and 14.7% by volume in 2021. With more sanctions and seizures expected, you can bet the total will not stay at 25 detained yachts.
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