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Here are the superyachts seized from Russian oligarchs

As part of an international pressure campaign on Russia, authorities from around the world have seized more than a half-dozen superyachts belonging to billionaire oligarchs allied with Russian President Vladimir Putin.

The yacht seizures since the Feb. 24 invasion are "just the beginning," White House press secretary Jen Psaki told reporters in March, as an international task force worked to identify further assets that can be seized or frozen.

“The Justice Department will be relentless in our efforts to hold accountable those who facilitate the death and destruction we are witnessing in Ukraine,” U.S. Attorney General Merrick Garland said of the ongoing efforts in May.

Here are the superyachts government officials have seized since Russia invaded Ukraine last month.

The Justice Department announced May 5 that the Fijian government had seized billionaire oligarch Suleiman Kerimov 's 348-foot yacht Amadea. The vessel, which is valued at more than $300 million , arrived in Fiji last month. Kerimov, who's worth an estimated $14 billion and has ties to the Russian government, was sanctioned by the U.S. Treasury Department over alleged money laundering in 2018.

Special features on the sprawling yacht include a helipad, infinity pool, a jacuzzi and multiple bars, according to a report in Boat International . It can accommodate 16 overnight guests in addition to 36 crew members, the report said.

In April, Spanish law-enforcement officials seized a 255-foot yacht called the Tango, which Justice Department says is owned by oligarch Viktor Vekselberg. Vekselberg is an aluminum magnate who the Treasury Department says has close ties to Russian President Vladimir Putin.

The Tango is worth an estimated $90 million, prosecutors said , and Vekselberg allegedly purchased it through shell companies. The 11-year-old yacht has seven staterooms and reportedly includes amenities such as a pool, gym and beauty salon .

Authorities in Italy seized a 215-foot superyacht called the Lady M this month. It's owned by Alexei Mordashov, Russia's richest businessman, and it’s estimated to be worth $27 million . The vessel, which requires a crew of 14, has six guest cabins , a pool and a gym.

But it pales in comparison to another of Mordashov's yachts, the $500 million Nord . The 464-foot vessel, which has two helipads and a waterfall and can accommodate 36 guests, was anchored this month in the Seychelles, where the U.S. and European Union sanctions don’t apply.

Italian officials also seized the 132-foot superyacht Lena, owned by the energy magnate Gennady Timchenko. Estimated to be worth $8 million, it has five cabins and can accommodate 10 guests.

SY A — short for Sailing Yacht A — is one of the world's largest superyachts. Valued at over $440 million, the 469-foot vessel, owned by the fertilizer magnate Andrey Melnichenko, has eight decks, multiple elevators, an underwater observation area and the world's tallest masts . It was seized in the Italian port of Trieste.

Authorities in Spain seized Sergei Chemezov's Valerie, a 279-foot superyacht that had been moored in Barcelona. Chemezov , a former KGB officer, heads the state conglomerate Rostec. Spanish Prime Minister Pedro Sanchez touted the seizure on La Sexta television. “We are talking about a yacht that we estimate is worth $140 million,” Sanchez said.

Officials in France announced this month that they had seized the 289-foot Amore Vero, which was undergoing repairs in a shipyard near Marseille. When they arrived, authorities said, they found the crew preparing for an urgent departure, even though the repair work was scheduled to last through April. The $120 million boat, which has seven cabins , is linked to Igor Sechin, described by the U.S. Treasury Department as a close ally of Putin's.

Dareh Gregorian is a politics reporter for NBC News.

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Seized Russian-owned yacht Amadea finally sets sail from Fiji under U.S. control

By Graham Kates

Updated on: June 7, 2022 / 11:44 AM EDT / CBS News

The Amadea, a Russian-owned superyacht, set sail from Fiji Tuesday bearing a U.S. flag, ending weeks of legal and administrative hurdles that had stalled American efforts to seize the $300 million vessel it says is owned by a sanctioned oligarch.

U.S. Justice Department officials had been stymied by a frenzied legal effort by the Amadea's owner to contest the American seizure warrant, and a yacht crew that refused to sail for the U.S.

Fiji's Supreme Court ultimately weighed in Tuesday, clearing the U.S. to take the 348-foot ship.  The Amadea boasts luxury features such as a helipad, a mosaic-tiled pool, a lobster tank and a pizza oven, nestled in a décor of "delicate marble and stones" and "precious woods and delicate silk fabrics," according to court documents.

The ship was targeted by the Justice Department's Kleptocapture task force, a team devoted to seizing the luxury assets of sanctioned Russian oligarchs , as part of U.S. efforts to punish Russia for its deadly war in Ukraine. Legislation supported by President Biden that has passed the House of Representatives, but not the Senate, would allow the U.S. to sell the Amadea and direct the proceeds toward the Ukraine war and recovery effort.

Today, with authorization from the Fijian High Court and under a new flag, the Amadea set sail for the United States after having been seized as the proceeds of criminal evasion of US sanctions against Russian oligarch Suleyman Kerimov. (1/2) pic.twitter.com/JHiYUDKcmQ — Anthony Coley (@AnthonyColeyDOJ) June 7, 2022

The U.S. claims the Amadea is owned by sanctioned gold mining billionaire Suleiman Kerimov, but a Fijian lawyer for the holding company the ship is registered to has said the U.S. is incorrect.

The lawyer, Feizel Haniff, said the true owner is Eduard Khudainatov, a Russian oil executive who was sanctioned by the European Union on June 4 but has not been sanctioned by the U.S. The Amadea is one of at least two massive superyachts — with a combined value of about $1 billion — owned by holding companies tied to Eduard Khudainatov

American officials are dismissive of his claim to the yachts, arguing he's not rich enough to own them. An FBI agent wrote in a warrant that Khudainatov is "a second-tier oligarch (at best) who would not have anywhere near the resources to purchase and maintain more than $1 billion worth of luxury yachts."

U.S. officials claim in court documents that Khudainatov is a "straw man" for the sanctioned Russian elite who really own the yachts. 

Haniff declined to comment on Fiji's decision Tuesday to end the legal saga that began in April , when U.S. officials accompanied Fijian police in boarding the ship to interview crew and pore through records on the ship's computers.

Those same police would later escort U.S. officials off the ship after they boarded on the morning of May 7 and demanded the captain "immediately handover the Amadea with all available key personnel," according to a sworn affidavit by the captain, filed in Fiji court.

The day before, a Fiji court had effectively frozen the ship in place, issuing a stay of a previous ruling authorizing the U.S. to take it. 

But even without that stay, the U.S. faced an unexpected hurdle. The crew, whose pay had already been frozen due to sanctions, were "refusing to sail on the Amadea with the U.S. authorities to an unknown destination," the captain wrote in his affidavit. He added that they feared cooperating with the U.S., in breach of their contracts with the ship's owner, would damage their reputations in the yachting industry.

By the end of May, contractors for the U.S. had hired a new crew of 24, led by a captain who had previously been at the helm of the Amadea.

On Tuesday, Fiji's Supreme Court ruled that the ship needed to be turned over to the U.S. in order for Fiji to comply with the United Nations Convention against Transnational Organized Crime. 

Fiji's top prosecutor said in a statement to media organizations that "the court accepted the validity of the US warrant and agreed that issues concerning money laundering and ownership need to be decided in the court of original jurisdiction," in this case, the U.S. District Court in Washington, D.C.

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Graham Kates is an investigative reporter covering criminal justice, privacy issues and information security for CBS News Digital. Contact Graham at [email protected] or [email protected]

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The U.S. seized Russian oligarchs' superyachts. Now, American taxpayers pay the price

Ayesha Rascoe

Ayesha Rascoe speaks with Stephanie Baker, senior writer at Bloomberg News, about the complications involved in seizing and maintaining superyachts owned by sanctioned Russian billionaires.

AYESHA RASCOE, HOST:

When the U.S. and its allies looked for ways to sanction the Russian elite, they zeroed in on their superyachts, filled with luxuries like heated pools and wine cellars. But as Stephanie Baker reports, the powerful symbolism of seizing a superyacht is followed by the expense of maintaining those pools and wine cellars and everything else aboard these floating palaces. Stephanie Baker is a senior writer at Bloomberg News, and she joins us now. Thanks for being with us.

STEPHANIE BAKER: Thanks for having me.

RASCOE: So you've written a series of articles on the West's seizure of these yachts from Russian oligarchs. What have you learned about what goes into maintaining these types of boats? Like, you can't just let them sit at the dock?

BAKER: No, it's not a case of turning off the lights, locking up the door and leaving them until the war in Ukraine is over. These things take an enormous amount of money to maintain. Even stuck in ports, they have to be staffed with a, you know, minimal crew to be on board in case of accidents, fires, fuel spills, the like. You know, for insurance purposes, insurance is another cost. They need to be washed so they don't entail a multimillion-dollar repaint job. And, you know, it's an incredibly costly process and complicated.

RASCOE: Is part of the issue they don't know what they're going to do with them?

BAKER: Well, in the case of the U.S., they have vowed to sell them eventually through a complicated process called forfeiture, where they have to go before a judge and prove that this superyacht has been bought with the proceeds of crime or involved in some kind of crime. And that is a lengthy, difficult process, especially in the case of Russian-linked superyachts because it's not always clear who the owner is. One forfeiture expert compared it to seizing the proceeds of a drug lord. A drug lord may not have his mansion in his own name. It would be in his girlfriend's name. So there's a long process to establish not who owns it on paper, but who's really controlling it, who's directing it, who's making decisions about it.

RASCOE: So when the U.S. or the EU seizes a yacht, the cost of maintaining that yacht - it actually goes to the taxpayers, right? Like, so how much money are we talking about that taxpayers are paying?

BAKER: It is U.S. taxpayers that are paying for it, at least until they do sell it and then can recoup the costs. Typically, it costs 10% of a superyacht's value to maintain it. But when it's frozen in port, the cost will obviously be less. It's not eating as much fuel by cruising at sea. I did a lot of reporting to try to establish, what are the real costs of keeping these things in port. And I came to a pretty conservative estimate of something like 3%. Now, in the case of one superyacht, the one that the U.S. government seized and sailed from Fiji to San Diego, I established that the annual costs of keeping that in port are about 10 million a year.

RASCOE: So 10 million a year. That's for one yacht?

BAKER: That's for one yacht.

RASCOE: For one yacht.

BAKER: And that's a conservative estimate.

RASCOE: OK. And so all together, do you have any sense of how much that might be?

BAKER: Well, globally, including the EU and the U.K. - they've seized more than 15 superyachts. And we're talking tens of millions. But if you're a sanctioned Russian oligarch with your asset frozen in a port, how long are you really going to pay? So we're looking at potentially years of litigation over these vessels about who's paying, you know, the maintenance. And they're essentially going to be in sort of legal purgatory for many years.

RASCOE: And so, I mean, most of us will never step foot on a superyacht. So it's hard for us to imagine. What is the most outrageous luxury that you've come across or one that, you know, really stood out to you?

BAKER: Right. So I went to the Monaco Yacht Show at the end of September and got on board one of the most luxurious, expensive superyachts. It was just the most incredible floating mansion. It had hand-painted bathrooms, handmade curved bar, a pool, elaborate bedrooms, you know, very high ceilings, multiple decks. They are the most extravagant status symbol, really, amongst the billionaire class.

RASCOE: That's Stephanie Baker, senior writer at Bloomberg News. Thank you so much.

BAKER: Thank you for having me.

Copyright © 2022 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

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US seizes yacht owned by oligarch with close ties to Putin

A Civil Guard stands by the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. All of Vekselberg’s assets in the U.S. are frozen and U.S. companies are forbidden from doing business with him and his entities. (AP Photo/Francisco Ubilla)

Civil Guards accompany U.S. FBI agents and a U.S.Homeland Security agent from the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. (AP Photo/Francisco Ubilla)

A U.S. federal agent leaves the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. (AP Photo/Francisco Ubilla)

A Civil Guard officer accompanies a U.S.Homeland Security agent and an FBI agent from the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. (AP Photo/Francisco Ubilla)

A U.S. federal agent and two Civil Guards board the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. All of Vekselberg’s assets in the U.S. are frozen and U.S. companies are forbidden from doing business with him and his entities. (AP Photo/Francisco Ubilla)

Civil Guards stand by the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. All of Vekselberg’s assets in the U.S. are frozen and U.S. companies are forbidden from doing business with him and his entities. (AP Photo/Francisco Ubilla)

A U.S. federal agent walks past two Civil Guards on the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. All of Vekselberg’s assets in the U.S. are frozen and U.S. companies are forbidden from doing business with him and his entities. (AP Photo/Francisco Ubilla)

Civil Guards officers accompany identified people from the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. (AP Photo/Francisco Ubilla)

A Civil Guard and a police dog walk off the yacht called Tango in Palma de Mallorca, Spain, Monday April 4, 2022. U.S. federal agents and Spain’s Civil Guard are searching the yacht owned by a Russian oligarch. The yacht is among the assets linked to Viktor Vekselberg, a billionaire and close ally with Russia’s President Vladimir Putin, who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents. All of Vekselberg’s assets in the U.S. are frozen and U.S. companies are forbidden from doing business with him and his entities. (AP Photo/Francisco Ubilla)

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PALMA DE MALLORCA, Spain (AP) — The U.S. government on Monday seized a 254-foot yacht in Spain owned by an oligarch with close ties to Russian President Vladimir Putin, a first by the Biden administration under sanctions imposed after the Kremlin’s invasion of Ukraine and targeting pricey assets of Russian elites .

Spain’s Civil Guard and U.S. federal agents descended on the Tango at the Marina Real in the port of Palma de Mallorca, the capital of Spain’s Balearic Islands in the Mediterranean Sea. Associated Press reporters at the scene saw police going in and out of the boat.

The U.S. Justice Department, which obtained a warrant from a federal judge in Washington, alleges the yacht should be forfeited for violating U.S. bank fraud, money laundering and sanctions statutes.

Superyachtfan.com, a specialized website that tracks the world’s largest and most exclusive recreational boats, values the 78-meter vessel, which carries the Cook Islands flag, at $120 million.

The yacht is among the assets linked to Viktor Vekselberg , a billionaire and close Putin ally who heads the Moscow-based Renova Group, a conglomerate encompassing metals, mining, tech and other assets, according to U.S. Treasury Department documents.

All of Vekselberg’s assets in the United States are frozen and American companies are barred from doing business with him and his entities. The Ukrainian-born businessman built his fortune by investing in the aluminum and oil industries in the post-Soviet era.

Prosecutors allege Vekselberg bought the Tango in 2011 and has owned it since then, though they believe he has used shell companies to try to obfuscate his ownership and to avoid financial oversight.

They contend Vekselberg and those working for him continued to make payments using U.S. banks to support and maintain the yacht, even after sanctions were imposed on him in 2018. Those payments included a stay in December 2020 at a luxury water villa resort in the Maldives and fees to moor the yacht.

It’s the first U.S. seizure of an oligarch’s yacht since U.S. Attorney General Merrick Garland and U.S. Treasury Secretary Janet Yellen assembled a task force known as REPO — short for Russian Elites, Proxies and Oligarchs — as an effort to enforce sanctions after Russia invaded Ukraine in late February.

“It will not be the last.” Garland said in a statement. “Together, with our international partners, we will do everything possible to hold accountable any individual whose criminal acts enable the Russian government to continue its unjust war.”

Vekselberg has long had ties to the U.S., including a green card he once held and homes in New York and Connecticut. He was also questioned in special counsel Robert Mueller’s investigation into Russian interference in the 2016 U.S. presidential election and has worked closely with his American cousin, Andrew Intrater, who heads the New York investment management firm Columbus Nova.

Vekselberg and Intrater were thrust into the spotlight in that investigation after the lawyer for adult film star Stormy Daniels released a memo that claimed $500,000 in hush money was routed through Columbus Nova to a shell company set up by Donald Trump’s personal attorney, Michael Cohen. Columbus Nova denied that Vekselberg played any role in its payments to Cohen.

Vekselberg and Intrater met with Cohen at Trump Tower, one of several meetings between members of Trump’s inner circle and high-level Russians during Trump’s 2016 campaign and the transition before his presidency.

The 64-year-old Vekselberg founded Renova Group more than three decades ago. The group holds the largest stake in United Co. Rusal, Russia’s biggest aluminum producer, among other investments.

Vekselberg was first sanctioned by the U.S. in 2018, and again in March of this year, shortly after the invasion of Ukraine began. Vekselberg has also been sanctioned by authorities in the United Kingdom.

The yacht sails under the Cook Islands flag and is owned by a company registered in the British Virgin Islands administered by different societies in Panama, the Civil Guard said, “following a complicated financial and societal web to conceal its truthful ownership.”

Agents confiscated documents and computers inside the yacht that will be analyzed to confirm he real identity of the owner, it said.

The U.S. Justice Department has also launched a sanctions enforcement task force known as KleptoCapture, which also aims to enforce financial restrictions in the U.S. imposed on Russia and its billionaires, working with the FBI, the U.S. Treasury and other federal agencies. That task force will also target financial institutions and entities that have helped oligarchs move money to dodge sanctions.

The White House has said that many allied countries, including German, the United Kingdom, France, Italy and others are involved in trying to collect and share information against Russians targeted for sanctions. In his State of the Union address on March 1, President Joe Biden warned oligarchs that the U.S. and European allies would “find and seize your yachts, your luxury apartments, your private jets.”

“We are coming for your ill-begotten gains,” he said.

Monday’s capture is not the first time Spanish authorities have been involved in the seizure of a Russian oligarch’s superyacht. Officials said they had seized a vessel valued at over $140 million owned by the CEO of a state-owned defense conglomerate and a close Putin ally.

French authorities have seized superyachts, including one believed to belong to Igor Sechin, a Putin ally who runs Russian oil giant Rosneft, which has been on the U.S. sanctions list since Russia annexed Crimea in 2014.

Italy has seized several yachts and other assets.

Italian financial police moved quickly seizing the superyacht Lena belonging to Gennady Timchenko, an oligarch close to Putin, in the port of San Remo; the 65-meter (215-foot) Lady M owned by Alexei Mordashov in nearby Imperia, featuring six suites and estimated to be worth 65 million euros; as well as villas in Tuscany and Como, according to government officials.

Parra reported from Madrid and Balsamo reported from Washington.

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Seizing an Oligarch’s Assets Is One Thing. Giving Them to Ukraine Is Another.

It could take years for Russian assets seized by the United States to be permanently confiscated and sold to benefit the Ukrainian people. The Biden administration wants to speed up the process.

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By Matthew Goldstein

The U.S. government was so pleased with its swift seizure of a Russian oligarch’s 255-foot yacht on the Mediterranean island of Majorca last month that it posted a video on YouTube of the moment F.B.I. agents and Spanish authorities clambered up the gangplank. The $90 million yacht owned by Viktor Vekselberg, called the Tango, was the government’s first big prize in a campaign against billionaires with close ties to the Kremlin.

The Tango is just a sliver of the $1 billion in yachts, planes and artwork — not to mention hundreds of millions in cash — that the United States has identified as belonging to wealthy allies of Russia’s president, Vladimir V. Putin, since the invasion of Ukraine. U.S. Magistrate Judge Zia M. Faruqui, who approved the seizure, called the pursuit of the yacht by a new Justice Department team called task force kleptocapture “just the beginning of the reckoning that awaits those who would facilitate Putin’s atrocities.”

The reckoning may take a while.

Seizing assets, whether a yacht or a bank account, is the easy part. To permanently confiscate them, the government must usually navigate a potentially cumbersome process known as civil forfeiture, which requires proving to a judge that the assets were obtained from the proceeds of a crime or through money laundering. Only then does the government actually own the assets, and have the power to liquidate them.

All that can take years, especially if the former owner is inclined to fight the forfeiture action in court.

Hoping to speed things up — and quickly get the proceeds from seized assets turned over to the Ukrainian government — the White House announced a plan last week that would make it easier for U.S. authorities to go after some oligarch assets through an administrative procedure led by the Treasury Department. Although it has not provided details of its plan, administration officials said the new procedure will provide adequate due process and allow for an “expedited” review by a federal court.

The White House proposal would significantly change the way the government handles high-dollar asset seizures. Generally, administrative forfeiture is used in lower-profile cases, intended for assets worth $500,000 or less. Such efforts are not really designed for luxury homes or massive yachts, let alone the huge sums of money that wealthy Russians are believed to have stashed away in U.S. bank accounts or invested with hedge funds and private equity firms.

“The idea of a yacht or jet valued in the hundreds of millions seized and liquidated administratively is new territory,” said Franklin Monsour Jr., a former federal prosecutor and a white collar defense lawyer with Orrick in New York.

Mr. Monsour said the administration and Congress may be banking that many Russian oligarchs will not muster a legal challenge to a new, expedited process because that would risk subjecting themselves to U.S. jurisdiction.

“It will likely be without challenge,” he said. “And the government knows that.”

Even if prosecutors are forced to proceed in some cases through the more typical civil forfeiture process, the litigation might go faster than normal for that same reason, Mr. Monsour said.

There are indications the pace of seizures is picking up. On Thursday, prosecutors said that authorities in Fiji working with the task force seized a $300 million mega yacht belonging to Suleiman Kerimov, a Russian gold magnate. But in a sign the task force may be unwilling in some cases to expose its tradecraft in tracking down assets, the 24-page affidavit presented to a federal judge in support of the seizure was heavily redacted.

The more pricey assets the government seizes, the more reason it has to speed up the forfeiture process: Luxury property must be properly maintained, otherwise their value will drop before they can be sold off to someone else in the small pool of people who can afford them.

“For yachts that are languishing in ports, there will be assets spent to maintain the vehicles,” said Daniel Tannebaum, an expert on financial crimes at the consulting firm Oliver Wyman and former Treasury official. “Some of these assets can sit for an extremely long time.”

But authorities in the U.S. are looking to do more than just strip oligarchs of their prized possessions. Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crimes at Treasury, said one goal is to “undermine the financial architecture that Russia uses to move money.”

Over the years, Russia and its oligarchs have become skilled at using a parade of shell companies in places like the British Virgin Islands to move money from Cyprus to the Cayman Islands to Jersey, in the Channel Islands, all places with a history of being seen by investors as tax havens. The task force will be looking for evidence of oligarchs taking steps to illegally evade sanctions by surreptitiously transferring money and property to an unsanctioned person or business entity.

Just last month, federal prosecutors in Manhattan filed criminal charges against Konstantin Malofeyev for illegally transferring $10 million from a U.S. bank to a business associate in Greece. Mr. Malofeyev, who recently described Russia’s invasion of Ukraine as a “holy war,” was the subject of a sanctions order by the Treasury Department in 2014 after Russia’s invasion of Crimea, a part of Ukraine that it ultimately annexed.

In October, federal agents raided a mansion belonging to Russian billionaire Oleg Deripaska in Washington and seized a wide array of assets including a Diego Rivera painting. Authorities took action in response to suspicions that Mr. Deripaska had been trying to evade sanctions by moving some of his money around, Bloomberg reported last month.

U.S. authorities have pursued assets belonging to Mr. Deripaska, an industrialist with close ties to Mr. Putin, since a sanction order in 2018 that was partly in response to Russia’s meddling in the 2016 presidential election. A year later, Mr. Deripaska sued the U.S. government, claiming that the sanctions designation was based on rumor and had rendered him “radioactive” in the business community. Six weeks ago, a federal appellate court rejected his claims .

Since Russian forces invaded Ukraine in February, the Treasury Department has imposed sanctions on more than 530 well-connected Russians. Andrew Adams, the federal prosecutor directing the new kleptocapture task force, said much of his team’s early work has involved “unprecedented” sharing of information about those individuals with U.S. financial firms, Treasury officials and overseas law enforcement groups.

Even without taking possession of an asset, the task force can make it difficult for the owner to make use of it, said Mr. Adams, a veteran federal prosecutor in Manhattan who has focused on money laundering and asset forfeiture cases.

“In the past, I would consider a win to be getting a conviction,” Mr. Adams said. “Now it could be getting an insurance company to cancel policy coverage for an oligarch’s yacht.”

Although it’s possible for the government to seize assets as part of a criminal case, Mr. Adams said, the government was unlikely to take that route. Doing so would require the arrest and conviction of their owners — an even more daunting process than the civil process or the expedited administrative procedure that the White House is considering.

But even the civil forfeiture process requires the government to show evidence of criminal conduct.

In approving the seizure of the Tango, Judge Faruqui said federal authorities had shown probable cause that Mr. Vekselberg had purchased the yacht — held through a series of shell companies — with “illicit proceeds and laundered funds.” Permanent confiscation will require prosecutors to establish that Mr. Vekselberg actually committed bank fraud, money laundering or some other crime.

Although the United States imposed sanctions on wealthy Russians soon after the invasion, global efforts to seize their assets have mostly played out in Europe and the Caribbean.

The European Union has frozen about $30 billion assets traced to Russian oligarchs since February. A few weeks ago, British officials said they had frozen some $13 billion in assets tied to just one of them: Roman Abramovich. Mr. Abramovich, one of Russia’s wealthiest men and the longtime owner of London’s Chelsea Football Club, has faced significant pressure from British officials. He agreed to part with the team in March as officials were moving to impose sanctions, and the club said on Friday that it had accepted a $3 billion bid from a consortium of buyers. The proceeds from the sale — the highest price in history for a sports team — will be placed in a frozen British bank account.

Mr. Abramovich, who has invested billions of dollars with offshore funds managed by U.S. firms and has an interest in several steel mills in the United States, has not been sanctioned by American officials, in part because he has served as an intermediary in negotiations between Ukraine and Russia . Mr. Adams, the leader of the kleptocapture task force, declined to discuss the matter.

But he did offer an explanation for why the Russian oligarchs his team is focused on seem to have fewer assets in the United States than in other countries: The sanctions that Treasury imposed following Russia’s invasion of Crimea seven years ago scared some away.

“We have had sanctions in place since 2014,” said Mr. Adams. “We have not been a friendly country to park your money in.”

Matthew Goldstein covers Wall Street and white collar crime and housing issues. More about Matthew Goldstein

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Ukraine’s troop-starved brigades have started their own recruitment campaigns  to fill ranks depleted in the war with Russia.

The Czech Republic froze the assets of two men and a news website  it accused of running a “Russian influence operation” in Europe.

Ahead of the U.S. elections, Russia is intensifying efforts to elevate candidates  who oppose aid for Ukraine and support isolationism, disinformation experts say.

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Elaborate Tales: As the Ukraine war grinds on, the Kremlin has created increasingly complex fabrications online  to discredit Ukraine’s leader, Volodymyr Zelensky, and undermine the country’s support in the West.

Targeting Russia’s Oil Industry: With its army short of ammunition and troops to break the deadlock on the battlefield, Kyiv has increasingly taken the fight beyond the Ukrainian border, attacking oil infrastructure deep in Russian territory .

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International Edition

Dozens of sanctioned superyachts seized from Russian oligarchs still hang in limbo, racking up millions in maintenance

• Seized yachts owned by sanctioned Russian oligarchs hang in limbo as US and European authorities decide next steps.
• Annual maintenance for some of the yachts costs as much as $115.6 million.
• Without proper care, some of the megayachts could deteriorate in a matter of weeks, experts say.

Dozens of superyachts seized from Russian oligarchs and collectively worth billions of dollars are likely racking up millions of dollars in maintenance costs or wasting away from improper care after hanging in limbo for almost a year.

The yachts and their billionaire owners, many of which are among Russian President Vladimir Putin's closest allies, were included in a series of sweeping global sanctions imposed against Russia for its invasion of Ukraine. Last year, Italy seized a $578 million megayacht  belonging to Andrey Melnichenko, France  seized a $120 million vessel  owned by Igor Sechin, and Spain  seized a $153 million superyacht linked to Sergei Chemezov, to name a few.

Earlier this week, CNBC reported that billions of dollars in oligarch's assets — from yachts and villas to private jets — are still frozen. Government authorities are working through a lengthy legal process that prevents them from officially taking ownership of the property. Experts previously told Insider that its a process that can take several months to years.

Most recently, US authorities filed legal paperwork in February seeking the official forfeiture of $75 million in luxury real estate tied to sanctioned Russian oligarch Viktor Vekselberg. The paperwork was filed nearly six months after the properties were first raided by the US Department of Justice and Homeland Security Investigations.

Meanwhile, other assets, including yachts, are still floating in the docks in which they were first seized. For example, the $300 million Amadea yacht that was tied to sanctioned Russian oligarch Suleiman Kerimov is still floating off Fiji after it was seized in May 2022, according to CNBC.

Insider spoke with four experts who described how the sanctions against Russia — which they say are more extensive than any other coordinated global round of sanctions in history — have lead to lengthy court battles and the deprecation of the world's most expensive superyachts. 

Related stories

"Yachts will start to deteriorate as soon as the maintenance program is relaxed," Benjamin Maltby, partner at Keystone Law in the UK and an expert in yacht and luxury asset law, told Insider. "Cleaning surfaces, and checking equipment operation is continual."

Sanctions leave yacht maintenance in the balance

Todd Roberts, president of Marine Boat Works in California, told Insider that yachts are typically seized for sales purposes, meaning the impounder has a vested interest in maintaining the yacht and its value. However, the sanctions have made the process more murky. 

The sanctions do not allow countries to take ownership of the yachts and the Russian billionaires remain the beneficiaries, though the assets are effectively frozen and blocked from use. 

And while the Russian oligarchs are still technically responsible for paying for yacht maintenance, they're unlikely to fork over the maintenance cost or authorities will encounter difficulty collecting the funds due to sanctions on financial transactions with the billionaires. 

In the meantime, it's unclear who will foot the bill. In some cases, such as in the maintenance of the Amadea, government authorities have been left to pay for the expenses, which includes paying for crew and docking fees, CNBC said. But Reuters reported in October that some countries, including France and Spain, have authorized the Russian owners to pay for the upkeep.

According to Maltby, the maintenance cost of a yacht usually totals about 15% to 20% of its overall value. For Melnichenko's yacht, for example, that would translate to up to $115.6 million in annual expenses.

'This is completely uncharted territory'

Even foregoing the costs to staff, repair, fuel, and insure the ship, the costs to dock the yacht can quickly add up. Roberts said docking fees alone typically cost tens of thousands of dollars per month.

Without proper care, vessels can lose about 30% of their value, according to Roberts. What's more, if a superyacht were to go without its crew — which typically includes a staff of 25 or more —  the vessel could quickly fail official inspections and ultimately lose its insurance due to concerns related to functionality and environmental risk.

Without insurance, the yacht would be unable to dock in most ports, harbors, or marinas around the world. 

What's more, some of the crews in charge of maintaining the vessel have long since left the ships as their pay was compromised early on by sanctions on Russia, accelerating the deterioration of the yachts and leaving authorities in the lurch when it comes to deciding what to do with the assets. 

"This is almost completely uncharted territory," Roberts said. "I don't think any of us fully understand what it will mean for the industry."

• Main content

Russian oligarch’s super yacht arrives in Turkish waters

Russian billionaires are heading for Turkey to flee Western sanctions over Russia’s invasion of Ukraine.

A yacht linked to a Russian aluminium tycoon arrived in a bay near the southwestern Turkish resort of Gocek on Saturday, as more Russian billionaires head for Turkey to flee Western sanctions over Russia’s invasion of Ukraine.

Oleg Deripaska, founder of Russian aluminium giant Rusal, has been sanctioned by the United States, United Kingdom and European Union.

Keep reading

France seizes russian oligarch’s yacht amid eu sanctions, is seizing the yachts & mansions of russian oligarchs enough no., us seizes yacht docked in spain and owned by russian oligarch.

A witness saw the 73-metre (239.5 feet) yacht Clio arrive off the coast of Gocek in the Aegean coastal province of Mugla. The Cayman Islands-flagged vessel remains in the bay off Gocek.

The arrival of the Clio in Turkish waters came after two super-yachts linked to Russian billionaire Roman Abramovich, who made a surprise appearance at Ukraine-Russia peace talks in Istanbul this month, docked in Turkish ports.

Turkey, a member of NATO, shares a maritime border with Ukraine and Russia in the Black Sea, and has good ties with both and has mediated in the continuing conflict.

Istanbul has supported Kyiv, but also opposed sanctions on Moscow, including measures against Russian billionaires.

Ankara has relied heavily on Russian energy imports and tourists and has emerged as a safe haven for Russians fleeing sanctions, and many have invested in Turkish property.

On April 4, the US government seized a mega-yacht in Spain, the first in Washington’s sanctions enforcement initiative to “seize and freeze” giant boats and other pricey assets of Russian elites.

Spain’s Civil Guard and US federal agents descended on the yacht, Tango, at the Marina Real in the port of Palma de Mallorca, the capital of Spain’s Balearic Islands in the Mediterranean Sea.

Documents tied to the US investigation alleged that oligarch Viktor Vekselberg bought the Tango in 2011 and used shell companies to hide his interest in the vessel, the US Department of Justice said.

In early March, customs officers in France seized a yacht belonging to Rosneft oil company boss Igor Sechin as it tried to leave the Mediterranean port of La Ciotat in a breach of EU sanctions on Russian oligarchs.

US says it wants forfeiture of billionaire Russian oligarch's $300 mln superyacht

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Reporting by Luc Cohen in New York; editing by Jonathan Oatis

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Thomson Reuters

Reports on the New York federal courts. Previously worked as a correspondent in Venezuela and Argentina.

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Diana Novak Jones

A Brief History of Superyachts

And how they explain the world..

Tim Murphy January+February 2024 Issue

James Clapham

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When the US targeted Russia’s oligarchs after the invasion of Ukraine, the trail of assets kept leading to our own backyard. Not only had our nation become a haven for shady foreign money, but we were also incubating a familiar class of yacht-owning, industry-dominating, resource-extracting billionaires. In the  January + February 2024  issue of our magazine, we investigate the rise of American Oligarchy—and what it means for the rest of us. You can read all the pieces  here .

The luxury yacht may be the world’s most exclusive form of transportation. But there are only a hundred-some that meet the definition of a gigayacht—a pleasure craft 295 feet or longer. Their opaque ownership records offer a glimpse of modern wealth and power: Over two dozen are linked to Gulf royals, businessmen, or states, and 20 to citizens (past or current) of the former Soviet Union. At least 23 have reportedly belonged to Americans, including founders of Microsoft, Netscape, Amazon, WhatsApp, and Snapchat. The widow of a German retailer who thrived under Hitler owned one; a UK tax exile and a Formula 1 dad still do. Yugoslav strongman Tito’s old yacht makes the list; Dominican dictator Trujillo’s does too. Take a cruise through the history of the vessels and their—somewhat—more modest sister ships.

1895: Nineteen years before World War I, the future King Edward VII of England punches his nephew, Kaiser Wilhelm II, in the face, after the German’s 121-foot yacht, Meteor II , defeats the royal Britannia in a race off the Isle of Wight.

1954: Greek shipping magnate Aristotle Onassis ushers in an era of postwar one-upmanship with his 325-foot Christina O . It features a pool that converts into a dance floor, furniture made from whale foreskin, and pornographic carvings.

1963: During his final birthday party aboard the presidential yacht Sequoia , JFK chases future Washington Post editor Ben Bradlee’s wife, Antoinette, into the bathroom and gropes her. “I guess I was pretty surprised, but I was kind of flattered, and appalled, too,” she says later. The ship’s visitor logs are destroyed after Kennedy’s assassination.

1984: King Fahd of Saudi Arabia builds the record-breaking 482-foot Prince Abdulaziz .

1987: Sen. Gary Hart (D-Colo.) drops out of the presidential race just before photos emerge of him with model Donna Rice aboard the yacht Monkey Business .

1988: Donald Trump acquires Nabila , which previously belonged to the Saudi arms dealer Adnan Khashoggi and was featured in the James Bond film Never Say Never Again . He renames it Trump Princess , adds a disco, and changes the helipad’s “H” to a “T.”

1991: After one of Trump’s casinos files for bankruptcy, he sells Trump Princess to his bank—which flips it to a Saudi prince. A new yacht, the Trump Princess II , which he boasted would be “something in excess of 400 feet long, closer to 500 feet,” is never built.

British publisher Robert Maxwell’s body is found in the Atlantic Ocean, where he had been cruising on a 180-footer named for his daughter—the Lady Ghislaine . The vessel is eventually resold to Anna Murdoch, Rupert’s second wife.

1994: At a cocktail party on the oligarch Petr Aven’s yacht in the Caribbean, Boris Berezovsky meets Roman Abramovich, calling him a “nice boy who wanted to discuss commercial projects.” He and Abramovich begin working together to acquire Sibneft, a Russian state oil company.

1997: Construction ends on The Limited and Victoria’s Secret owner Les Wexner’s ­316-foot Limitless . The project was overseen by his good friend Jeffrey Epstein.

1999: Oracle co-founder Larry Ellison buys the 191-foot Izanami from a Japanese seller. He changes the name to Ronin , he said later , after “the local newspapers started pointing out that Izanami was ‘I’m a Nazi’ spelled backwards.”

2001: Months before Enron files for bankruptcy, former CEO Jeffrey Skilling asks a company executive for advice on finding a yacht broker. “This industry is known for crooks and thieves,” he warns Skilling.

2002: House Majority Whip Tom DeLay (R-Texas) promises to strip “corporate kingpins of their ill-gotten gains,” after scandals rock Enron and WorldCom. “We’re coming after the yacht.”

2003: DeLay charges donors $500,000 a pop for tickets to a yacht cruise.

2005: Ellison shoots down rumors he issued orders midconstruction to have his newest yacht, the 454-foot Rising Sun , extended to outdo Microsoft co-founder Paul Allen’s recently launched 414-foot Octopus .

Rep. Duke Cunningham (R-Calif.) pleads guilty to federal bribery charges after being caught living rent-free on a yacht, called the Duke-Stir , that was moored in Washington, DC, and owned by a defense contractor.

Sheikh Mohammed bin Rashid Al Maktoum’s 531-foot Dubai surpasses Prince Abdulaziz as the world’s longest yacht.

2006: Media mogul Barry Diller reveals the world’s longest sailing yacht, the 305-foot Eos , whose prow features a 9-foot-tall sculpture of his wife, Diane von Furstenberg.

2007: Diller opens a Manhattan corporate headquarters­­ at a Frank Gehry­–designed building that itself has been likened to a sailboat . It’s across the street from where Eos ties up.

2008: George Osborne, the No. 2 official in the UK’s Conservative Party, relaxes on Russian aluminum magnate Oleg Deripaska’s yacht while vacationing with his family in Greece. He denies an accusation that he solicited funds, explaining in a statement that they discussed “Russian history” and drank tea.

2009: As his marriage falls apart, Tiger Woods retreats to a 155-foot yacht called Privacy .

2010: Abramovich’s new ship, Eclipse , surpasses Dubai as the world’s longest yacht. The 533-foot vessel features a submarine, anti-missile systems, and lasers to thwart paparazzi .

2011: During an unsuccessful suit seeking $5 billion he believed Abramovich owed him from the sale of Sibneft, an exiled Berezovsky claims that his former partner helped purchase the yacht Olympia for Vladimir Putin. When the BBC publishes a supporting account from another Russian businessman five years later, Abramovich’s lawyers dismiss the allegation as “a rehash of speculation and rumours.”

2012: As GOP presidential candidate Mitt Romney faces criticism for holding investment funds in the Cayman Islands, his campaign invites donors to party on Cracker Bay . The ship, owned by the founder of The Villages retirement community, flies the Cayman Islands’ flag.

2013: UAE leader Khalifa bin Zayed al Nahyan launches the 593-foot Azzam , surpassing the Eclipse .

2014: The Wall Street Journal reports that Ellison has basketball hoops on “at least two of his yachts” and had someone follow in a smaller boat “to retrieve balls that go overboard.”

2016: Allen’s Tatoosh drags its anchor through a protected zone in the Cayman Islands, destroying 14,000 square feet of coral.

2017: After leaving office, Barack and Michelle Obama retreat to the South Pacific aboard David Geffen’s yacht, where they’re joined by Oprah, Tom Hanks, and Bruce Springsteen.

Abramovich’s business partner, Eugene Shvidler, blocks views of the Statue of Liberty while anchoring his 370-foot Le Grand Bleu in New York Harbor for a month.

Addressing the national Boy Scout Jamboree, Trump tells an anecdote widely assumed to allude to sex parties on a yacht belonging to the developer of the Levittown suburbs. “You’re Boy Scouts, so I’m not going to tell you what he did,” he said. “But you know life.”

Rep. Vern Buchanan (R-Fla.) buys a yacht and on the same day votes to cut taxes on yachts.

2018: Rupert Murdoch is airlifted to UCLA after collapsing on a yacht trip with his fourth wife, Jerry Hall. “He kept almost dying,” a source tells Vanity Fair .

Republican Florida Gov. Rick Scott designates a billionaire donor’s marina as a special anti-­poverty opportunity zone.

Someone unties Seaquest , a superyacht belonging to Trump administration Secretary of Education (and billionaire) Betsy DeVos, causing it to crash into a dock on Lake Erie.

Businessman Jho Low, who financed The Wolf of Wall Street , is accused of taking part in a $4.5 billion scheme to siphon Malaysian state development funds and using some to purchase a $250 million yacht.

2019: Actress Lori Loughlin is arrested in a college admissions bribery scheme . Her daughter, USC student Olivia Jade, is vacationing in the Bahamas— on a yacht belonging to USC board of trustees chair Rick Caruso.

Following an investigation into corruption in the Nigerian oil industry, the US government auctions off businessman Kolawole Aluko’s Galactica Star , six years after Jay-Z rented out the vessel for Beyoncé’s 32nd birthday. A former Enron unit attempts to claim a portion of the proceeds.

Clarence Thomas visits an Indonesian preserve for Komodo dragons with billionaire Harlan Crow on the conservative megadonor’s Michaela Rose .

ArtNet reports that a $450 million (reputed) da Vinci that was supposed to be in an Abu Dhabi museum has been spotted hanging in Mohammed bin Salman’s personal yacht, Serene .

Kylie Jenner holds her 22nd birthday party on Low’s yacht, now under new ownership.

2020: “[I]solated in the Grenadines avoiding the virus,” Geffen writes on Instagram from Rising Sun , which he purchased in 2010. “I’m hoping everybody is staying safe.”

Steve Bannon is arrested off the coast of Connecticut by US Postal Police while aboard the fugitive Chinese billionaire Guo Wengui’s 150-foot Lady May .

Liberty University President Jerry Falwell Jr. dresses up as a character from the TV show Trailer Park Boys for a costume party aboard a NASCAR mogul’s yacht. He later posts a photo of himself to Instagram with his fly unzipped and his arms around his wife’s assistant.

2021: NRA CEO Wayne LaPierre testifies that he took refuge on Illusions , a Hollywood producer’s yacht, after the Newtown and Parkland mass shootings. “I remember getting there going, ‘Thank God I’m safe, nobody can get me here.’”

During a bitter divorce, the Daily Mail reports that Tatiana Akhmedova, wife of the Russian Azerbaijani billionaire Farkhad Akhmedov, hired a team of British special forces veterans to seize his yacht, Luna , in an effort to enforce a Marshall Islands court ruling. They settle instead, and he keeps the boat.

Port Azure , dubbed the world’s first harbor designed exclusively for megayachts, opens in Gocek, Turkey. It bills itself as a place where “problems big and small go away.”

2022: Amid reports a historic bridge will be dismantled so Amazon founder Jeff Bezos’ newly built Koru can leave Rotterdam’s shipyards, residents threaten to pelt the sailboat with eggs . The city changes plans.

A Ukrainian mechanic is arrested in Mallorca for attempting to sink a vessel owned by his boss, a Russian arms dealer.

Biden promises oligarchs he’s going to “take their ill-begotten gains” after the invasion of Ukraine. “We’re going to seize their yachts.”

Washington Commanders owner Dan Snyder avoids a congressional subpoena on the team’s misogynistic culture while cruising the Mediterranean on his yacht, Lady S .

Missing Russian superyachts are spotted waiting out sanctions at Port Azure.

Sen. Rick Scott (R-Fla.) criticizes Joe Biden for vacationing in Delaware while vacationing on a luxury yacht in Italy.

After sailing through Fiji on his yacht Aquarius , briefly retired Disney CEO Bob Iger tells friends he misses his wife and is bored with life.

New York Republican congressional candidate George Santos brokers a $19 million deal to sell a superyacht called Namaste to a Long Island car dealer.

Bankrupt crypto exchange FTX reveals in court filings that founder Sam Bankman-Fried’s hedge fund once spent $2.5 million on a yacht, which a top executive named Soak My Deck .

2023: Bezos takes possession of Koru . The $500 million, 417-foot sailboat comes with a bust that resembles his fiancée Lauren Sánchez—and its own second, 246-foot “shadow” support yacht with crew quarters and a hangar for the helicopter she pilots.

After divorcing Jerry Hall, Rupert Murdoch vacations on the Christina O with Abramovich’s ex-mother-in-law.

As TV and movie writers and actors strike, the Wall Street Journal reports that Iger, now back at work, has been regaling visitors to his Burbank office about the new, longer yacht he’s building.

Measuring Contest

Iconic gigayachts through the years

1931: Sea Cloud , Marjorie Post: 359 ft.

1981: Atlantis II , Stavros Niarchos: 380 ft.

2003: Octopus , Paul Allen: 414 ft.

2005: Rising Sun , Larry Ellison: 454 ft.

2010: Eclipse , Roman Abramovich: 533 ft.

2013: Azzam , Sheikh Khalifa: 593 ft.

Illustrations by Anthony Calvert

The Few, The Loud

Some famous faces aboard gigayachts

Steven Spielberg reeled out his anchor off Cannes.

A part of Katy Perry got stuck exiting a dinghy on her way to Barry Diller’s yacht.

Mohammed bin Salman purchased his yacht, Serene , just hours after he saw it.

Jerry Jones made a draft pick aboard his Bravo Eugenia to deepen the Cowboys’ bench.

Mariah Carey was engaged to a gigayacht owner, before the fantasy ended.

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Despite wars and sanctions, superyacht market continues recent growth.

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The Phi has been detained in Canary Wharf since March 2022.

A superyacht is a status symbol and the ultimate pleasure boat. What ordinary people envisage doing on cruise ships, the super-rich do on their mega-yachts. Space and change of scenery have appealed to humans from time immemorial. However, with luxury yacht ownership requiring vast sums of disposable income, one would think that factors putting the global economy under pressure, such as inflation, Houthi terrorists and Somali pirates attacking ships in the Red Sea, sanctions following the Russian invasion of Ukraine, and before that, the COVID-19 pandemic, would slow down the demand for superyachts. Instead, despite severe disruptions, mainly because of the post-Ukraine 2022 Russian invasion sanctions, with billions sloshing around in the global economy, demand for these vessels has reached a high point, driven by changes in the tastes of the ultra-rich, innovative new uses for superyachts, and the number of buyers able to splurge on such craft.

Expensive Mega-Toys The unique uses of a superyacht are driven by the size and crew demands that separate it from a regular yacht. A superyacht is considered to be a pleasure vessel larger than 24m (80ft) with a full-time captain and crew. This is a costly outlay. There are added costs for not including maintenance, fuel, and expensive power plant, navigation, and communications gear.

The desire for seclusion and social distancing exhibited by the rich since the 2020 pandemic lends itself perfectly to these large, customizable ships that can be taken out to sea. A fully crewed ship is also needed to keep up with for new trend in exploration and environmental sailing, with boat owners venturing outside of the Mediterranean and Caribbean to experience more varied habitats. Other luxury sectors are taking note of these trends driving demand for superyachts, with hotel chains like The Four Seasons and The Ritz-Carlton aiming to offer bespoke superyacht experiences by 2025. By introducing this option, hotel chains are responding to the increased market demand for exploration while creating an experience that is more exclusive and private than a luxury cruise.

Demand has also been driven by an expanding number of prospective superyacht buyers as the number of ultra-high-net-worth individuals continues to increase globally. The growth is primarily driven by American buyers, with significant potential in regions like China and Southeast Asia, where ultra-rich buyers with disposable income are growing at a faster pace than they are in the West. This increase in wealthy customers in Southeast Asia, combined with miles of islands and coastlines, creates the conditions for a robust scene for superyachts in the area. The emergence of a new customer base wealthy enough to purchase super- and mega-yachts has made the industry resilient in the face of government sanctions against one of the industry’s largest consumer bases: Russian oligarchs.

The megayacht Nord, believed to belong to sanctioned Russian oligarch Alexey Mordashov, is seen in ... [+] Hong Kong on Friday, Oct. 7.

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Target: Russia Beginning in the early 2000s, Russian billionaires developed a taste for luxury superyachts, with some like Roman Abramovich (who is reported to own 16 vessels , including the Aquamarine, Eclipse, Garcon, Halo, Pelorus, Solaris and Sussurroo), Alexei Mordashov ( Lady M and Nord ) and Eduard Khudainatov ( Scheherazade , Amadea , Crescent ) placing orders for multiple vessels. According to Superyacht News, an industry publication, Russians account for a significant piece of the world's superyacht market. Their estimated share represents about 10% of superyachts exceeding 40 meters in length. The percentage of Russian ownership rises even further for mega-yachts exceeding 80 meters, where Russians hold the number two spot globally, owning 20% of these vessels. Research by Boat International estimates the contribution of Russian buyers to the global superyacht order book (valued between €35 and €40 billion) to be €3.9 billion.

The popularity of superyachts among Russia’s wealthy has caused them to become a focus of the sanctions imposed on Russia following its invasion of Ukraine in February 2022. Alongside traditional targets, including Russian financial holdings, banks, and energy, the assets of oligarchs are actively being seized and frozen by Western powers when possible through initiatives like the Russian Elites, Proxies, and Oligarchs (REPO) task force launched by the G7 and the U.S. Treasury’s Kleptocracy Asset Recovery Rewards (KARR) program.

The seizure of superyachts as assets will likely continue through the end of the invasion of Ukraine and possibly beyond. Recently, there have been increasing calls to sell or transfer these assets, allowing Ukraine to use or sell them to compensate for the damages caused by the war.

Eclipse | 162.5m Built in 2010 , Germany

Europe Suffers Even though the superyacht industry has a sizeable consumer base in Russia, the companies building and managing these yachts are primarily based in Western Europe. Many of these boats are built by shipbuilders such as Lürssen in Germany and Heesen Yachts and Oceanco in the Netherlands. This has led one of the shipyards, Damen, to sue the Dutch government over damages it claims it suffered from the EU sanctions. Additionally, companies like Burgess in the UK, Imperial Yachts and Edmiston in Monaco, and Moran Yacht & Ship in the US, in charge of servicing, managing, and brokering superyachts, are also concentrated in the West.

While Western shipyards and management companies may lose revenue because of sanctions and asset seizure of the Russian oligarchs, keeping the yachts frozen generates additional costs for the countries where they are being held. Some Western countries devised a solution to ease the burden on taxpayers, granting owners and their representatives special licenses to pay for the frozen vessels. Notably, France and Spain have allowed the billionaire owners of at least four mega-yachts to pay for their upkeep. In the UK, the Office of Financial Sanctions Implementation (OFSI) has allowed the management company Burgess to pay for pre-sanction crew salaries of a yacht frozen in the UK.

Though the media associated superyachts with Russian oligarchs, this archetypal image of a superyacht owner may soon grow obsolete if the sanctions regime remains or even strengthens, causing multi-million dollar losses to the industry. Instead, growth in the sector is driven by a new class of rich being created in places like the United States and the Pacific Rim, seeking luxury lifestyles that can be provided by a superyacht. The superyacht industry will capitalize on the unprecedented wave of demand to increase its resilience in the stormy global security and economic environment.

Quin Buckley & Henry Tsai contributed to the production of this article.

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