FT spoke about squatters and sabotage on arrested Russian yachts

Yachts owned by Russians seized by Western countries require large amounts of money for maintenance and security, and many difficulties arise with their sale, writes FT. The newspaper links the fate of the yachts with the effectiveness of the sanctions regime

Since the start of the Russian special operation in Ukraine, Western countries have seized dozens of yachts belonging to businessmen who allegedly have close ties to President Vladimir Putin. However, after two years, most of them have not been sold at auction, as expected, and continue to sit in ports, subject to attempts by squatters, writes the Financial Times (FT).

The newspaper cites as an example the fate of the 58-meter superyacht Phi, which, according to FT, belongs to Russian developer Sergei Naumenko. Thus, the yacht moored in London's Canary Wharf is still there, and its small crew maintains the ship daily.

The ship's captain, Guy Booth, told the FT that on the morning of March 29, 2022, a retinue led by then British Defense Secretary Grant Shapps arrived at the pier where Phi was moored. After this, Shapps began making a TIKTOK , in which he announced that Phi "belongs to a Russian oligarch, a friend of Putin." Three National Crime Agency (NCA) officers then boarded the yacht and handed Booth a brown envelope containing a government order to seize the yacht.

Jaffa & Co lawyer Paul Dickie, who represented Phi's owners, also told the FT the yacht had been attacked by squatters. There is currently a sign affixed to the Phi's board warning any potential violators that they will be prosecuted "to the fullest extent of the law."

Another “clear example of how much trouble confiscated superyachts have caused Western governments” is the 106-meter superyacht Amadea, worth $300 million, seized by US authorities in Fiji in 2022. The FT recalls that US Deputy Attorney General Lisa Monaco noted at the time that the seizure “should tell every corrupt Russian oligarch that they cannot hide.” Shortly after the seized Amadea arrived at the port of San Diego, the US government filed a civil forfeiture case for the superyacht, based on claims that it belonged to sanctioned Russian billionaire Suleiman Kerimov.

At the same time, Amadea continues to dock in the port of San Diego, and its monthly maintenance is about $740 thousand, or almost $9 million a year, which must be paid by the US government. Because of this, the US Department of Justice tried to sell the boat, claiming that the costs were “excessive”, writes FT.

The newspaper notes that the arrested superyachts require constant maintenance and repair, and they also need constant security to protect them from sabotage. Thus, FT cites as an example an attempt to sabotage the Lady Anastasia yacht, allegedly belonging to the HEAD of Rosoboronexport, Alexander Mikheev, when in February 2022, a Ukrainian mechanic working on the boat attempted to deliberately sink it.

The FT recalls that at one time anti-corruption activists hoped that these ships would be sold at auction, and the proceeds could be donated to Ukraine. However, more than two years after the conflict began, the future of these superyachts “remains uncertain.” “For Western governments, deciding the fate of these superyachts will test the effectiveness of high-stakes economic sanctions. For the lawyers working for the oligarchs who own them, these seizures are acts of modern-day piracy,” the article says.

At the same time, as the publication writes, even if governments are able to confirm ownership (as in the case of Amadea) and obtain COURT permission to sell superyachts, further legal difficulties may complicate the search for a buyer. As an example, FT cites the story of the sale of the Alfa Nero yacht, allegedly owned by PhosAgro co-owner Andrey Guryev. In June 2023, the ship was sold at auction for $67 million to former GOOGLE CEO Eric Schmidt, but the deal ultimately fell through because Schmidt considered the legal risks of such a deal to be significant.

Russian authorities condemn Western sanctions, calling them illegal. President Vladimir Putin said that Western countries are trying to exhaust the Russian economy and “provoke an increase in socio-political tensions within the country” with the help of sanctions, but all to no avail.