Yachts owned by Russian oligarchs — who have bought some of the largest and most extravagant “superyachts” on the planet — are gleaming symbols of how Russia’s elite have profited under the government of President Vladimir Putin.
Now, as Russian forces ramp up their deadly military campaign in Ukraine, the yachts are emerging as key targets of the US and European allies, who are vowing to seize property owned by Putin’s enablers.
Disputes are already erupting: French officials seized a yacht Wednesday night that they said was linked to Igor Sechin, a sanctioned Russian oil executive and close Putin associate, as it was preparing to flee a port. But the company that manages the ship denied Sechin was the owner. And the White House said German officials had seized another oligarch’s yacht in Hamburg, while local authorities denied any ships had been confiscated.
The French seizure shows that confiscating oligarchs’ yachts will require a concerted global effort — and it’s likely to mean protracted legal battles around the world, experts said.
In several cases, the billionaires’ yachts have been on the move in the days since the Russian offensive began.
Meanwhile, officials around the world are also enforcing sanctions on a far less flashy but still important group of vessels: oil tankers and container ships the US Treasury Department says are owned by the subsidiary of a bank with close ties to Russia’s defense industry. French authorities intercepted one of the cargo ships last weekend, and a Malaysian port refused to let another dock.
Sanctions and asset seizures “make it more difficult for the Kremlin to persuade capable people of getting involved in its activities and thereby weaken the grip of the Kremlin over elites,” said William Courtney, a former US ambassador and current executive director of the RAND Business Leaders Forum, whose members include Russian and Western leaders.
President Joe Biden put the Russian elite on notice in his State of the Union speech Tuesday night.
The US Department of Justice launched a new task force — dubbed KleptoCapture — to help put Biden’s words into action. The effort includes prosecutors, federal agents and experts in money laundering, tax enforcement and national security investigations from the FBI, the IRS, the US Marshals Service, and the US Postal Inspection Service, Attorney General Merrick Garland said in a statement Wednesday.
“We will leave no stone unturned in our efforts to investigate, arrest, and prosecute those whose criminal acts enable the Russian government to continue this unjust war,” Garland said.
Russian-tied yachts docked around the world
Yacht ownership is extremely difficult to confirm, with the ships often registered to management companies or shell corporations in an apparent effort to disguise ownership, experts say.
Most of the oligarchs who reportedly own yachts are not yet facing US sanctions. However, some have been sanctioned by the European Union or the United Kingdom, and could be added to US sanctions lists as well.
Amber Vitale, a former official with the Treasury’s Office of Foreign Assets Control, which enforces sanctions, said that US sanctions generally only prevent Americans and American companies from interacting with sanctioned individuals. That means the oligarchs’ yachts could be safe from seizure if they stay in international waters or in countries that haven’t issued their own sanctions.
“However, it would get very difficult to operate for long if many allied nations impose similar prohibitions,” Vitale said in an email. “Vessels need ports, fuel, operators/captains, repairs and supplies. Without access to these things they could be stuck floating at sea waiting for rescue or resolution.”
But a yacht management company associated with the ship denied Sechin owned it. “I can absolutely say that Igor Sechin is not the owner,” a spokesperson for Imperial Yachts, which manages the Amore Vero, told CNN. “The rightful owner is appealing the decision to seize the vessel.”
Legal experts told CNN that oligarchs were likely to transfer assets such as yachts to friends or family who aren’t sanctioned to try to prevent them from being seized. Catherine Belton, the author of a book on Putin, said she expected oligarchs were “feverishly engineering deals where ownership changes could be triggered.”
“It’s going to be a game of cat and mouse,” she said.
But a spokesperson for the Hamburg economic authority told CNN Thursday that “no yacht has been seized by authorities or customs at the port in Hamburg at this moment in time.” German customs officials did not respond to CNN’s requests for comment, and the shipbuilding company that reportedly had been refitting the yacht declined to comment.
Courtney, the former ambassador, said that he expected Russian oligarchs took most of their assets out of the US after two billionaires were sanctioned in 2018, and predicted that they would try to move their yachts out of Western European countries to avoid them being seized.
“We are likely to see more of a redistribution geographically of some of those assets,” Courtney said, to countries “that are seen as less likely to sanction,” possibly in the Middle East.
Several yachts connected to Russian oligarchs have arrived in recent weeks in the Maldives, an Indian Ocean archipelago nation. They include the Clio, reportedly owned by oligarch Oleg Deripaska, which left Sri Lanka in early February and has been sailing between various Maldives atolls since then, according to MarineTraffic. Deripaska was sanctioned by the US in 2018.
None of the oligarchs mentioned in this story responded to requests for comment from CNN sent to their spokespeople, businesses or lawyers.
Graceful departed Hamburg in early February — roughly two weeks before the invasion of Ukraine — and sped to Kaliningrad, Russia, the MarineTraffic data shows. No location data has been recorded since it arrived in the Russian city on February 9.
Sanctions will likely spark legal battles over the yachts, and require government officials to prove ownership, experts said.
“A sanctioned person may say to the government that the asset you have frozen is not one of my assets,” arguing that it is registered in a family member’s name or a shell corporation that has not specifically been sanctioned, said Raj Bhala, a professor at the University of Kansas Law School and a sanctions expert. ”The oligarch could argue before the government that you don’t really have the legal authority to seize my asset.”
But there are new dangers for the oligarchs’ yachts beyond legal proceedings: A Ukrainian ship engineer was arrested in the Spanish island of Mallorca for trying to sink a yacht owned by a Russian military export company executive, local news outlets reported.
Sanctioned shipping vessels seized, blocked from ports
Even as Biden and other officials have focused their public comments on oligarchs’ yachts, the US is also going after other shipping vessels with ties to Russia.
Some of the ships have been accused in recent years of violating past US sanctions by transporting Iranian oil. A Turkish petroleum company had agreed to service another one of the ships — an oil tanker named Pegas — at one of its terminals earlier this year, but after receiving a report that the ship may have been carrying Iranian cargo, the transaction was canceled, according to a spokesperson for the company, Opet.
CNN’s Majlie de Puy Kamp and Nadine Schmidt contributed to this report.
Biden is vowing to seize Russian oligarchs’ yachts. Here’s where they are right now