The hits keep coming for Russian oligarchs, who are now on the receiving end of economic sanctions levied by Western countries in retaliation for Vladimir Putin’s invasion — a unilateral attack that put Russia's richest citizens under the microscope in the first place.
More than 50 high-profile individuals tied to Putin have been targeted with sanctions so far, and two yachts owned by Russian oligarchs are stuck in Western ports. Others are trying to hide their massive toys, though their options may be rather limited.
“One of the questions about all of this is: Where do you put all of these mega yachts?” former CIA officer and Yacht Watch columnist Alex Finley said on Yahoo Finance Live (video above). “There just are not that many ports in the world that can handle that many large yachts, particularly at the same time, and the facilities to take care of them because these are incredibly technological machines which require enormous amounts of service and upkeep and that know-how, and those services and shipyards are all here in Europe and the United States.”
The European Union (EU) and the U.S. levied sanctions against Russian assets in response to Russia’s invasion of Ukraine, which has led to hundreds of civilian deaths in less than two weeks amid Russian shelling.
In his State of the Union address on March 1, President Biden addressed the oligarchs directly: “We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets.”
Authorities have been tracking these yachts closely, though many of the oligarchs are doing their best to stay under the radar.
Italian officials are holding the yacht owned by Alexey Mordashov, chairman of Russian steel and mining company Severstal, while French authorities impounded the superyacht of Igor Sechin, CEO of oil giant Rosneft.
When German officials honed in on the megayacht owned by Alisher Umanov, however, it was determined that the $600 million yacht’s ownership was tied to a holding company in Malta. This is one way yacht owners have been able to avoid the seizure of their property, given that the sanctions are specific to assets held by individuals.
“We had a few — I call them freezes — over the weekend,” Finley said, stressing that there hasn’t been a full crackdown just yet. “These aren't quite seizures because it's not like the boats are being confiscated and will be sold off. But at least for now, those yachts are being held and the owners and the crew are not allowed to approach them.”
Rather than try to hide their vessels somewhere in EU territory, many of these owners have had their yachts transported to other countries.
“Viktor Vekselberg, who is under sanctions in the United States, his yacht is currently in Palma de Mallorca here in Spain, but a lot of the other yachts have left and have started heading to various different places,” Finley said. “A number of them seem to be going to the Maldives or to the Seychelles or are already over in the Arabian Sea near Dubai.”
Several websites enable users to track the movements of yachts, such as VesselFinder.com and MarineTraffic.com. The caveat, though, is that the person controlling the yacht can turn off its tracking system if it wants to stay private.
Still, as Finley stressed, “even if they do get away, where do they go and how do these people manage to upkeep their boats when they don’t have access to those services?”
Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.
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