Hong Kong Refuses to Enforce U.S. Sanctions on Russian Megayacht

Hong Kong's political leadership has refused a request to enforce U.S. sanctions on the Russian megayacht Nord, defying warnings from the U.S. Department of State.

The Nord is a 466-foot, 10,000 GT, $500 million megayacht delivered in Germany last year. She is the largest yacht ever sold by her builder. For amenities, she has two helicopter landing pads, a retractable hangar, 20 guest cabins, and the standard accountrements of a vessel of her size - a beauty salon, elevator, a stern fold-down "beach club" and a movie theater, among others.

Nord belongs to belongs to sanctioned steel magnate Alexei Mordashov, the owner of Russian mining and metals giant Severstal. His family's net worth comes to nearly $30 billion, making him the wealthiest man in Russia, according to Forbes. 

Mordashov holds a stake in Rossiya Bank, which the EU describes as the "personal bank" of Russian officials who have profited from the Russian annexation of Crimea in 2014. This stake and his alleged ties with the Kremlin were enough to place him on the first EU sanctions list in late February. He has also been sanctioned by the U.S., UK, Australia and New Zealand. 

The Nord has been more active than most sanctioned Russian yachts since the start of the invasion. She departed her cruising grounds in the Seychelles in mid-March and transited the Singapore Strait, ending up in the Russian Far East port of Vladivostok in April. She transited south from Vladivostok to Hong Kong earlier this month, risking seizure in the event of an emergency port call.

Nord's warship-sized presence in Hong Kong's harbor was quickly noticed, and the U.S. Treasury contacted the Chinese-controlled government of Hong Kong to request its seizure.

Hong Kong CEO John Lee Ka-chiu, who is blacklisted by the U.S. Treasury himself, said firmly that Hong Kong would only enforce United Nations sanctions - not unilateral United States sanctions. 

“We cannot do anything that has no legal basis,” Lee told the AP.

The U.S. State Department responded by questioning Hong Kong's reputation. “The possible use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment," a spokesperson for the State Department said in a statement Monday.