U.S. federal prosecutors are trying to get approval to sell the megayacht Amadea, which is costing taxpayers millions to maintain. Eugene Tanner/Getty Images
Two years ago, Russia invaded Ukraine, leading to sanctions against Russian oligarchs.
Many of its superyachts have been seized or frozen, prompting industry insiders to question their fate.
The yachts, some worth hundreds of millions of dollars, remain in limbo.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
More than two years after Russia invaded Ukraine, the boating world still doesn’t know what will happen to the big, expensive elephants in the sea: the oligarchs’ superyachts.
The Ukraine war has led many governments to impose sanctions on the richest Russians, including seizing their superyachts worth hundreds of millions of dollars. But it’s unclear whether they can be sold or who would buy them, leaving ports stuck in a floating limbo with the huge boats.
“The Russian problem is becoming a bigger and bigger problem,” a luxury yacht broker told Business Insider last week at the Palm Beach International Boat Show. Like many others, he asked not to be named because the matter is sensitive and the industry is generally discreet.
Russia has long been a major player in the large boat market. In August 2021 – about six months before Russia’s invasion of Ukraine – Russians owned the second-largest share of yachts over 40 meters in length, according to a report by industry publication SuperYacht Times.
They were responsible for 16 percent of new superyachts built in the decade prior to the report and are known for spending big on extravagant interiors and unique features. (One shipbuilder BI spoke with recalled an oligarch’s commission for a large safe in the owner’s cabin where he could store his rifles. The builder later learned that he used them for skeet shooting on deck.)
But those sales have now come to a halt as the oligarchs are hit by international sanctions. At least a dozen superyachts – worth a total of well over a billion dollars – are affected. And no one knows exactly what will happen to them.
Russia’s sanctioned superyachts are difficult to buy and sell
The first problem is that many of the yachts are “frozen” and not impounded. This means that while the Russian owners cannot operate or collect them, they are also not technically owned by a foreign government, so they cannot be sold without special permission.
Earlier this month, federal prosecutors asked a judge to approve the sale of the Amadea, a 106-meter-long superyacht anchored in San Diego that costs the United States up to $922,000 (around 850,000 euros) a month in maintenance.
“I have received a few inquiries but all you can tell them is that we don’t know the outcome of the case yet,” another superyacht broker told BI at the yacht show.
And although the broker claims to be interested in yachts like the Amadea, most of the super-rich – or at least their brokers – don’t want to go near the ships, even if the government gives legal permission to sell receives.
Julia Simpson, a broker at Thompson of Monaco, said: “Even if it’s completely legal and normal, there are too many things at stake,” she said, such as how the original owner got his money and whether that will give the new one could make buyers look bad.
There are also possible legal implications, as it is difficult for the government to prove who actually owns the yachts. “Oligarchs typically structure their ownership of these high-value assets through a web of offshore companies and trusts to conceal the true owner,” Joshua Naftalis, a former federal prosecutor who now works for Pallas Partners, told BI.
And when the government takes ownership, it is heavily dependent on court orders. For example, a Russian whose yacht was confiscated by the French government regained access to his boat in 2022 after winning a legal battle.
“It’s a very difficult process to buy these boats,” Ralph Dazert, news director at SuperYacht Times, told BI. “There is a high risk that the former (Russian) owner will sue you to get the boat back.”
He referred to the Alfa Nero, the 82-meter-long yacht that Eric Schmidt wanted to buy last year for $67 million (around €62 million) at an auction organized by Antigua and Barbuda. He backed out after various parties tried to block the sale, likely believing it wasn’t worth the legal issues.
“If the reason for the sanctions goes away, which may well be the case, the Russian owners will try to get their boats back,” Simpson said. After all, “the government won’t pay them.”
Superyachts deteriorate more quickly if they are not used
However, when the sanctions are lifted, the yachts will be worth much less than when they were confiscated, as a ship that is not in use deteriorates much more quickly than one that is out at sea.
“These yachts need to be used to stay in shape,” said the second broker. “Just leaving them in the dock with a temporary crew on board is not good for the boats.”
And the sanctioned Russians who managed it haveThose looking to retain control of their superyachts will not have an easy time getting rid of them in the future.
Americans trying to do business with sanctioned oligarchs would have to overcome a number of hurdles — such as finding a bank to process the purchase, which would be all but impossible. And if they did and the government found out about it, they would face heavy fines and the deal would be invalid.
So the richest Russians are “stuck” in a few countries that let them sail, such as the Maldives, Montenegro and Dubai.
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