President Biden is targeting super-yachts, private jets and other notable symbols of their wealth of Russian oligarchs, while Russian President Vladimir Putin is escalating his country’s attack on Ukraine.
A new federal working group called KleptoCapture will focus on what Mr Biden described in his speech on the state of the Union on Tuesday as “the crimes of Russian oligarchs”.
“We are joining our European allies to find and confiscate your yachts, your luxury apartments, your private jets,” Mr Biden said. “We’re coming for your malicious profits.”
More than a dozen Russian billionaires are under sanctions from the United States, the European Union and the United Kingdom, and some are trying to evade restrictions by relocating mobile assets – including mega-yachts – to areas where sanctions do not apply and where their assets cannot. be seized or their seized assets.
The Graceful super-yacht, believed to be owned by Vladimir Putin himself, left Germany two weeks before Russia invaded Ukraine and recently docked in Kaliningrad, near Russia’s nuclear weapons operations, according to MarineTraffic. marine tracking website.
The “graceful”, allegedly belonging to Russian President Vladimir Putin, is seen anchored in the port of Sochi, Russia, in July 2015. Marcus Brand / Getty Images
Putin’s ally, Roman Abramovich, who made a fortune in the energy business, is currently not on any government sanctions list, but is taking action to unload valuable assets, including Chelsea Football Club. Among those assets is a super-yacht called the Eclipse, the world’s third-largest vessel, measuring more than 540 feet long and 72 feet wide, according to Marine Vessel Traffic, a website that tracks the location of ships and other vessels. vessels, including private yachts. He recently sailed from St. Barts to Philipsburg, the capital of St. Martin, the Dutch country on the Caribbean island of St. Martin.
Le Grand Bleu, owned by Russian oil titan Eugene Schwidler, is also anchored off St. Martin’s Island, where EU sanctions could be imposed.
Too big to hide
Some oligarchs on the sanctions list, who are said to have amassed wealth in Russia through political corruption, have already been cut off from their own valuable assets.
EU sanctions against Russian oligarchs on Wednesday led to the freezing of Germany on a yacht owned by Alisher Usmanov, one of the richest Russians, according to a Forbes report. According to Marine Traffic, the 512-foot yacht, named “Dilbar”, has been located in Hamburg, Germany, since October 29 for repairs.
The French Ministry of Economy and Finance announced on Thursday that its customs agents had seized the yacht Amore Vero, owned by a company owned by Igor Sechin, director of Russia’s oil company Rosneft. The yacht was housed for repairs in La Ciotat in the Cote d’Azur region of southern France.
Although the crew’s intention was to “sail urgently without completing the planned work”, it was confiscated before it could leave, the agency said.
Escape from hot spots
Hoping to avoid the same fate, some yacht owners are “chasing him offshore,” financier and anti-corruption activist Bill Browder told CBS News senior investigator Catherine Herridge.
They dock their mega-yachts, some with a 100-member crew, in places like Dubai and the Maldives, a nation of small islands in the Indian Ocean that has no extradition treaty with the United States. “They park their assets where they cannot be confiscated.” Browder told CBS MoneyWatch.
The problem is that ships of this size cannot stay indefinitely in a place like the Maldives, which can generate significant revenues through docking fees, given their need to refuel and stockpile.
“There are a number of these yachts in the Maldives, and unless these countries impose sanctions, they are probably safer there,” Alasder Milroy, a marine accountant and owner of Breaking the Mold Accounting, told CBS MoneyWatch. “But you can spend as much time in a place like the Maldives on a yacht of this size without the need for provisions or refueling, so I don’t know how well this will last for a long time. I don’t think “I’ll be able to do it that long.”
The Dilbar super-yacht, owned by Russian billionaire Alisher Usmanov, will dock in Weymouth Bay in the United Kingdom on June 8, 2020. Getty Images
Deputy Attorney General Lisa Monaco, who is in charge of the new US task force against Russian oligarchs, issued a stern warning: “We will use every tool to freeze and confiscate your criminal proceeds,” she said in a statement.
Confiscating the wealth of Russian oligarchs could be an effective tactic, Browder told CBS MoneyWatch. “It’s extremely symbolic and part of it is psychological warfare. It really has an impact – if not financially, then psychologically.”
At least 10 of the world’s 100 largest super-yachts belong to Russian oligarchs, according to Marine Vessel Traffic.
Maritime tracking websites show that other oligarchs’ yachts are on the move as their owners try to protect their assets from confiscation. The 230-foot, $ 80 million Galactica Super Nova, owned by Vagit Alekperov, president of the Russian oil company Lukoil, recently left its berth in Barcelona, Spain, where EU sanctions are being applied, and sailed for Tivat, Montenegro. in the Balkans, according to VesselFinder.com.
The Galactica Super Nova, built by Heesen Yacht Builders BV, is pictured at the Monaco Yacht Show on September 28, 2016. Chris Ratcliffe / Bloomberg via Getty Images
The Clio, a super-yacht owned by Russian industrialist Oleg Deripaska, is currently anchored off the Maldives, according to MarineTraffic.com. A handful of other oligarch-owned mega-yachts have also docked in the Maldives, including Alexander Abramov’s Titan, Viktor Rashnikov’s Ocean Victory and Vladimir Potanin’s Nirvana.
How sanctions work
Putting a person or their assets under official sanction does not give another government the legal authority to seize their assets – just to freeze or cut off access to their owner.
“Generally speaking, sanctions are the body that allows us to freeze assets. It’s easiest to understand in the context of a bank account – it’s literally placed in a frozen account that still exists and collects interest and you own it, but you can’t take money from it, “said Adam M. Smith, a partner at Gibson Dunn Law Firm. .
Tangible property must also be under US jurisdiction in order for any sanctions to apply or for the government to suspend the owner’s ability to use the asset as a private yacht or aircraft.
Daniel P. Ann, an expert on sanctions and economic warfare at the Woodrow Wilson International Center for Scientists and a former chief economist at the US State Department, said targeting a yacht to an individual could limit its use, even if it is not confiscated.
“If it arrives in the West, any port that can refuel is no longer allowed to do so. So the yacht itself may not be confiscated, but it is much less useful to have, “he said.
For this reason, sanctioned persons may choose to try to sell assets such as yachts at a loss, instead of risking losing their use indefinitely.
“If I were an oligarch, the first thing I would do was protest and say I shouldn’t be blacklisted. The second would be to see if I can liquidate these assets and get something back, knowing that otherwise it could rot in the quay without proper maintenance and the like, “said Anne.
As for their impact, the sanctions are more than just symbolic, he added. “The ultimate goal is to make life very difficult for these oligarchs, and it has been achieved,” said Anne.
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