Fleeing sanctions, oligarchs seek safe ports for superyachts
WASHINGTON (AP) — The massive superyacht Dilbar stretches one-and-a-half football fields in length, about as long as a World War I dreadnaught. It boasts two helipads, berths for more than 130 people and a 25-meter swimming pool long enough to […]
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WASHINGTON (AP) — The massive superyacht Dilbar stretches one-and-a-half football fields in length, about as long as a World War I dreadnaught. It boasts two helipads, berths for more than 130 people and a 25-meter swimming pool long enough to accommodate another whole superyacht.
Dilbar was launched in 2016 at a reported cost of more than $648 million. Five years on, its purported owner, the Kremlin-aligned Russian oligarch Alisher Usmanov, was already dissatisfied and sent the vessel to a German shipyard last fall for a retrofit reportedly costing another couple hundred million dollars.
That’s where she lay in drydock on Thursday when the United States and European Union announced economic sanctions against Usmanov — a metals magnate and early investor in Facebook — over his ties to Russian President Vladimir Putin and in retaliation for the invasion of Ukraine.
“We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets,” President Joe Biden said during his State of the Union speech Tuesday night, addressing the oligarchs. “We are coming for your ill-begotten gains.”
But actually seizing the behemoth boats could prove challenging. Russian billionaires have had decades to shield their money and assets in the West from governments that might try to tax or seize them.
Several media outlets reported Wednesday that German authorities had impounded Dilbar. But a spokeswoman for Hamburg state’s economy ministry told The Associated Press no such action had yet been taken because it had been unable to establish ownership of the yacht, which is named for Usmanov’s mother.
Dilbar is flagged in the Cayman Islands and registered to a holding company in Malta, two secretive banking havens where the global ultra-rich often park their wealth.
Still, in the industry that caters to the exclusive club of billionaires and centimillionaires that can afford to buy, crew and maintain superyachts, it is often an open secret who owns what.
Working with the U.K.-based yacht valuation firm VesselsValue, the AP compiled a list of 56 superyachts — generally defined as luxury vessels exceeding 24 meters (79 feet) in length — believed to be owned by a few dozen Kremlin-aligned oligarchs, seaborne assets with a combined market value estimated at more than $5.4 billion.
The AP then used two online services — VesselFinder and MarineTraffic — to plot the last known locations of the yachts as relayed by their onboard tracking beacons.
While many are still anchored at or near sun-splashed playgrounds in the Mediterranean and Caribbean, more than a dozen were underway to or had already arrived in remote ports in small nations such as the Maldives and Montenegro, potentially beyond the reach of Western sanctions. Three are moored in Dubai, where many wealthy Russians have vacation homes.
Another three had gone dark, their transponders last pinging just outside the Bosporus in Turkey — gateway to the Black Sea and the southern Russian ports of Sochi and Novorossiysk.
Graceful, a German-built Russian-flagged superyacht believed to belong to Putin, left a repair yard in Hamburg on Feb. 7, two weeks before Russia invaded Ukraine. It is now moored in the Russian Baltic port of Kaliningrad, beyond the reach of Western sanctions imposed against him this past week.
Some Russian oligarchs appear to have not gotten the memo to move their superyachts, despite weeks of public warnings of Putin’s planned invasion.
French authorities seized the superyacht Amore Vero on Thursday in the Mediterranean resort town of La Ciotat. The boat is believed to belong to Igor Sechin, a Putin ally who runs Russian oil giant Rosneft, which has been on the U.S. sanctions list since Russia annexed Crimea in 2014.
The French Finance Ministry said in a statement that customs authorities boarded the 289-foot Amore Vero and discovered its crew was preparing for an urgent departure, even though planned repair work wasn’t finished. The $120 million boat is registered to a company that lists Sechin as its primary shareholder.
On Saturday, Italian financial police in the port of San Remo seized the 132-foot superyacht Lena, which is flagged in the British Virgin Islands. Authorities said the boat belongs to Gennady Timchenko, an oligarch close to Putin and among those sanctioned by the European Union. With an estimated net worth of $16.2 billion, Timchenko is the founder of the Volga Group, which specializes in investments in energy, transport and infrastructure assets.
The 213-foot Lady M was also seized by the Italians while moored in the Riveria port town of Imperia. In a tweet announcing the seizure on Friday, a spokesman for Italian Prime Minister Mario Draghi said the comparatively modest $27 million vessel was the property of sanctioned steel baron Alexei Mordashov, listed as Russia’s wealthiest man with a fortune of about $30 billion.
But Mordashov’s upsized yacht, the 464-foot Nord, was safely at anchor on Friday in the Seychelles, a tropical island chain in the Indian Ocean not under the jurisdiction of U.S. or EU sanctions. Among the world’s biggest superyachts, Nord has a market value of $500 million.
Since Friday, Italy has seized 143 million euros ($156 million) in luxury yachts and villas in some of its most picturesque destinations, including Sardinia, the Ligurian coast and Lake Como.
Most of the Russians on the annual Forbes list of billionaires have not yet been sanctioned by the United States and its allies, and their superyachts are still cruising the world’s oceans. The 237-foot Stella Maris, which was seen by an AP journalist docked this past week in Nice, France, is believed to be owned by Rashid Sardarov, a Russian billionaire oil and gas magnate.
The evolution of oligarch yachts goes back to the tumultuous decade after the 1991 fall of the Soviet Union, as state oil and metals industries were sold off at rock-bottom prices, often to politically connected Russian businessmen and bankers who had provided loans to the new Russian state in exchange for the shares.
Russia’s nouveau riche began buying luxury yachts similar in size and expense to those owned by Silicon Valley billionaires, heads of state and royalty. It’s a key marker of status in Moscow and St. Petersburg, and size matters.
“No self-respecting Russian oligarch would be without a superyacht,” said William Browder, a U.S.-born and now London-based financier who worked in Moscow for years before becoming one of the Putin regime’s most vocal foreign critics. “It’s part of the rite of passage to being an oligarch. It’s just a prerequisite.”
As their fortunes ballooned, there was something of an arms race among the oligarchs, with the richest among them accumulating personal fleets of ever more lavish boats.
For example, Russian metals and petroleum magnate Roman Abramovich is believed to have bought or built at least seven of the world’s largest yachts, some of which he has since sold off to other oligarchs.
In 2010, Abramovich launched the Bermuda-flagged Eclipse, which at 533 feet was at the time the world’s longest superyacht. Features include a wood-burning firepit and swimming pool that transforms into a dance floor. Eclipse also boasts its own helicopter hangar and an undersea bay that reportedly holds a mini-sub.
Dennis Cauiser, a superyacht analyst with VesselsFinder, said oligarch boats often include secret security measures worthy of a Bond villain, including underwater escape hatches, bulletproof windows and armored panic rooms.
“Eclipse is equipped with all sorts of special features, including missile launchers and self-defense systems on board,” Cauiser said. “It has a secret submarine evacuation area and things like that.”
Eclipse was soon eclipsed by Azzam, purportedly owned by the emir of Abu Dhabi, which claimed the title of longest yacht when it was launched in 2013. Three years after that, Usmanov launched Dilbar, which replaced another slightly smaller yacht by the same name. The new Dilbar is the world’s largest yacht by volume.
Abramovich, whose fortune is estimated at $12.4 billion, fired back last year by launching Solaris. While not as long as Eclipse or as big as Dilbar, the $600 million Bermuda-flagged boat is possibly even more luxurious. Eight stories tall, Solaris features a sleek palisade of broad teak-covered decks suitable for hosting a horde of well-heeled partygoers.
But no boat is top dog for long. At least 20 superyachts are reported to be under construction in various Northern European shipyards, including a $500 million superyacht being built for the American billionaire Jeff Bezos.
“It’s about ego,” Cauiser said. “They all want to have the best, the longest, the most valuable, the newest, the most luxurious.”
But, he added, the escalating U.S. and EU sanctions on Putin-aligned oligarchs and Russian banks have sent a chill through the industry, with boatbuilders and staff worried they won’t be paid. It can cost upwards of $50 million a year to crew, fuel and maintain a superyacht.
The crash of the ruble and the tanking of Moscow stock market have depleted the fortunes of Russia’s elite, with several people dropping off the list of Forbes billionaires last week. Cauiser said he expects some oligarch superyachts will soon quietly be listed by brokers at fire-sale prices.
On Thursday, the U.S. Treasury Department issued a new round of sanctions that included a press release touting Usmanov’s close ties to Putin and photos of Dilbar and the oligarch’s private jet, a custom-built 209-foot Airbus A340-300 passenger liner. Treasury said Usmanov’s aircraft is believed to have cost up to $500 million and is named Bourkhan, after his father.
Usmanov, whose fortune has recently shrunk to about $17 billion, criticized the sanctions.
“I believe that such a decision is unfair and the reasons employed to justify the sanctions are a set of false and defamatory allegations damaging my honor, dignity and business reputation,” he said in a statement issued through the website of the International Fencing Federation, of which he has served as president since 2008.
Abramovich has not yet been sanctioned. Members of the British Parliament have criticized Prime Minister Boris Johnson for not going after Abramovich’s U.K.-based assets, which include the professional soccer club Chelsea. Under mounting pressure, the oligarch announced this past week he would sell the $2.5 billion team and give the net proceeds “for the benefit of all victims of the war in Ukraine.”
Meanwhile, location transponders showed Solaris moored in Barcelona, Spain, on Saturday. Eclipse set sail from St. Maarten late Thursday and is underway in the Caribbean Sea, destination undisclosed.
Associated Press writer Aritz Parra in Madrid contributed to this report.
Follow AP Investigative Reporter Michael Biesecker at twitter.com/mbieseck
Contact AP’s global investigative team at Investigative@ap.org.
Michael Biesecker, The Associated Press