Luxury yachts linked to Russian owners have lost €580 million in value after being seized across Europe following Moscow’s full-scale invasion of Ukraine, the Financial Times has reported.
Yacht brokerage Cecil Wright told the paper that 15 impounded yachts, which it estimated would be worth €3.5 billion had they been well maintained, are now worth around €2.9 billion, with many left to deteriorate in marinas.
“You would normally have that boat out of the water every year...You’d maintain all the engines, you would have water and fuels and lubricants running through the boat 24/7,” said brokerage founder Chris Cecil-Wright.
“Boats are living creatures, they don’t like to be left sitting still,” he continued, adding: “But when you see buildings being bombed in Ukraine, it pales into insignificance.”
Who owns the yachts?
Most of the yacht’s owners were hit with sanctions for alleged connections with Moscow.
They include oligarch Viktor Vekselberg’s ‘Tango’, which has been impounded in Spain. Another is the 143-meter ‘A’, which Italy alleged belongs to Andrey Melnichenko, formerly Russia’s richest person – although Melnichenko’s lawyers have said the yacht was controlled by a trust with no connection to him.
One of the impounded yachts, 58-metre-long ‘Phi’, is docked in London and was seized under Russian sanctions a month after Vladimir Putin’s full-scale invasion of Ukraine.
But Phi’s owner, Vitaly Vasilievich Kochetkov, is not subject to Russian sanctions. Rather, the sanctions regime bans moving it, which has the effect of prohibiting significant maintenance.
The FT reported that the boat has had scaffolding erected on it to protect it from debris and that some of its windows have been whitewashed.
Could the assets go to Ukraine?
Steve Goodrich, head of research and investigations at Transparency International, told the FT that it would be hard for authorities to sell the boats and use the proceeds for reparations to Ukraine, even though they have been impounded.
“Leaping from the evidence base that we have for freezing these assets under sanctions to actually recovering them through asset recovery laws is not straightforward,” Goodrich said.
He added that sanctions were “not an asset recovery tool” but an attempt to “get those who are targeted by sanctions to change how they’re behaving”. This policy was justified “even if the consequence is the assets decline in value because they’re left rusting in ports”.
It is not clear how many yachts linked to Russia have been seized in total, the FT said.