Trying to sell Russian oligarch's seized luxury assets is running into trouble

3 weeks ago 8

After Western governments seized millions in assets from Russian oligarchs, a question remains: What should be done with their yachts?

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We have the aftermath of a policy that seemed like a good idea at the time. Shortly after Russia invaded Ukraine a couple of years ago, countries began seizing luxury assets belonging to Russian oligarchs. Now governments are trying to figure out what to do with them, NPR's Jackie Northam reports.

JACKIE NORTHAM, BYLINE: In late June 2022, a massive luxury yacht docked in San Diego Bay. The Justice Department had seized the 348-foot vessel called the Amadea in Fiji a few weeks earlier, saying it was owned by a sanctioned Russian oligarch named Suleiman Kerimov. It was one of more than two dozen yachts seized by various countries shortly after Russia invaded Ukraine, says Tom Keatinge, a financial crimes expert at the Royal United Services Institute in London.

TOM KEATINGE: We're talking about yachts that cost several hundred million dollar. They have helipads, discos, swimming pools, all the toys onboard that any aspiring oligarch would once be able to play within the Caribbean or the Mediterranean.

NORTHAM: Keatinge says priceless works of art and villas in the south of France and elsewhere were also seized in a number of Western countries. They were high-profile targets and brought a lot of attention to the war unfolding in Ukraine.

KEATINGE: The focus that sanctioning oligarchs brought was very valuable. And don't get me wrong. I'm not against sanctioning oligarchs, but the narrative around sanctioning oligarchs, frankly, has never been made clear in my mind.

NORTHAM: One of the ideas behind seizing the luxury assets was it would push the oligarchs to use their influence on Russian President Vladimir Putin to end the war in Ukraine. But Nate Sibley, who heads up the Kleptocracy Initiative with the Hudson Institute, says relying on oligarchs to influence Putin was misguided.

NATE SIBLEY: They haven't had any real influence within the Kremlin for, you know, a good 10 years now, probably.

NORTHAM: The problem now is what to do with the yachts and other seized assets. In the U.S., the Justice Department tried to move the ownership of the Amadea, the yacht it seized, through a legal procedure called civil forfeiture, sell it and send the proceeds to Ukraine. But it's been tied up in court, largely because there's debate over who the real owner is.

MAIA NIKOLADZE: Russian oligarchs have quite an experience in creating complex ownership structures and disguising their connection to property.

NORTHAM: Maia Nikoladze is with the Atlantic Council's Economic StateCraft Initiative, which is charting the efficacy of Russian sanctions. She says similar challenges over ownership are happening in other countries.

NIKOLADZE: Whenever there is a case against a Russian oligarch, there is a close associate or a family member who comes forward and claims that the yacht actually belongs to them. And then it becomes very difficult to prove that it actually belongs to the sanctioned oligarch.

NORTHAM: While the court challenges play out, Keatinge says the sea's luxury assets have to be kept in working order.

KEATINGE: These are now the responsibility of governments to maintain. And maintaining a yacht, which is sitting in salt water and is being blasted by gales, is expensive.

NORTHAM: Nikoladze says maintenance for the Amadea in San Diego Port is costing U.S. taxpayers roughly $10 million a year.

NIKOLADZE: It's paying for the crew that operates the superyachts. So it's insurance as well as maintenance. And those costs - there's just a crew.

NORTHAM: European governments are also forking out millions for maintenance. Even if they could sell one of the yachts or villas, the Hudson Institute's Sibley asks, who would buy it?

SIBLEY: A, the Oligarch will be hounding you for the rest of your life with lawsuits to try and get it back. And B, you know, many of these oligarchs are deeply involved in organized crime. There's a sort of personal safety element to sort of taking on ownership of something that was, in the oligarch's view, unfairly seized from them.

NORTHAM: For the past couple of years, sanctions have focused more on Russia's financial institutions, technology and its military complex. But like the yachts and villas, it's done little to stop Putin's war in Ukraine. Jackie Northam, NPR News.

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