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By Devon Pendleton (Bloomberg) When the superyacht Tango was seized by Spain at the behest of the U.S. last week, it marked a high-profile victory for the Justice Department’s KleptoCapture unit, a new group formed to track down the assets of sanctioned Russian oligarchs and others close to President Vladimir Putin.
Now comes the mundane — and somewhat awkward — part of confiscating Russian billionaire Viktor Vekselberg’s $95 million vessel: paying for yacht maintenance.
When government officials take custody of assets belonging to sanctioned individuals from Russia or elsewhere, they also assume the responsibility of keeping the asset in good condition, said Andrew Adams, a New York federal prosecutor who was appointed to lead the KleptoCapture initiative last month.
Also Read: All You Need To Know About Russian Yacht Arrests
In the case of seized yachts, that means making sure they’re covered by insurance and finding people to perform necessary upkeep so the vessel doesn’t lose value while it’s in the government’s hands.
“If we seize the boat, there are people in DOJ whose job it is to work with insurance companies, to work with yacht management companies or maritime management companies, to make sure that we’ve got the requirements in place,” Adams said in an interview. “We have to undertake that kind of responsibility.”
The 255-foot (78-meter) Tango is owned by Vekselberg, who’s been sanctioned by the U.S. since 2018. Authorities seized the Dutch-built yacht, which boasts a beauty salon, spa and jetted pool, “based on violation of U.S. bank fraud, money laundering and sanction statutes,” according to a statement.
More than a dozen superyachts with a combined value of about $2.3 billion have been impounded or seized in European ports in the past six weeks as part of sweeping sanctions leveled at Russian billionaires after the country’s invasion of Ukraine.
Maintaining big-ticket luxury items like these vessels comes with a hefty price tag.
The yearly operating cost of a superyacht is typically about 10% of the boat’s value, so about $9.5 million in the case of Tango. In Germany, authorities this week impounded the world’s largest yacht, Alisher Usmanov’s Dilbar, which the U.S. Treasury values at $600 million to $750 million.
The U.S. will also need to find experienced staff to run the yacht. Keeping existing crew members is tricky because they were on the payroll of a sanctioned individual, though most staffers of detained yachts have quit anyway.
To replace them, Adams said the DOJ has relationships with some yacht-management vendors.
–With assistance from Christian Berthelsen.
© 2022 Bloomberg L.P.
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