By K. Oanh Ha (Bloomberg) After a stopover in Hawaii, the $325 million superyacht that’s tied to Russian billionaire Suleiman Kerimov and that was seized by US authorities in Fiji has sailed into a port in Southern California.
The Amadea, a luxurious megayacht that’s nearly as long as a football field and features a helipad, docked in San Diego Monday morning local time, according to vessel data compiled by Bloomberg. It had spent a few days in Honolulu after the US hired a new crew and sailed the superyacht out of Fiji on June 7, flying the American flag after winning a legal battle.
The stop in San Diego caps a more than 13,000-nautical-mile odyssey for the vessel as it attempted to find a safe haven, with US agents from multiple government agencies pursuing it. The seizure is a huge win for the US as it looks to punish titans close to President Vladimir Putin by going after their megayachts, villas, and other assets.
With the ship now in US hands, authorities from that nation will bear the responsibility for its maintenance, which the Federal Bureau of Investigation has estimated will cost between $25 million to $30 million annually, according to court documents seen by Bloomberg.
President Joe Biden has pushed for legislation that’s been passed by lawmakers in the House of Representatives that would allow the US to seize yachts like the Amadea and other assets of sanctioned Russians, liquidate them, and use those funds to benefit Ukraine. The European Union is considering similar measures.
Still, there may be risks for buyers of seized yachts, according to Benjamin Maltby, a partner who specializes in superyacht law at London-based Keystone Law.
“Buyers need to be aware that certain countries may not necessarily recognize the seizure and transfer of ownership,” said Maltby. “Clearly, the risk is higher for countries that are at odds politically with the West — and these are unlikely to be countries one would wish to cruise to — but it’s something potential buyers should keep in mind.”
Superyacht Legal Fights
Some maritime analysts say the legal battles are likely far from over. In Fiji, the registered owner, Millemarin Investments Ltd., has contended the vessel isn’t owned by Kerimov as the US alleges but by another Russian tycoon — Eduard Khudainatov, the former chairman and CEO of Russian oil and gas giant Rosneft Oil Co. Khudainatov doesn’t appear to be on any sanctions lists. Counsel for Millemarin didn’t respond to requests for comment, nor did Kerimov and his representatives.
Legal challenges over ownership need to be hammered out in the US courts, Fiji authorities and its courts said. Deep-pocketed tycoons have filed appeals before to fight asset seizures. The US and other governments will likely face rounds of court tussles when they move to sell the more than one dozen yachts worth over $2.25 billion that have been seized as part of the push to target oligarchs, spurred by Russia’s invasion of Ukraine in late February.
The US alleges that Khudainatov is “being used as a clean, unsanctioned owner” to conceal the Amadea’s true owner. Kerimov is a Russian gold billionaire who was first sanctioned by Washington in 2018, Bloomberg reported last month.
Superyacht Shell Companies
The US says layers of offshore shell companies were created to conceal that Kerimov is actually the beneficial owner, with crew members giving code names for the sanctioned billionaire and his family members, according to a US affidavit reported earlier by Bloomberg. Kerimov, a member of Russia’s upper house of parliament, was also sanctioned by the UK and the EU in March for his close ties to Putin.
While Kerimov and his supporters will likely continue to pursue legal action to prevent the US from making good on its efforts to use asset forfeiture proceedings to enforce sanctions, many of the biggest challenges have already been overcome, Ian Ralby, chief executive of I.R. Consilium, a maritime law and security consultancy, said.
“Now that the Amadea is the continental US, dispensing of it should be able to occur in the same manner in which the US dispenses of the proceeds of crime on a regular basis,” he said. “The main challenge, if it is put up for public sale, will be finding a buyer willing to take the risk of becoming a Russian target. Then again, if you can afford that yacht, you can probably afford that risk.”
Kerimov is worth around $13.4 billion, according to the Bloomberg Billionaires Index. His family formerly held almost half of Polyus, the biggest gold producer in Russia. He beat money-laundering charges in France in 2018.
13,000 Mile Odyssey
The Amadea, which features a mosaic-tiled pool and lobster tank, has now logged more than 13,000 nautical miles since the Feb. 24 invasion of Ukraine — more than any vessel connected to sanctioned Russian tycoons, according to Spire Global Inc., a data and analytics firm that uses satellite technology to track maritime activity.
It arrived in Fiji’s Lautoka port on April 12 after an 18-day journey that took it from the Caribbean to Mexico, data compiled by Bloomberg show. Fiji detained the superyacht the following week after the US government requested mutual legal assistance.
On May 3, Fiji’s High Court gave the green light for US and local authorities to seize the vessel, but a series of legal challenges from the registered owner ensued. The US has devoted considerable resources to obtaining the yacht, sending officials to Fiji from the US Marshals Service, the FBI, and the US Coast Guard, according to court filings.
The Amadea is among more than a dozen multimillion-dollar Russian tycoon-linked megayachts rounded up by Western governments.
Germany has impounded Russian billionaire Alisher Usmanov’s superyacht Dilbar, valued at as much as $750 million. Italian authorities arrested a 530 million euro ($560 million) vessel owned by billionaire Andrey Melnichenko, while Spain seized Viktor Vekselberg’s $90 million Tango as well as the $600 million Crescent believed to belong to Igor Sechin, head of Moscow-based Rosneft.
The Amadea’s seizure shows that Russian tycoons are running out of places to park their floating palaces. Fearful of having their yachts impounded, owners have sent them to a small number of locales still considered friendly — allowing the vessels to dock or hang around unbothered — including Dubai in the United Arab Emirates, Turkey, and the Maldives.
© 2022 Bloomberg L.P.
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