Things had been going so well for the superyacht industry. Demand during the pandemic helped buoy sales. These hit a record high last year of 887 ships, twice that sold in 2019. But the wind has turned. Economic sanctions on Russia will hurt.
The country’s billionaires provide a lot of custom, owning as much as a tenth of existing ships. German shipbuilders Lürssen and Blohm+Voss are popular brands. But Russia-linked superyachts are now fleeing wealthy hangouts in Europe as asset seizures loom.
Sanction-free sanctuaries are necessary destinations. The Maldives is most popular according to ship tracking service MarineTraffic. Superyachts belonging to at least five oligarchs have docked at the capital Malé. These include the Clio, reportedly owned by metals magnate Oleg Deripaska, who was placed under US sanctions in 2018.
President Vladimir Putin’s own 269ft Blohm+Voss yacht Graceful reportedly left Germany for the Russian enclave of Kaliningrad two weeks before the Ukraine conflict began.
Two of his close associates clearly did not get an early warning. French finance minister Bruno Le Maire said the Amore Vero owned by Igor Sechin had been seized. The vessel belonging to the chief executive of state oil company Rosneft was impounded at La Ciotat near Marseille.
But connecting these superyachts to any individuals on the sanctions lists is not so easy. For example, the $600mn Dilbar belonging to Alisher Usmanov, the owner of industrial conglomerate Metalloinvest, was reportedly seized in Hamburg. German authorities later denied this. While Usmanov may well be on sanction lists, proving the ship belongs to him could be trickier. The ship remains stuck in Hamburg nonetheless.
According to sanctions expert Martijn Feldbrugge, “Imposing sanctions does have an effect but putting them into practice, especially on real assets, is where legal problems start.” Many of Russia’s oligarchs have been in sticky situations with authorities before. Ownership of assets can be hidden through multiple layers in different jurisdictions.
The hesitancy of German authorities to seize the Dilbar likely reflects the difficulty of this task. That suggests these yachts will continue to seek safe ports for some time.