Maldives hosts yachts of sanctioned Russian billionaires

Maldives hosts yachts of sanctioned Russian billionaires
  • Maldives will not actively pursue yacht seizure: sources
  • Fears impact of Russian sanctions on tourism industry: sources
  • “Unreasonable” to think that the yachts will be confiscated

MALE, April 7 (Reuters) – A day after coal and fertilizer billionaire Andrey Melnichenko was placed on the European Union’s sanctions list on March 9, his superyacht Motor Yacht A stopped broadcasting its location while it was in Maldivian waters, maritime data show.

In Italy, four days later, authorities seized another of Melnichenko’s ships, the world’s largest sailing yacht, estimated to be worth $578 million by Italian financial police.

Turning off devices that allow authorities to track a ship’s whereabouts can help keep yachts out of their sight.

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But in the Maldives, the chances for action against sanctioned oligarchs’ property are slim in any case, according to interviews with a dozen people familiar with internal discussions about how to respond to US and European financial sanctions, including ministers. government officials, diplomats and experts in the country’s superyacht industry.

The Maldivian authorities’ cautious approach to enforcing sanctions imposed after Russia’s invasion of Ukraine means the Indian Ocean island nation has become an attractive destination for Russian yacht-owning oligarchs.

Melnichenko’s ship is one of six Russia-linked yachts that have sailed between atolls in the Maldives, southwest of India, since Western nations slapped sanctions on some oligarchs in response to the Feb. 24 invasion.

Three of the yachts hid their live locations, changed reported destinations or moved into international waters, according to data provided by MarineTraffic, a marine analytics provider. Read more

The idea of ​​seizing yachts is “crazy” because the Maldivian legal system is not strong enough, the country’s chief prosecutor, Hussain Shameem, said in an interview, adding that authorities could not easily seize visiting boats unless that a crime has been committed under local law. law.

Requests for comment on Motor Yacht A’s deactivation of locating devices and its current ownership status, sent to Melnichenko’s spokesman as well as his charitable foundation, fertilizer producer EuroChem Group and coal company SUEK, two companies he resigned from in March, went unanswered.

Last month, his spokesman told Reuters the businessman would contest the sanctions, adding that he had no political affiliations.

The 390-foot (119-meter) Motor Yacht A features glass furniture and three swimming pools, photos released by its build schedule, and has been valued in boating trade publications at $300 million. Melnichenko’s wife has said that she was involved in interior design.

A spokesman for Melnichenko in 2017 acknowledged in a statement to the BBC that the sailboat belonged to his boss. Both ships were designed by Philippe Starck, the renowned French designer.

SAFE SHELTER

The situation in the Maldives underscores the difficulty Western powers face in quashing the wealth of oligarchs targeted by sanctions over Russia’s invasion of Ukraine, as several nations around the world still offer safe haven, sources consulted by Reuters said. in Maldives.

The United States, Britain and the European Union introduced sweeping sanctions against Russian President Vladimir Putin, lawmakers and businessmen after the invasion, which Moscow calls a special military operation aimed at the “demilitarization” and “denazification” of Ukraine.

European countries have seized property, including villas and boats, with authorities seizing at least six boats they say belong to some of the dozens of oligarchs affected by the sanctions.

European Commission spokesman Peter Stano said the sanctions were not binding on non-EU or non-aligned countries such as the Maldives, although he called on all countries to adhere to them.

The Maldives voted to condemn Russia’s invasion at the United Nations and publicly maintains that it will aid international efforts against the sanctioned Russians.

In fact, officials say they are concerned about the economic impact of deterring wealthy Russian visitors.

With its white-sand beaches and some 1,200 islands, most of them uninhabited, the Maldives is a favorite destination for the super-rich.

From a backwater with scant natural resources beyond tuna and coconuts, tourism propelled it to become a middle-income country over the last three decades. It has a pre-pandemic GDP per capita of more than $10,000, the highest in South Asia.

Tourism accounts for about a third of the $5.6 billion economy. Russians are above-average spenders and made up by far the largest number of arrivals in January, the last month before Ukraine’s invasion, Tourism Ministry data shows.

Since then, Russian arrivals have fallen by 70%, Tourism Minister Abdulla Mausoom said. He wants that reversed.

“Our entry policy is very open. Maldives is an open country,” he said.

“NOBODY CAN TOUCH THEM”

Abdul Hannan runs Seal Superyachts Maldives, providing fuel and food to boat owners, including Russian customers.

Hannan said yacht costs are typically in the hundreds of thousands of dollars a week and about half of his clients are Russian. Like other superyacht owners, they often spend the winter in the Indian Ocean and spend the summer season in Europe, he said.

Hannan said he has met some Russian owners on board his superyachts since the sanctions were announced, describing them as “normal, humble people” going through a difficult time. He did not say whether the people were under sanctions.

“At the moment, they are trying to keep the yachts in international waters” where they can potentially sit idle for months, he said.

“So no one can touch them.”

He declined to name the clients, citing confidentiality.

A spokesman for the Maldives customs authority, which oversees shipping traffic in its waters, did not respond to a request for comment on the number of Russian-owned yachts currently present.

DELICATE DIPLOMACY

While Maldivian institutions would find it difficult to ignore a warning from the US Treasury that not seizing Russian assets would affect their access to US financial markets, that message has not been sent, an official said. familiar with Maldivian international financial agreements.

Asked about places like the Maldives, Andrew Adams, head of a US task force seeking to freeze oligarchs’ assets, told Reuters that Washington was seeing cooperation “at an all-time high” even as oligarchs try to hide yachts, planes or other mobile properties in countries that they believe are secretive.

However, forcing the politically unstable and financially strapped Maldives to make a difficult decision on sanctions could bring it closer to China, two Western diplomats have said. A previous government had strengthened relations with Beijing, although relations with the West and traditional ally India are now improving.

“We are aware of the economic risks involved” for the Maldives if it takes a hard line, one of the diplomats said.

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Reporting by Alasdair Pal and Mohamed Junayd in Male Additional reporting by Sarah Lynch in Washington, Jan Strupczewski in Brussels and Dasha Afanasieva in London Editing by Frank Jack Daniel

Our standards: The Thomson Reuters Trust Principles.

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