Russian oligarchs seek safe ports for their superyachts beyond U.S., E.U. sanctions over invasion of Ukraine
‘No self-respecting Russian oligarch would be without a superyacht,’ a London financier says. Roman Abramovich has one with ‘missile launchers and self-defense systems.’
The massive superyacht Dilbar is as long as one and a half football fields and has two helipads, berths for more than 130 people and a 25-meter swimming pool.
Dilbar was launched in 2016 at a reported cost of more than $648 million. Five years later, its purported owner, the Kremlin-aligned Russian oligarch Alisher Usmanov, was dissatisfied with the vessel and sent it to a German shipyard last fall for a retrofit said to cost another couple of hundred million dollars.
That’s where the ship was in drydock when the United States and European Union announced economic sanctions against Usmanov — a metals magnate and early investor in Facebook — over his ties to Russian President Vladimir Putin and in retaliation for the invasion of Ukraine.
“We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets,” President Joe Biden said during his State of the Union speech, addressing the oligarchs. “We are coming for your ill-begotten gains.”
Now, news outlets have reported that German authorities have impounded Dilbar, though a spokeswoman for Hamburg state’s economy ministry said no such action had yet been taken because it had been unable to establish ownership of the yacht, which is named for Usmanov’s mother.
Dilbar is flagged in the Cayman Islands and registered to a holding company in Malta — two secretive banking havens.
Working with the U.K.-based yacht valuation firm VesselsValue, the Associated Press compiled a list of 56 superyachts — luxury vessels at least 79 feet long — believed to be owned by a few dozen Kremlin-aligned oligarchs. These seaborne assets have a combined market value estimated at more than $5.4 billion.
The AP then used two online services — VesselFinder and MarineTraffic — to plot the last known locations of the yachts as relayed by their onboard tracking beacons.
Many are still anchored at or near sun-splashed playgrounds in the Mediterranean and Caribbean. But more than a dozen are underway to or already arrived at remote ports in small nations such as the Maldives and Montenegro, potentially beyond the reach of Western sanctions. Three are moored in Dubai, where many wealthy Russians have vacation homes.
Another three had gone dark, their transponders last pinging just outside the Bosporus in Turkey — gateway to the Black Sea and the southern Russian ports of Sochi and Novorossiysk.
Graceful, a German-built Russian-flagged superyacht believed to belong to Putin, left a repair yard in Hamburg on Feb. 7, two weeks before Russia invaded Ukraine, and is moored in the Russian Baltic port of Kaliningrad, beyond the reach of Western sanctions.
But most of the Russians on the annual Forbes list of billionaires have not yet been sanctioned by the United States and its allies, and their superyachts are still cruising the world’s oceans.
The evolution of oligarch yachts goes back to the decade after the 1991 fall of the Soviet Union, as state oil and metals industries were sold off at rock-bottom prices, often to politically connected Russian businessmen and bankers who had provided loans to the new Russian state in exchange for ownership stakes.
Russia’s nouveau riche began buying luxury yachts similar in size and expense to those owned by Silicon Valley billionaires, heads of state and royalty.
“No self-respecting Russian oligarch would be without a superyacht,” said William Browder, a London financier who worked in Moscow for years before becoming one of the Putin regime’s most vocal foreign critics. “It’s part of the rite of passage to being an oligarch.”
Russian metals and petroleum magnate Roman Abramovich — the Chelsea football club owner who recently announced he will sell the English Premier League power — is believed to have bought or built at least seven of the world’s largest yachts, some that he has since sold to other oligarchs.
Dennis Causier, a superyacht analyst with VesselsValue, said oligarch boats often include secret security measures worthy of a Bond villain, including underwater escape hatches, bulletproof windows and armored panic rooms.
“Eclipse is equipped with all sorts of special features, including missile launchers and self-defense systems on board,” Causier said. “It has a secret submarine evacuation area and things like that.”
At least 20 superyachts are reported to be under construction in Northern European shipyards — including a $500 million superyacht being built for the American billionaire Jeff Bezos, Amazon.com founder who also owns The Washington Post.
Causier said the escalating U.S. and EU sanctions on Putin-aligned oligarchs and Russian banks have sent a chill through the industry. Not only boatbuilders but also the superyachts’ crews are worried they won’t be paid — a legitimate concern given that it can cost upwards of $50 million a year to crew, fuel and maintain such a vessel.