Impounded Russia-linked yachts lose €580mn in value

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Yachts linked to Russian owners have shed €580mn in value after being impounded across Europe after Moscow’s full-scale invasion of Ukraine, with many left to deteriorate in marinas.

Luxury yacht brokerage Cecil Wright found that 15 impounded yachts, which would be worth €3.5bn if they had been well maintained, are now worth €2.9bn. It is not clear how many yachts linked to Russia have been seized in total.

The yachts, most of whose owners have been hit with sanctions for alleged connections with Moscow, include oligarch Viktor Vekselberg’s Tango, impounded in Spain. Also seized is the 143-metre A, which Italy alleged belongs to Andrey Melnichenko, formerly Russia’s richest person. (Lawyers for Melnichenko said in 2024 that he did not personally own the yacht and that it was controlled by a trust with no connection to him.)

“You would normally have that boat out of the water every year . . . You’d maintain all the engines, you would have water and fuels and lubricants running through the boat 24/7,” said brokerage founder Chris Cecil-Wright. “Boats are living creatures, they don’t like to be left sitting still.”

One of them, 58-metre-long Phi, is docked in London’s Canary Wharf next to an Italian restaurant, in the shadow of residential towers, and is in visibly poor shape. Scaffolding has been erected on the yacht to protect it from debris and some of its windows have been whitewashed.

Phi was impounded under the Russian sanctions regime a month after Vladimir Putin’s full-scale invasion of Ukraine, the UK government said at the time. Phi’s nominal beneficial owner, businessman Sergei Naumenko, is not subject to sanctions and neither is its true owner as identified by the FT in 2022, Vitaly Vasilievich Kochetkov. The government’s action was unusual because normally an individual is targeted with sanctions, which then affects their assets.

There is no ban against maintaining Phi, said Benjamin Maltby, a superyacht lawyer, but the sanctions regime bans moving it, which has the effect of prohibiting significant maintenance. Rules differ across Europe, he added: some boats impounded in Italy have since been maintained.

Duncan Bateson, a partner at law firm Hannaford Turner, said that if a boat has been seized because its owner is under sanctions, “maintenance service companies would be in breach of those sanctions if they contracted with or got paid by the sanctioned person”.

An individual who is subject to sanctions can apply for a licence from the government to maintain their boat, he added, but costs and the prospect of success are unclear.

Cecil Wright based its calculations about how much the boats would be worth in good order on market sales data of comparable vessels and on replacement costs. It then depreciated those figures using factors including visible deterioration, reports from people who had been on board some of the boats and the impact of missed scheduled maintenance.

Although the boats have been impounded, it would be hard for authorities to sell them and confiscate the proceeds or use them for reparations to Ukraine, said Steve Goodrich, head of research and investigations at Transparency International.

“Leaping from the evidence base that we have for freezing these assets under sanctions to actually recovering them through asset recovery laws is not straightforward,” he said.

He added that sanctions were “not an asset recovery tool” but an attempt to “get those who are targeted by sanctions to change how they’re behaving”. This policy was justified “even if the consequence is the assets decline in value because they’re left rusting in ports”.

Cecil Wright found that at least three dozen more yachts across Europe are owned by individuals under sanctions, but have not been seized.

“It is sad to see [the yachts’] demise,” said Cecil-Wright. “But when you see buildings being bombed in Ukraine, it pales into insignificance.”

Additional reporting by Giuliana Ricozzi and Carmen Muela