Russian oligarchs’ yachts on the move as sanctions reveal reach of dirty cash

Ukrainian resistance broke out in the tranquil turquoise waters of Port Adriano in Mallorca last weekend when maintenance mechanic Taras Ostapchuk (55) went from hatch to hatch opening them wide to sink the Lady Anastasia, a 48m-long motor yacht.

Fellow crew members raised the alarm and Ostapchuk was arrested and appeared in a local court, where he told media the sabotage was his first act of resistance before he intended to return to Ukraine to fight against Russia's invasion.

“He regards the owner of the yacht as a criminal because he earns money selling arms that, according to him, kill Ukrainians,” the judge wrote in a summary of proceedings passed to media.

The yacht's owner is Alexander Mikheev, the 61-year-old chief executive of Rosoboronexport, the weapons export arm of Russia's state-owned defence conglomerate Rostec, Ostapchuk told journalists.

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The 80m-long Graceful slipped out of a Hamburg shipyard and is now tucked away out of the reach of the authorities now seeking to seize the assets of its reputed owner, Russian president Vladimir Putin

The Lady Anastasia, advertised for sale for €7 million in 2018, is registered to the Caribbean island nation St Vincent and the Grenadines, which supports its economy by offering secret offshore companies and bank accounts to people who want to hide their money there.

Superyachts are hidden assets in plain sight, lining the ports of Europe while boldly flying the flags of the tax havens to which they are registered, as required by maritime regulations.

They burn through hundreds of litres of fuel each hour, and much of the global fleet of about 9,000 of them blazes back and forth across the Atlantic each year to spend summer in the Mediterranean and winter in the Caribbean.

Since the invasion, the behemoths have been on the move. The 80m-long Graceful slipped out of a Hamburg shipyard where she had been undergoing repairs on February 7th and is now tucked away in the waters of Kalingrad, the Russian Baltic enclave, out of the reach of the authorities now seeking to seize the assets of its reputed owner, Russian president Vladimir Putin.

Beyond EU

The palatial Galactica Super Nova, registered to the Cayman Islands but by renown the property of oil billionaire Vagit Alekperov, slipped out of Barcelona and made for non-EU member Montenegro two days after the invasion began.

Since the West imposed sanctions, at least five superyachts owned by Russian billionaires have clustered in the waters of the Maldives in the Indian Ocean, which has no extradition treaty with the United States.

The imposition of sanctions has forced a sudden reckoning with the profound reach of dirty cash in western economies

The US and EU countries have vowed to hunt down the yachts of sanctioned oligarchs and seize them.

"Their superyachts should find no harbour in our Europe!" president of the European Parliament Roberta Metsola declared to applause from the chamber on Tuesday.

The imposition of sanctions has forced a sudden reckoning with the profound reach of dirty cash in western economies, enabled by a global financial secrecy industry built from the remains of the British empire.

To fix it, we must end financial secrecy, and properly fund enforcement agencies, argues Financial Times investigations correspondent Tom Burgis.

“Agencies that have for years supposed to have been enforcing sanctions, fighting corruption and money laundering ... their annual budget is so small that any respectable oligarch would make the equivalent in a couple of days,” he tells The Irish Times.

Willing help

His book Kleptopia: How Dirty Money Is Conquering the World describes the global pattern in how individuals use coercion and corruption to seize power in countries with large natural resources, plunder them and then launder the money with willing help in the West.

The cash shapes western societies as kleptocrats buy political influence, normalise rule by coercion and use expensive lawyers to censor reporting about the situation, he writes.

Burgis ended up unwittingly proving his own point when he received threatening legal letters about his reporting that ran to twice the length of the book itself.

He was in court this week in London, sued for libel over his book by the oligarch-founded, Luxembourg-based Eurasian Natural Resources Corporation.

The case was dismissed.