Maldivian shelters have sanctioned the yachts of Russian billionaires

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Maldivian shelters have sanctioned the yachts of Russian billionaires

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By Alasdair Pal and Mohamed Junayd

MALE (Reuters) – The day after coal and fertilizer billionaire Andrey Melnichenko was placed on the EU sanctions list on March 9, his superyacht Motor Yacht A stopped broadcasting its location while in waters of the Maldives, according to maritime data.

In Italy, four days later, the authorities seized another of Melnichenko’s ships: the largest sailing yacht in the world, estimated by the Italian Guardia di Finanza at $ 578 million.

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

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

The cautious approach of the Maldivian authorities in applying sanctions imposed after the Russian invasion of Ukraine means that the Indian Ocean island nation has emerged as an attractive destination for Russian yacht-owning oligarchs.

Melnichenko’s ship is one of six Russian-linked yachts that have slipped between the atolls of the Maldives, southwest of India, since Western nations hit some oligarchs with sanctions in response to the February 24 invasion.

According to data provided by MarineTraffic, a marine analytics provider, three of the yachts have obscured their positions in real time, changed marked destinations or moved into international waters.

The idea of ​​hijacking yachts is “far-fetched,” because the Maldives’ legal system is not strong enough, the country’s chief prosecutor, Hussain Shameem, said in an interview, adding that authorities could not easily confiscate ships in Visit unless a crime is committed under local law.

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

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

The 119-meter (390-foot) Motor Yacht A features crystal furniture and three swimming pools, photos posted from its builders show, and has been valued in specialist nautical publications at $ 300 million. Melnichenko’s wife said she was involved in the interior design.

A spokesperson for Melnichenko in 2017 acknowledged in a statement to the BBC that the sailing yacht belonged to his boss. Both ships were designed by Philippe Starck, the famous French designer.

REFUGE

The situation in the Maldives underscores the difficulty Western powers face in stifling the wealth of oligarchs targeted by sanctions for the Russian invasion of Ukraine, as several nations around the world still offer safe havens, sources consulted by Reuters at Maldives.

The United States, Great Britain and the European Union have introduced far-reaching sanctions against Russian President Vladimir Putin, lawmakers and businessmen in the wake of the invasion, which Moscow calls a special military operation aimed at “demilitarization” and “denazification. “of Ukraine.

European countries have seized properties including villas and boats, with authorities confiscating at least six ships said to belong to some of the dozen oligarchs affected by the sanctions.

Peter Stano, a spokesman for the European Commission, said the sanctions are not binding on non-EU countries or non-aligned states such as the Maldives, although he called on all countries to join.

The Maldives voted to condemn the Russian invasion at the United Nations and publicly claim it will help international efforts against sanctioned Russians.

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

With its white beaches and around 1,200 islands, most of which are uninhabited, the Maldives are a favorite destination for the super rich.

From a backwater with scarce natural resources other than tuna and coconuts, tourism has pushed it over the past three decades to a middle-income country. It has a pre-pandemic GDP per capita of over $ 10,000, the highest in South Asia.

Tourism accounts for about a third of the $ 5.6 billion economy. Russians spend above average spending and account for by far the largest number of arrivals in January, the last month before the invasion of Ukraine, according to data from the tourism ministry.

Since then, Russian arrivals have dropped by 70 percent, Tourism Minister Abdulla Mausoom said. He wants it reversed.

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

“NO ONE CAN TOUCH THEM”

Abdul Hannan operates Seal Superyachts Maldives, supplying fuel and food to shipowners, including Russian customers.

Hannan said yacht costs typically run into the millions of millions of dollars a week and that about half of his clients are Russian. Like other superyacht owners, they often overwinter in the Indian Ocean and spend the summer season in Europe, she said.

Hannan said he has put some Russian owners aboard their superyachts since the sanctions were announced, describing them as “humble and ordinary people” who are going through a difficult time. He did not say if the people were under sanctions.

“For the time being, they are trying to keep the yachts in international waters,” where they can potentially sit idle for months at a time, he said.

“Then no one can touch them.”

He refused to name clients, citing confidentiality.

A spokesperson for the Maldives customs authority, which monitors maritime traffic in its waters, did not respond to a request for comment on the number of Russian-owned yachts currently on duty.

DELICATE DIPLOMACY

While Maldivian institutions would have a hard time ignoring a U.S. Treasury warning that failure to confiscate Russian assets would impair its access to U.S. financial markets, such a message has not been sent, an official familiar with said. the international financial agreements of the Maldives.

Asked about places including the Maldives, Andrew Adams, head of a US task force aiming to freeze oligarchs’ assets, told Reuters that Washington was seeing cooperation “at the highest level,” even as the oligarchs try to hide. yachts, aircraft or other movable property in countries they deem confidential.

However, forcing the politically unstable and financially constrained Maldives to make a tough choice about sanctions could bring them closer to China, two Western diplomats said. A previous government had strengthened relations with Beijing, although relations with the West and traditional allied India are improving.

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

(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)

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