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Dozens of sanctioned superyachts seized from Russian oligarchs and collectively worth billions could rapidly waste away without crews to maintain them

 

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  • Seized yachts owned by sanctioned Russian oligarchs hang in limbo as European authorities decide next steps.
  • Annual maintenance for some of the yachts costs as much as $115.6 million.
  • Without proper care, some of the megayachts could deteriorate in a matter of weeks, experts say.

Dozens of superyachts seized from Russian oligarchs and collectively worth billions of dollars could quickly waste away in a matter of weeks if they’re not properly cared for — a process that requires millions of dollars.

The yachts and their billionaire owners, many of which are among Russian President Vladimir Putin’s closest allies, were included in a series of sweeping global sanctions recently imposed against Russia for its invasion of Ukraine. Earlier this month, Italy seized a $578 million megayacht belonging to Andrey Melnichenko, France seized a $120 million vessel owned by Igor Sechin, and Spain seized a $153 million superyacht linked to Sergei Chemezov.

Insider spoke with four experts who described how the sanctions against Russia — which they say are more extensive than any other coordinated global round of sanctions in history — could lead to lengthy court battles and the deprecation of the world’s most expensive superyachts.

“Yachts will start to deteriorate as soon as the maintenance program is relaxed,” Benjamin Maltby, partner at Keystone Law in the UK and an expert in yacht and luxury asset law, told Insider. “Cleaning surfaces, and checking equipment operation is continual.”

Sanctions leave yacht maintenance in the balance

Todd Roberts, president of Marine Boat Works in California, told Insider that yachts are typically seized for sales purposes, meaning the impounder has a vested interest in maintaining the yacht and its value. However, the sanctions have made the process more murky.

The sanctions do not allow countries to take ownership of the yachts and the Russian billionaires remain the beneficiaries, though the assets are effectively frozen and blocked from use.

And while the Russian oligarchs are still technically responsible for paying for yacht maintenance, it is likely they will either refuse to pay or European authorities will encounter difficulty collecting the funds due to sanctions on financial transactions with the billionaires.

In the meantime, it remains unclear who will foot the multimillion dollar bill. According to Maltby, the maintenance cost of a yacht usually totals about 15% to 20% of its overall value. For Melnichenko’s yacht, for example, that would translate to up to $115.6 million in annual expenses.

‘This is completely uncharted territory’

Even foregoing the costs to staff, repair, fuel, and insure the ship, the costs to dock the yacht can quickly add up. Roberts said docking fees alone typically cost tens of thousands of dollars per month.

Without proper care, vessels can lose about 30% of their value, according to Roberts. What’s more, if a superyacht were to go without its crew — which typically includes a staff of 25 or more —  the vessel could quickly fail official inspections and ultimately lose its insurance due to concerns related to functionality and environmental risk.

Without insurance, the yacht would be unable to dock in most ports, harbors, or marinas around the world.

Maltby told Insider he expects most crews to walk away from the seized vessels because their pay will likely be comprised, leaving European authorities in the lurch when it comes to deciding what to do with the assets. Last week, the crew of Russian oligarch Alisher Usmanov’s 512-foot superyacht was fired after sanctions prevented the staff from receiving their wages.

“This is almost completely uncharted territory,” Roberts said. “I don’t think any of us fully understand what it will mean for the industry.”