Shelter in the Maldives punished the yachts of Russian billionaires


By Alasdair Pal and Mohamed Junayd

MALE (Reuters) – A day after coal and fertilizer billionaire Andrey Melnichenko was put on the European Union’s sanctions list on March 9, his superyacht Motor Yacht A stopped broadcasting its location in Maldives waters, showing marine data.

In Italy, four days later, authorities seized one of Melnichenko’s ships, the world’s largest sailboat, which Italian financial police estimate is worth $ 578 million.

Disabling devices that allow authorities to track the whereabouts of a ship can help keep yachts out of sight.

But in the Maldives, the likelihood of action against the assets of criminal oligarchs is in any case small, according to interviews with dozens of people familiar with the internal debate on how to respond to US and European financial sanctions, including government ministers, diplomats and experts in the country’s super-yacht industry. .

The Maldives’ cautious approach to enforcing sanctions imposed after Russia’s invasion of Ukraine means that the island nation of the Indian Ocean has emerged as an attractive destination for Russian oligarchs owning yachts.

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 attacked several oligarchs with sanctions in response to the February 24 invasion.

Three of the yachts hid their locations, changed destinations or moved to international waters, according to data from MarineTraffic, which provides marine analysis.

The idea of ​​seizing a yacht is “disgusting” because the Maldives’ judicial system is not strong enough, the country’s chief prosecutor, Hussain Shameem, said in an interview, adding that the authorities could not easily confiscate a visiting ship unless a crime was committed under local authorities. law.

Unsuccessful requests for comments on turning off Motor Yacht A’s location equipment and its current ownership status were sent to Melnichenko’s spokesman as well as his charity, fertilizer maker EuroChem Group, and the coal company SUEK – two companies he resigned from in March.

Last month, his spokesman told Reuters that the businessman would oppose the sanctions, adding that he had no political ties.

The 119-meter (390-foot) Motor Yacht A features crystal furniture and three swimming pools, photos from her workshop exhibition, and it has been valued at $ 300 million in specialized boat versions. Melnichenko’s wife has said she was involved in the interior design.

A 2017 Melnichenko spokesman admitted in a statement to the BBC that the sailboat belonged to his boss. Both ships were styled by Philippe Starck, the famous French designer.

GRIÐASTAÐUR

The situation in the Maldives underscores the Western powers’ difficulty in stifling the wealth of oligarchs who have been sanctioned by Russia’s invasion of Ukraine, where several nations around the world still offer safe haven, according to Maldives Reuters sources.

The United States, Britain and the European Union imposed heavy sanctions on Russian President Vladimir Putin, lawmakers and businessmen in the wake of the invasion, which Moscow calls a special military operation aimed at “disarmament” and “de-liberalization” of Ukraine.

European countries have seized property, including villas and boats, but authorities have seized at least six ships that they say belong to one of the dozens of oligarchs who have suffered sanctions.

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

The Maldives voted by condemning Russia’s invasion of the United Nations and publicly declaring that it would assist international efforts against sanctions against Russia.

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

With its powder white beaches and about 1,200 islands, most of them uninhabited, the Maldives is a favorite destination for the super-rich.

From backwaters with little natural resources over tuna and coconuts, tourism has driven it to middle-income countries for the past three decades. It has a pre-pandemic GDP of more than $ 10,000 – the highest in South Asia.

Tourism accounts for about a third of the $ 5.6 billion economy. Russia spends more than average, with the vast majority of arrivals in January, the last month before the invasion of Ukraine, according to the Ministry of Tourism.

Since then, the number of Russian arrivals has dropped by 70%, said Abdulla Mausoom, Minister of Tourism. He wants it reversed.

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

“NO ONE CAN TOUCH THEM”

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

Hannan said the cost of the yachts usually runs into the hundreds of thousands of dollars a week and that about half of his customers are Russians. Like other super-yacht owners, they often spend the winter in the Indian Ocean and spend their summers in Europe, he said.

Hannan said he had met several Russian owners on board his super yachts since sanctions were announced, describing them as “humble, ordinary people” in difficult times. He did not say whether the people were under sanctions.

“At the moment, they are trying to keep the yachts in international waters,” where they could be idle for months, he said.

“Then no one can touch them.

He refused to name the clients by referring to confidentiality.

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

SENSITIVE DIPLOMACY

Although the Maldives ‘institutions would find it difficult to ignore the US Treasury Department’s warning that failure to seize Russian assets would affect their access to US financial markets, such a message has not been sent, said an official familiar with Maldives’ international financial arrangements.

Asked about locations, including the Maldives, Andrew Adams, head of a U.S. task force aimed at freezing oligarchs’ assets, told Reuters that Washington was seeing “all-time high-level” cooperation, even as oligarchs try to hide yachts, planes or other mobile property in countries they consider to be secret.

However, forcing politically unstable and financially strained Maldives to make difficult sanctions could push them closer to China, two Western diplomats said. The previous government had strengthened relations with Beijing, although relations with the West and India’s traditional ally are now improving.

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

(Reports by Alasdair Pal and Mohamed Junayd in Male; Additional Reports by Sarah Lynch in Washington, Jan Strupczewski in Brussels and Dasha Afanasieva in London; Editing by Frank Jack Daniel)

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