Shelters in the Maldives sanctioned the yachts of Russian billionaires

Alasder Paul and Mohamed Junaid

MALE (Reuters) – A day after billionaire coal and fertilizer billionaire Andrei Melnichenko was placed on the EU sanctions list on March 9, his superyacht Motor Yacht A has stopped broadcasting its location in Maldives waters, marine data show.

In Italy, four days later, authorities seized another of Melnichenko’s ships, the world’s largest sailing yacht, valued at $ 578 million by Italian financial police.

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

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

The cautious approach of the Maldives authorities to the implementation of sanctions imposed after Russia’s invasion of Ukraine means that the island nation in the Indian Ocean has become an attractive destination for Russian oligarchs who own yachts.

Melnichenko’s ship is one of six Russian-linked yachts that have slipped between Maldives atolls in southwestern India after Western countries imposed sanctions on some oligarchs in response to the February 24 invasion.

According to data provided by MarineTraffic, a provider of marine analytics, three of the yachts hid their locations, changed reported destinations or moved to international waters.

The idea of ​​confiscating yachts is “far-fetched” because the Maldives’ legal system is not reliable enough, the country’s chief prosecutor Hussein Shamim said in an interview, adding that authorities could not easily confiscate visiting vessels unless the crime was committed under local law. rights.

Requests for comment on the shutdown of the motor yacht A locator and its current state of ownership were made to Melnichenko’s spokesman, as well as to his charity, the EuroChem Group fertilizer manufacturer and the SUEK coal company, two of which he left in March. answer.

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

The 119-meter (390-foot) motor yacht A has crystal furniture and three swimming pools, photos published by its builder, and it has been valued in special editions on boats at $ 300 million. Melnichenko’s wife said that she was engaged in interior design.

Melnichenko’s spokesman in 2017 in a BBC statement admitted that the sailing yacht belonged to his boss. Both ships were designed by Philippe Starck, a famous French designer.

SHELTER

The situation in the Maldives underscores the difficulties Western nations face in stifling the wealth of oligarchs subject to sanctions for Russia’s invasion of Ukraine as several countries continue to offer safe havens, sources advised by Reuters in the Maldives said.

The United States, Britain and the European Union have imposed large-scale sanctions against Russian President Vladimir Putin, lawmakers and businessmen following an invasion that Moscow calls a special military operation aimed at “demilitarizing” and “denationalizing” Ukraine.

European countries have confiscated property, including villas and boats, and authorities have confiscated at least six courts, which they say belong to some of the dozens of oligarchs affected by the sanctions.

European Commission spokesman Peter Stano said sanctions were not mandatory for non-EU countries or countries like the Maldives, although he called on all countries to adhere to them.

The Maldives has voted to condemn Russia’s invasion of the UN and has publicly stated that it will contribute to international efforts against sanctions-stricken Russians.

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

The Maldives with white beaches and about 1,200 islands, most of which are uninhabited, are a favorite destination for the super-rich.

Over the past three decades, tourism from the Gulf with scarce natural resources other than tuna and coconuts has moved to a middle-income country. It has a per capita GDP of more than $ 10,000 before the pandemic, the highest in South Asia.

Tourism accounts for about a third of the $ 5.6 billion economy. In January, the last month before the invasion of Ukraine, Russians have more than average costs and accounted for the largest number of arrivals, according to the Ministry of Tourism.

Since then, Russian arrivals have fallen by 70%, Tourism Minister Abdullah Mauzum said. He wants it repealed.

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

“No one can touch them”

Abdul Hanan manages the Seal Superyachts Maldives, providing fuel and food to shipowners, including Russian customers.

Hanan said the cost of yachts is usually hundreds of thousands of dollars a week, and that about half of his customers are Russians. Like other superyacht owners, they often winter in the Indian Ocean and spend the summer season in Europe, he said.

Hanan said he had met some Russian owners aboard their superyachts since the sanctions were announced, describing them as “modest, normal people” experiencing difficult times. He did not say whether people are under sanctions.

“While they are trying to keep yachts in international waters,” where they could potentially stand idle for months, he said.

“Then no one can touch them.”

He declined to name customers, citing confidentiality.

A spokesman for the Maldives Customs Service, which monitors maritime traffic in their waters, did not respond to a request for comment on the number of Russian yachts currently in service.

FRAGILE DIPLOMACY

While Maldives agencies would find it difficult to ignore the US Treasury Department’s warning that refusing to confiscate Russian assets would affect access to U.S. financial markets, such a message was not sent, said an official familiar with the Maldives’ international financial arrangements.

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

However, forcing the politically unstable and financially constrained Maldives to make difficult choices over sanctions could bring them closer to China, two Western diplomats say. The previous government strengthened relations with Beijing, but now relations with the West and India’s traditional ally are improving.

“We are aware of the economic risks that entail” for the Maldives if it is harsh, said one of the diplomats.

(Report by Alasder Paul and Mohamed Junaid in Male; additional reports by Sarah Lynch in Washington, DC, Jan Strupczewski in Brussels and Dasha Afanasieva in London; edited by Frank Jack Daniel)

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