Rich Russian hands in jet, yacht and villas

Lady M is a yacht as you would imagine a boat for the very rich. On board a beauty salon, swimming pool, fitness room, helipad and six sleeping quarters to accommodate twelve people. Lady M even has its own Wikipedia page† With a length of 64 meters and an estimated market value of 65 million euros, it can rightly be called a luxury yacht.

Lady M is owned by the richest man in Russia, Alexei Mordashov. But this steel magnate, with an estimated wealth of 29 billion dollars (26.4 billion euros), will not sail on his showpiece for the time being. Mordashov has been on the EU sanctions list since Russia’s invasion of Ukraine, alleging close ties to Vladimir Putin. Last Saturday, Italian police confiscated the yacht in the port of Imperia, in the northwest of the country. Lady M is now ‘frozen’ property.

The seizure was part of a larger seizure of luxury goods from sanctioned Russian oligarchs. In total, the Italian authorities seized 143 million euros worth of luxury goods, according to Reuters news agency.

Mordashov does not have to be afraid that he will no longer be able to sail: with the 142 meter long Nord, he still owns a second mega yacht. It is located in a harbor in the Maldives.

That berth does not seem to have been chosen by chance: the Maldives do not have an extradition treaty with the EU. A striking number of boats sailed to countries without such an extradition obligation last week, the American CNBC determined based on data from the Marine Traffic website† Yachts of Russian owners were also spotted in ports in the Seychelles and in Montenegro.

Abramovich loses Chelsea

More than two weeks after the war in Ukraine started, Russian oligarchs are starting to feel the effects of the sanctions. The measures are no longer primarily a decision on paper: assets are actually frozen.

The police intervened not only in Italy this week. Chelsea owner Roman Abramovich lost control of the London football club after a new package of measures from the British government. According to British media, the Russian made attempts to sell Chelsea in haste in recent weeks, but failed. The result: the club is now financially restricted and can only make the most necessary expenses.

In France, Igor Setshin, CEO of the Russian state oil company Rosneft, lost his yacht Amore Velo. Setshin is known as a close confidant of Putin. French Finance Minister Bruno Le Maire thanked customs officers for the seizure in a tweet†

And in Switzerland, local authorities seized several oligarchs’ private jets. According to Reuters, an Abramovich plane was also among them. American student Jack Sweeney, who previously studied Elon Musk’s travel movements kept an eye onfollows with the Twitter account Russian Oligarch Jets how rich russians move their belongings.

The consequences of the sanctions are also starting to sink in in other areas. British Sports and Culture Secretary Nadine Dorries said Putin was creating a “cultural Siberia” with his acts of war. She wants to form ‘a third front’ in the Ukraine war with sanctions against Russians in the sports and culture sector.

Metal magnate Vladimir Potanin had to give up his position on the board of the Guggenheim museums as a result of the various sanctions. Switzerland is also looking at the so-called ‘freila bearings‘, the depots in which oligarchs can store their art purchases, without having to pay tax on them. Russians might therefore no longer be able to move their art so easily.

F1 driver on sanction list

The seizures follow several rounds of sanctions in the EU, the United Kingdom and the United States. The list of sanctioned Russians and Russian companies continues to expand.

Read here about how the Amsterdam Zuidas initially stuck to her Russian clientele

The magnitude of sanctions imposed on oligarchs reached an all-time high in the past week. On Wednesday, the wealthy Russians were confronted with new restrictive measures in the EU. European heads of government agreed to put another 14 oligarchs on the sanctions list. According to Brussels, these are ‘prominent businessmen active in important economic sectors that represent a significant source of income for the Russian Federation’ and their relatives.

The EU has already put 26 oligarchs on its sanctions list. Because the list also includes a large number of Russian parliamentarians, a total of 862 Russians are now directly affected by European sanctions. They can no longer carry out financial transactions and all their assets are frozen.

The list includes billionaires such as Andrei Melnichenko, major shareholder of energy company SUEK, and Andrei Goeriev, the CEO of fertilizer producer PhosAgro. The chief executive of Russian airline Aeroflot, Mikhail Poluboyarinov, has also been hit by sanctions.

Former Formula 1 driver Nikita Mazepin and his father Dmitri Mazepin are also on the list. Mazepin senior was one of the main backers for the Haas team, for which son Nikita drove. That team has since cut ties with the Mazepin family.

In the United Kingdom, where London in particular has been a popular base for oligarchs for years, the government took extra measures on Thursday. The British sanctions list, which already consisted of 13 people, was expanded by 7 oligarchs. According to the British government 15 billion pounds of assets were frozen with this measure. Chelsea owner Abramovich is the most famous name on the list.

In addition to freezing financial assets, the UK wants to make it impossible for oligarchs to buy London real estate anonymously, via so-called offshore companies. Via a new public register, comparable to the Dutch UBO register („ultimate beneficial owner”), from now on it should become transparent who the ultimate owner of a multi-million dollar property is.

Journalist Oliver Bullough, author of the controversial book moneyland about the hidden world of the super rich, doubted in The Guardian whether the measures will have much effect† “There’s only one problem with the plan — it’s bullshit,” he wrote. The sanctions are easy to circumvent, Bullough said.

For example, oligarchs can circumvent the transparency register for real estate by owning less than 25 percent of the shares of the company that buys a property – making a few friends on paper co-shareholders is enough.

Also read: Dutch commissioners of Russian Zuidasbank remain, despite sanctions against owners

NRC wrote this week about the Amsterdam Trade Bank (ATB), which provides loans to shipping companies, among others. The bank on the Zuidas is 77 percent owned by four Russian oligarchs. The sanctioned Mikhail Fridman and Petr Aven own 42 percent of the bank as “ultimate beneficial owner”. As a result, the ATB avoids the sanctions.

Oligarchs can also simply lie when handing over information they pass on to authorities, Bullough warned, leaving actual ownership of real estate or other assets out of the picture. “And if there’s one thing we’ve learned about the Kremlin, it’s that it’s willing to lie,” he wrote.

Previously, experts in NRC also pointed out that banning oligarchs from the sanctions list is difficult in practice. By setting up financial constructions through different countries, or by renaming assets, they can disguise their real ownership.

Otherwise they can simply move to Dubai. Unlike the rest of the western world, the Arab emirate has not announced any sanctions against Russians. According to the American think tank Center for Advanced Defense Studies, at least 38 businessmen from the area of ​​Vladimir Putin have now fled to Dubai.

Nevertheless, last week showed that the oligarchs are feeling the hot breath of the authorities more than ever.