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The US is considering stepping up its campaign against Russian oligarchs.
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There’s bipartisan interest in Congress to seize assets from individuals with close ties to Putin.
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Yacht seizures aren’t new, but they could raise questions of legality.
Amid Russia’s invasion of Ukraine, powerful members of the Russian elite face escalating Western campaigns aimed at confiscating prominent symbols of their wealth.
France seized its first superyacht from a Russian oligarch on Thursday as part of a widening financial effort targeting Russian President Vladimir Putin’s closest allies. French customs officials seized the $120 million yacht from Igor Sechin, CEO of Russian state-controlled oil giant Rosneft and an executive with close ties to Putin.
Now there is a growing appetite in Congress for the US to follow suit. Democratic Rep. Tom Malinowski of New Jersey and Republican Rep. Joe Wilson of South Carolina unveiled the “Yachts for Ukraine Act” on Thursday. The legislation would authorize the federal government to take hold of assets valued above $5 million and repurpose the wealth toward weapons for the Ukrainian military and humanitarian aid among other purposes.
President Joe Biden is on board. He said at his recent State of the Union address that the US would soon step up its campaign against Russian oligarchs. “We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets,” he said on Tuesday evening. “We are coming for your ill-begotten gains.”
But actually going out and seizing oligarchs’ yachts poses several logistical and legal difficulties, from figuring out how to pay impounded crews to determining who actually owns the yachts amid a tangle of shell corporations.
There are a lot of legal and practical questions around seizing oligarchs’ yachts
Yacht seizures are nothing new, and they are regularly made to recover debts. As Benjamin Maltby — a partner at the UK-based Keystone Law who specializes in superyacht and luxury-asset law — told Insider, a country typically detains or arrests a yacht by ordering the captain not to leave the port. In rare instances, the yacht is chained to the docks.
In those cases, owners continue to pay the crew and suppliers as usual. But Maltby said the nature of current sanctions could make that difficult, if not impossible, if a Russian oligarch’s yacht gets impounded. As he explained, the freezing of assets and Russian banks’ suspension from the SWIFT payment system means that suppliers might not be allowed to deal with the yacht’s owner and that it might not be possible to pay the yacht’s crew.
It could also be tricky for the government to actually get its hands on the yachts. If the US passes its sanctions, he said, Russian-owned yachts must be in the country’s territorial waters in order for the US to take possession of them.
But he added that it can be hard, even for governments, to determine the true owner of a yacht, as they’re usually owned by offshore companies. Public speculation, however, could give enough reasonable belief that a Russian oligarch is the true owner, which he said could be sufficient for a seizure.
US efforts to confiscate these assets could raise questions of legality. “The threshold for seizing assets under sanctions is that the US has to be in armed conflict with the owner of the assets,” Brian O’Toole, an economic sanctions expert at the Atlantic Council, wrote on Twitter. “The idea of turning Russian corruption into Ukrainian assistance is lovely but this idea is illegal, period.”
Many Russian yacht-owning oligarchs have already set sail around the world in an attempt to outrun the many countries imposing sanctions. Consider the $100 million Titan, belonging to the industrial magnate Alexander Abramov (who has so far avoided the US sanctions list), which arrived in the Maldives on Monday. It’s not the only Russian-owned yacht that found refuge in the small island nation, which doesn’t have an extradition treaty with the US.
But Maltby thinks small island nations might not want to be seen colluding with Russian oligarchs to defeat sanctions and could choose to take action after the US’s moves.
As he put it, “Safe spaces are going to be few and far between.”
Read the original article on Business Insider
