EU demands payment for parking of arrested Russian yachts
2022.10.20 03:26
EU demands payment for parking of arrested Russian yachts
By Ray Johnson
Budrigannews.com – Spain and France have authorized the owners of superyachts that have been frozen as a result of sanctions imposed on Russian businessmen to pay for their upkeep.
Following sanctions imposed following Russia’s invasion of Ukraine in February, six vessels were frozen in Spain. A person with knowledge of the situation stated that the “majority” of the owners are paying their insurance, crew, maintenance, and docking fees.
According to three sources, the Spanish and French governments are authorizing the payments in accordance with EU and national legislation, whereas individuals typically are prohibited from making financial transactions in jurisdictions where they are sanctioned.
According to a statement made by the Finance Ministry of Spain to Reuters, a law that was enacted in 2014 following Russia’s annexation of Crimea allows sanctioned individuals to make essential payments for the upkeep of assets. Payment authorization was not confirmed by the ministry.
The payments follow promises made by some Western governments to focus their efforts on punishing Moscow on the luxury assets of Russia’s allies, including President Vladimir Putin.
When Spain’s Prime Minister Pedro Sanchez announced the freezing of one yacht in March, he promised to “decisively” and “hardly” hit Putin’s allies.
Only one immobilized yacht has been sold thus far: In August, the Axioma was auctioned off in Gibraltar at the request of JP Morgan, a bank that owed money, rather than the government.
The United States of America and the European Union’s plans to donate the proceeds from the sale of seized Russian assets to Ukraine have stalled.
According to Spain’s Finance Ministry, a French maritime lawyer, and two representatives of frozen vessels in France, the decision to freeze rather than seize luxury assets believed to be owned by sanctioned Russians means that their running costs remain the owner’s responsibility.
According to James Jaffa, a lawyer with the British firm Jaffa & Co who specialized in yachts and represented Russian clients, non-payment of maintenance fees could enable creditors like shipyards to request that courts authorize the seizure and sale of a yacht to liquidate debts. Jaffa stated, “Sanctions do not appear to have the crippling effect that was intended.”
Ocibar, a port management company, stated that the Crescent and Lady Anastasia, two yachts moored at its facilities in Tarragona and Mallorca and frozen under Spanish sanctions, were making payments, including for docking and utility fees and a skeleton crew.
Ocibar said it was following the rules set by the government, but it wouldn’t say who the owners were or how much it would cost.
A government source told Reuters that Spanish authorities believe the Crescent is controlled by Eduard Khudainatov, a sanctioned former chief of Russian energy giant Rosneft. Contacted by Independent Oil and Gas, Khudainatov did not respond to requests for comment.
The public shipping database Equasis lists Homeland Shipping Limited as the owner of the Lady Anastasia. According to a person with knowledge of the situation, Spanish authorities believe that the company is controlled by Alexander Mikheev, the sanctioned head of the weaponry group Rosoboronexport.
Rosoboronexport contacted Mikheev, but he did not respond to requests for comment. Both the registered manager of the vessel and Homeland, who were contacted by a lawyer on its behalf, did not respond to Reuters’ inquiries.
Five yachts have been frozen in France. His attorney, Philippe Blanchetier, disclosed to Reuters that Alexey Kuzmichev, the sanctioned shareholder of Russia’s Alfa Bank, has been making payments for his two frozen vessels in Cannes and Antibes in accordance with a 2014 law of the European Union that permits payments for the maintenance of frozen property.
He added that Kuzmichev declined to comment. Due to procedural errors made during the yacht’s seizure, a court in Antibes ordered its release at the beginning of October. The second yacht is still up for grabs.
The French Finance Ministry said that EU rules allow payments, but it didn’t say if requests were approved.
