Russian Oligarch Yachts; Ukrainian Solution

Can't the Italian authorities determine who's the UBO of either Diams Overseas and/or Bielor Assets? It's not that hard.

Oh, these webs are harder to untangle than you think, but they are on top of it and digging deep and I'm sure there will be some cases of taking them and putting the onus on the Oligarch to prove it's not his. This will not be "innocent until proven guilty" procedures.

The ownerships of the boats and other property are typically at least six levels deep and some much deeper plus lack of access to Russian records will make some nearly impossible to determine. However, the task forces handling this have a lot of experience doing such. I think ultimately the massive inconvenience and disturbance will have as much impact as any forfeitures.

Potentially, yes. The US can and will apply sanctions in four distinct categories: Individual, Entity (meaning business entity), Aircraft and Vessel. They can choose to sanction all of the categories simultaneously or in stages. But, as of this writing, Eugene Shvidler does not currently appear anywhere on the US Treasury's list of sanctioned individuals (the 'SDN List'). While the US sanctions list doesn't perfectly mirror the EU and UK lists, I would say the vast majority of the bigger fish are all replicated in these respective lists.

I don't know how they do business in Italy, but in the US he would be dragged in front of a grand jury, granted witness immunity if needed, and then forced to sing like a bird or sit in jail until he does. The US federal agency that enforces these sanctions and investigates their violations, are known as some of the most tenacious, indefatigable investigators in our federal government. Probably one of the many reasons no one flies a US flag on their yacht.

Finally able to read the NYT piece. So the Italian authorities basically started an investigation based on rumours and hearsay? How southern European of them.

Apart from that, seeing a shady website being quoted as an yacht expert, mentioning Scheherazade's pool/dance floor (perhaps they were confusing it with Graceful?), the "Marshall Islands-registered" company (which in fact is registered in the Isle of Man)... Let's also ignore the fact that M/Y Scheherazade screams "Gulf state" yacht.

Regarding the Russian crew bit: I can think of a couple of reasons - besides saving money - why the owner (probably a young prince or Sheihk) would like to be surrounded by Russians in a yacht but in this day and age it would be too misogynist to say it.

Lots of disappearing yachts:



(and suddenly unemployed crew in some cases)

This should serve as a warning to the Russian people, both rich and poor: their money is no longer welcome in the West and they should invest it in their own country instead.

Same thing with the frozen assets: if they get them back, they should sell them as soon as possible.

For many years wealthy Russians (and others) have benefited from the so called Golden Passport scheme. Under the scheme a person 'investing' in an EU country and paying a large fee could get, in effect buy, an EU Passport. It has long been a complaint that the bar for 'investment ' was too low and in many cases phony. The Dutch have long complained that in Malta setting up a company to own, flag and register your mega or giga yacht there was sufficient. Plus the fee of course. Many Russians did this. In 2020 the EU launched proceedings against Malta and Cyprus regarding infractions in this scheme. But this has until now proceeded slowly. Yesterday the European Parliament voted to end the practice outright (although this will take time) and to revoke the EU passports of Russians who are found to be under sanction which will also take time. Claimed one EU lawmaker "buying and flagging a yacht is not investing in a country'. English tabloids claim that Malta has raked in 168 million Euros in fees alone from this scheme. Recalling Somerset Maugham's famous description of Monaco as ' a sunny place for shady people' the Dutch lawmaker who tabled the motion claimed "this passport scheme has been a back door with a red carpet for shady people to enter the EU."

This is a universal practice. Every country has immigration deals for investment. People from every country have taken advantage. The most tempting offers we had made to us in Europe were in Croatia. (Waterfront condo would get you in). However, we met the Italian threshold and the French threshold, just didn't take advantage. US has raised requirements to $1 million but $500,000 for a Targeted Employment Area. There are restaurants in South Florida that have never shown a profit but have sold nicely several times under the program.

The problem with addressing this is most countries really like investment and hard to eliminate the bad guys without eliminating the good guys. Still, I just find it disturbing that money gives you the right and ability to bypass immigration laws those without money are subject to.

“This should serve as a warning to the Russian people, both rich and poor: their money is no longer welcome in the West and they should invest it in their own country instead.”

Investing in their own country is fraught with peril because you are investing in a corrupt system. America has its own problem with corruption but not to Russia’s level.

I am conflicted about the freezing of assets of average Russian citizens and of the whole idea of financial warfare. On the one hand it is better than bullets and missiles for settling our differences, but it certainly can wreak a lot of societal havoc. It is a slippery slope. It also concerns me that if the US makes this a habit then those affected are going to come up with workarounds. Which perhaps would lead to the dollar no longer being the world’s currency. Does America still have the financial might to throw it’s weight around? I am not convinced and even if it does is it the right thing to do. Boiling at all down war is about making the people suffer and Putin is certainly making others suffer. So perhaps the Russian people will have to pay the price for their leader’s ambitions. Just as we pay the price here for our governments decisions. the sanctions are hurting us as we speak.

I am aware that offering passports or other inducements to major investors is a common practice. I think the belief in the EU is that the bar in some countries is set too low and needs to be raised.. They are saying that setting up a management/ownership company, flagging a vessel and paying a fee is not an investment. So I think this practice will end and that will be the primary impact on the yachting industry. I agree with you that many countries and the EU will maintain some form of Golden Passport to attract major investors. The murky area will be for those who build yachts, (or condos or villas) in these countries and spend millions so doing. These folks are essentially customers. Is a 'customer' an 'investor'. I have no formed opinion on that nor any expertise to offer.