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Sanctioned Russian's superyacht docked in Dubai

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The West has shut Russia out of many American and European banks in response to the invasion of Ukraine.

One way wealthy and middle-class Russians, and businessmen close to Russian President Vladimir Putin, have circumvented the unprecedented sanctions Russia faces has been to send their money to the United Arab Emirates (UAE), the uberwealthy federation of seven semiautonomous, autocratic petro-states in the Persian Gulf that has chosen not to participate in US-led sanctions.

For years, sanctioned businessmen close to Putin have been investing big in the UAE’s luxury real estate, per leaked databases . In recent months, it has become a yacht sanctuary . More Russian private jets than ever are flying from Moscow to the UAE, according to the New York Times , and Russian billionaire Roman Abramovich parked his Dreamliner in Dubai . The Emirati national airlines, meanwhile, is one of the few that continues direct service from Russia . (The Emirates is also a longtime Russian mob hub and a longtime Russian tourist hub .)

“We can see where their yachts go, we can see where their aircraft are going, and it’s all going there,” said Jodi Vittori, an anti-corruption expert at the Carnegie Endowment for International Peace. “That’s just a one-stop shop for illicit finance.”

Dirty money from Putin’s inner circle has also flowed in London’s luxury real estate market and into the United Kingdom’s offshore economy , among other less-regulated global cities and markets, like art and cryptocurrency, that provide the shield of anonymity.

But this is dark money going into a dirty money hub. Though watchdog groups have tried to track the dollar amounts being sequestered in the Emirates, the secretive nature of transfers and that some are from lesser-known Russians who are not on sanctions lists makes the shape and scale of it difficult to map.

“The UAE is a big hole in the bucket,” Karen Greenaway, a former FBI agent, explained. “The movement of money — and we can’t see it — allows Russia to continue to run its economy and its war economy.”

Two former Treasury officials with experience working in the Middle East told me that’s a major problem. It’s among the reasons why, in March, the Financial Action Task Force, an intergovernmental standard-setting body based in Paris, gray-listed the UAE . That global watch list identifies countries with known money laundering and illicit financing. Now, international financial institutions that operate there need to monitor transactions more carefully. Those risks could bruise the UAE’s robust economy. In response, experts told me that the UAE is trying to implement reforms, to get off the gray list and to improve its standing. A spokesperson for the UAE’s anti-money laundering and anti-terrorism financing office said in a statement, “The UAE has already adopted a series of tangible measures to expand engagement with the Financial Action Task Force (FATF) and enact effective national reforms.”

But as Russians flee to the UAE and send their money there, the Biden administration is only drawing the Emirati leadership closer to Washington. During his Middle East trip in July, President Joe Biden invited Emirati President Mohammed bin Zayed al-Nahyan to the Oval Office . So how is it that the UAE is able to get away with being a destination of choice for Russian cash while maintaining such a tight relationship with the US?

How the Emirati system allows this to happen

The Emirates is a global financial center that is built on freewheeling regulations. “Dubai basically started out as a pirate cove,” Sarah Chayes, author of the book Thieves of State: Why Corruption Threatens Global Security , said. Several dozen financial free zones and free trade zones provide havens for foreign money to avoid taxes, and the country’s loose regulations make it a particularly fruitful place for expats and foreign companies. There is no income tax; value-added tax was only introduced in 2018 ; and its first corporate tax regime is set for 2023.

Dubai has become home to illicit finance and other valuables like gold, art, and, more recently, crypto. Chayes recalled seeing what appeared to be heavy suitcases full of cash arriving in the UAE’s airport from Afghanistan when she was working as an adviser to the Pentagon, and later learned that millions in cash was coming into the UAE from Afghanistan per year.

It’s a center for American and international companies, often their base and port of call for Middle East business. There’s also the golden visa program , where luxury property buyers can get extended Emirati residence permits (which are short of impossible for international laborers to receive).

A former Treasury official, speaking on the condition of anonymity, explained that the UAE being a conduit for sanctions evasion is nothing new. “The laissez-faire attitude has benefited them economically,” they said. “It’s something that’s pretty openly notorious.” It’s a known risk that strategic consultants advise clients on.

And there are indicators that UAE officials are ignoring corruption. US financial officials file millions of suspicious activity reports annually as they monitor money flows within banking institutions, for example. But Lakshmi Kumar of Global Financial Integrity has noted that the UAE’s free zones, for example, post a suspiciously low number of such reports. She thinks the UAE is not monitoring suspicious activity in a comparable way to similarly sized economies.

“The lack of numbers can tell an evocative and effective story,” she told me. “The reason [the Emirati economy is] allowed to have that freedom and comfort to operate is because there is no stick on the other end.”

The enforcement issue may have to do with leadership. The UAE doesn’t have democratic institutions or independent agencies, and many courts, law enforcement, and executive agencies are run by members of the royal family. “I think that ultimately one other reason why the Emirates really aren’t interested in doing anything about Russian oligarchs is because they have their own oligarchs,” Greenaway said.

Dissent is not tolerated , prison sentences are harsh , and high-tech surveillance is widespread . As Vittori told me, “This is one of the world’s most significant surveillance states as far as we can tell.”

Despite the apparent corruption and the UAE’s implicit support to one of the US’s chief adversaries, the Emirates holds a prominent position in Washington. Experts told me what the UAE brings to bear — in terms of cooperation on counterterrorism and its 2020 accord with Israel after decades without diplomatic relations — is just too important for US policymakers to prioritize accountability on other issues.

“The US has helped bring the UAE and Israel and its neighbors together, but we want to make sure that the US stays at the table,” Michael Greenwald, a former senior Treasury official, told me.

It’s also worth noting that it took more than a decade for the UAE to deal with terrorist financing. That suggests that, even absent the political will needed, it could take time to build up an infrastructure to monitor Russian dark money.

“The entire architecture built up against ISIS and al-Qaeda terrorists was not going to be successful in going after Russian oligarchs,” a former senior intelligence official, who spoke on the condition of anonymity, told me. “We built a door to stop horses from escaping, but now we have different animals altogether.”

What could the US do about Russian dirty money in the UAE?

The urgent need to stop corruption was a central tenet of a speech that senior Treasury official Elizabeth Rosenberg delivered to Arab bankers in February this year.

“Nearly every act of corruption flows through the formal financial system, the system we are all a part of, which means all of us have the ability — and the responsibility — to stop it,” she said . Much as the US clamped down on terrorist financing internationally after the September 11, 2001, attacks, she explained, the US would now focus on corruption. But two weeks later, Russia invaded Ukraine — and since then, the messaging has shifted.

When Deputy Treasury Secretary Wally Adeyemo visited the United Arab Emirates and met with bankers in June, the word “corruption” was absent from his remarks. He did tell an Emirati newspaper, however, that he had raised the issue of Russians using the UAE financial sector in his meetings.

“I’m here today to thank those who have cooperated in this effort and to underscore the need for your vigilance and proactive action in combatting Russian sanctions evasion, including in the UAE,” Adeyemo told bankers . (An Emirati delegation visited Washington in early July to discuss cooperation.)

Nothing as strongly worded came out following President Joe Biden’s meeting with the UAE president during his recent Middle East trip. Russia did not appear in a US-UAE joint statement that came out of that conversation, but the document says, “President Biden recognized the UAE’s efforts to strengthen its policies and enforcement mechanisms in the fight against financial crimes and illicit money flows.” Earlier that day, a senior Biden administration official evaded a question on the UAE as a haven for Russian money and emphasized that the UAE voted on the right side of a United Nations General Assembly vote against Russia.

But the Biden administration recognizes that the UAE has become an alternate financial hub for sanctions-busters.

As Barbara Leaf, the State Department’s top Middle East diplomat who served as ambassador to the UAE from 2015 to 2017, put it in a recent congressional hearing, “As far as the UAE, I am not happy, I am not happy at all with the record at this point, and I plan to make this a priority, to drive to a better alignment, shall we say, of effort.”

The question then becomes: What would making it a priority look like?

After being gray-listed, the UAE’s Executive Office of Anti-Money Laundering and Counter Terrorism Finance promised to initiate new inspections of institutions , “with the aim of achieving full compliance with Financial Action Task Force (FATF)’s international standards.”

The gray-listing was a wake-up call, and Emirati financial authorities are more carefully monitoring daily financial transactions, according to a business consultant based in the Emirates, who would only speak anonymously. “The central bank is really cracking down,” they told me, “because senior financial officials here are actually worried about the reputation.”

“The UAE is actively building on the significant progress made to date,” the spokesperson for the anti-money laundering office said. “Looking ahead, the UAE will continue to develop its ability to detect, investigate and understand money laundering and terrorist financing, and advance financial crime compliance frameworks within the country and around the world.”

This is a start, but anticorruption experts seek a more systemic reckoning. The lack of political will on the Emirati side is the unanimous answer for why so little has been done to reform. And the lack of appetite on the US side helps explain why the US has not put pressure on the Emiratis.

Few countries in the Washington ecosystem have as influential boosters as the Emirates. On the UAE embassy’s social media, for example, former general and Trump administration Defense Secretary James Mattis touts how great the country is.

“The US will probably not take any serious steps to punish the UAE for this,” says Giorgio Cafiero of the consulting firm Gulf State Analytics. “Because the country has a very liberal veneer, and a narrative of being a tolerant country. It also is a country that does a lot of lobbying in Washington, for many reasons, the UAE escapes criticism in the US.”

In fact, the United Arab Emirates was the honored guest of the Smithsonian Folklife Festival this year on Washington’s National Mall. The country is so good at wins, while flouting the rules.

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Sanctioned Russian oligarch yacht in Dubai as pressure grows

Emirates oligarch's yacht.

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DUBAI, United Arab Emirates (AP) — A sleek $156 million superyacht belonging to a sanctioned Russian oligarch and parliamentarian is now docked in Dubai, the latest reminder of how the skyscraper-studded sheikhdom has become a haven for Russian money amid Moscow's war on Ukraine.

The 98-meter (324-foot) Madame Gu, which has a helicopter pad, gym, beach club and elevator, remained moored off Dubai's Port Rashid on Thursday in what has become a test for the close partnership between the United States and United Arab Emirates.

The vessel, with an eye-catching blue hull and $1 million annual paint job price tag, is owned by Andrei Skoch, one of the wealthiest men in Russia's Duma. A steel magnate, Skoch's fortune is valued at about $6.6 billion, according to Forbes. Attempts to reach Skoch for comment were not successful.

Like sanctioned Russian billionaire Andrey Melnichenko’s Motor Yacht A docked in the northern emirate of Ras al-Khaimah , the appearance of the Madame Gu in Dubai shows how Russian oligarchs have parked their assets in the UAE even as Western governments increasingly enforce sanctions and American pressure mounts on its Gulf Arab ally to follow suit.

The U.S. Treasury first sanctioned Skoch in 2018 over his role in government and alleged “longstanding ties to Russian organized criminal groups, including time spent leading one such enterprise.” Earlier this month, the Treasury designated the Madame Gu, along with its helicopter, barring American entities from conducting business with the superyacht. Skoch is also sanctioned by the European Union.

The Madame Gu, registered in the Cayman Islands, flew an Emirati flag on Thursday when Associated Press journalists observed the ship — a show of wealth dramatic enough to rival the Dubai’s famed Queen Elizabeth 2 cruise ship-turned-hotel floating just beside it. It also was moored just next to the $200 million megayacht Dubai, owned by the city-state's ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Satellite photos from Planet Labs PBC show the Madame Gu at its berth at Port Rashid beginning from March 25.

The UAE, home to glitzy Dubai and oil-rich Abu Dhabi, has declined to take sides in Moscow's war and welcomed the influx of Russian money to its beach-front villas and luxury hotels. The UAE's Foreign Ministry did not immediately respond to a request for comment.

The invasion of Ukraine sent Russia’s richest businessmen and politicians scrambling to save their significant assets from what became a widening dragnet. Superyachts tied to Russian oligarchs have taken on outsized significance in the Western crackdown that aims to exert pressure on President Vladimir Putin to change course in Ukraine.

Authorities across Europe and elsewhere have seized yachts owned by sanctioned Russian billionaires on a U.S. sanctions list. Earlier this month for instance, the U.S. won a legal battle in Fiji to confiscate a $325 million Russian-owned superyacht.

Other U.S. allies, including Germany, the United Kingdom, France and Italy, are involved in trying to collect and share information with Washington against Russians targeted for sanctions, the White House says.

One of a shrinking number of countries where Russians can still fly directly, the UAE has chosen not to impose sanctions on Moscow or freeze the assets of Russian billionaires relocating to the emirate.

An apparent influx of superyachts and private planes tied to Russian's wealthy so far have avoided scrutiny in a country that has long been a magnet for foreign money — legal and otherwise .

But their increasingly visible presence appears to be frustrating Washington.

This month, a U.S. court ordered the seizure of two aircraft worth over $400 million believed to be owned by sanctioned Russian oligarch Roman Abramovich. The former Chelsea soccer club owner’s Boeing 787 Dreamliner is now in the UAE, the court filing said.

In a House hearing Wednesday, U.S. Assistant Secretary of State for Near Eastern Affairs Barbara Leaf acknowledged the UAE had become a safe haven for Russian oligarchs linked to Putin.

“I’m not happy at all with the record at this point and I plan to make this a priority to drive to a better alignment, shall we say, of effort,” said Leaf, who once served as an ambassador to the UAE.

Deputy Treasury Secretary Wally Adeyemo, one of the main U.S. coordinators on the Russian sanctions strategy, visited Dubai and Abu Dhabi to meet with Emirati financial officials this week.

During a banking round table, he pleaded for increased vigilance.

“Despite this commitment (to prevent money laundering), the UAE — and other global financial hubs — continue to face the threat of illicit financial flows," he said, according to readout from the Treasury Department.

Adeyemo warned of challenges that have emerged amid the war on Ukraine “for both governments seeking to hold Russia accountable and for financial institutions like yours that are responsible for implementing the financial sanctions we impose.”

Associated Press writer Jon Gambrell in Dubai, United Arab Emirates, contributed to this report.

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Sanctioned Russian oligarch yacht in Dubai as pressure grows

A sleek $156 million superyacht belonging to a sanctioned Russian oligarch and parliamentarian is now docked in Dubai, the latest reminder of how the skyscraper-studded sheikhdom has become a haven for Russian money amid Moscow's war on Ukraine.

The 98-meter (324-foot) Madame Gu, which has a helicopter pad, gym, beach club and elevator, remained moored off Dubai's Port Rashid on Thursday in what has become a test for the close partnership between the United States and United Arab Emirates.

The vessel, with an eye-catching blue hull and $1 million annual paint job price tag, is owned by Andrei Skoch, one of the wealthiest men in Russia's Duma. A steel magnate, Skoch's fortune is valued at about $6.6 billion, according to Forbes. Attempts to reach Skoch for comment were not successful.

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Like sanctioned Russian billionaire Andrey Melnichenko's Motor Yacht A docked in the northern emirate of Ras al-Khaimah, the appearance of the Madame Gu in Dubai shows how Russian oligarchs have parked their assets in the UAE even as Western governments increasingly enforce sanctions and American pressure mounts on its Gulf Arab ally to follow suit.

The U.S. Treasury first sanctioned Skoch in 2018 over his role in government and alleged "long-standing ties to Russian organized criminal groups, including time spent leading one such enterprise." Earlier this month, the Treasury designated the Madame Gu, along with its helicopter, barring American entities from conducting business with the superyacht. Skoch is also sanctioned by the European Union.

The Madame Gu, registered in the Cayman Islands, flew an Emirati flag on Thursday when Associated Press journalists observed the ship – a show of wealth dramatic enough to rival the Dubai's famed Queen Elizabeth 2 cruise ship-turned-hotel floating just beside it. It also was moored just next to the $200 million megayacht Dubai, owned by the city-state's ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Satellite photos from Planet Labs PBC show the Madame Gu at its berth at Port Rashid beginning from March 25.

The UAE, home to glitzy Dubai and oil-rich Abu Dhabi, has declined to take sides in Moscow's war and welcomed the influx of Russian money to its beachfront villas and luxury hotels. The UAE's Foreign Ministry did not immediately respond to a request for comment.

The invasion of Ukraine sent Russia's richest businessmen and politicians scrambling to save their significant assets from what became a widening dragnet. Superyachts tied to Russian oligarchs have taken on outsized significance in the Western crackdown that aims to exert pressure on President Vladimir Putin to change course in Ukraine.

Authorities across Europe and elsewhere have seized yachts owned by sanctioned Russian billionaires on a U.S. sanctions list. Earlier this month for instance, the U.S. won a legal battle in Fiji to confiscate a $325 million Russian-owned superyacht.

Other U.S. allies, including Germany, the United Kingdom, France and Italy, are involved in trying to collect and share information with Washington against Russians targeted for sanctions, the White House says.

One of a shrinking number of countries where Russians can still fly directly, the UAE has chosen not to impose sanctions on Moscow or freeze the assets of Russian billionaires relocating to the emirate.

An apparent influx of superyachts and private planes tied to Russian's wealthy so far have avoided scrutiny in a country that has long been a magnet for foreign money – legal and otherwise.

But their increasingly visible presence appears to be frustrating Washington.

This month, a U.S. court ordered the seizure of two aircraft worth over $400 million believed to be owned by sanctioned Russian oligarch Roman Abramovich. The former Chelsea soccer club owner's Boeing 787 Dreamliner is now in the UAE, the court filing said.

In a House hearing Wednesday, U.S. Assistant Secretary of State for Near Eastern Affairs Barbara Leaf acknowledged the UAE had become a safe haven for Russian oligarchs linked to Putin.

"I'm not happy at all with the record at this point and I plan to make this a priority to drive to a better alignment, shall we say, of effort," said Leaf, who once served as an ambassador to the UAE.

Deputy Treasury Secretary Wally Adeyemo, one of the main U.S. coordinators on the Russian sanctions strategy, visited Dubai and Abu Dhabi to meet with Emirati financial officials this week.

During a banking roundtable, he pleaded for increased vigilance.

"Despite this commitment (to prevent money laundering), the UAE – and other global financial hubs – continue to face the threat of illicit financial flows," he said, according to readout from the Treasury Department.

Adeyemo warned of challenges that have emerged amid the war on Ukraine "for both governments seeking to hold Russia accountable and for financial institutions like yours that are responsible for implementing the financial sanctions we impose."

Associated Press writer Jon Gambrell in Dubai, United Arab Emirates, contributed to this report.

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Yacht of wealthiest Russian oligarch docked in haven Dubai

The Nirvana, a sleek 88-meter-long superyacht worth about $300 million, owned by Vladimir Potanin, head of the world’s largest refined nickel and palladium producer in Russia, is docked at Port Rashid terminal in Dubai, United Arab Emirates, Tuesday, June 28, 2022. Potanin, the man considered to be the wealthiest oligarch in Russia, joins a growing list of those transferring — or, sailing — their prized assets to Dubai as the West tightens its massive sanctions program. Potanin may not be sanctioned by the United States or Europe yet; such sanctions could roil metal markets and potentially disrupt supply chains, experts say. (AP Photo/Kamran Jebreili)

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DUBAI, United Arab Emirates (AP) — The man considered to be the wealthiest oligarch in Russia, who has been photographed playing ice hockey with President Vladimir Putin, joins a growing list of those transferring — or, sailing — their prized assets to Dubai as the West tightens its massive sanctions program on Russia’s economy.

Vladimir Potanin, head of the world’s largest refined nickel and palladium producer, may not be sanctioned by the United States or Europe yet; such sanctions could roil metal markets and potentially disrupt supply chains, experts say. As the biggest shareholder in mining company Nornickel, Potanin had a personal fortune of $30.6 billion before the war on Ukraine, according to Forbes.

But like an increasing number of blacklisted Russian oligarchs, he has apparently taken the precaution of moving his $300 million superyacht to the safe haven of Dubai, in the U.S.-allied United Arab Emirates.

It is called the Nirvana, and the sleek 88-meter-long (289-foot-long) superyacht, equipped with a glass elevator, gym, hot tub, 3D cinema and two terrariums of exotic reptiles, stands out even in a port full of flashy, floating mansions.

The giant Dutch-built vessel with a navy blue hull was docked on Tuesday flying the flag of the Cayman Islands when Associated Press journalists observed the ship at Dubai’s Port Rashid — in the eyeshot of sanctioned Russian parliamentarian Andrei Skoch’s $156 million Madame Gu .

Representatives for Potanin did not immediately respond to a request for comment.

The arrival of Russian-owned luxury vessels in Dubai has become an outsized symbol of the UAE’s reluctance to oppose Moscow’s war on Ukraine and enforce Western sanctions. One of a shrinking number of countries where Russians can still fly directly, the financial center has become a thriving hub for Russia’s rich, in part because of its reputation for welcoming money from anywhere — both legitimate and shady .

“They haven’t tried to hide the fact they’re accepting oligarchs themselves and their yachts,” said Julia Friedlander, a former senior policy adviser for Europe in the U.S. Treasury’s Office of Terrorism and Financial Intelligence. “When it comes to taking sides in the conflict, it’s not in their political interest to do so. They want to keep their access to money from around the world.”

The UAE Foreign Ministry did not immediately respond to a request for comment.

The Emirati stance has stoked tensions with the United States, which has sought to pressure its Gulf Arab ally to help combat Russian sanctions evasion. Deputy Treasury Secretary Wally Adeyemo, one of the main U.S. coordinators on the Russian sanctions strategy, visited the UAE last week to voice American concerns about Russian financial flows and demand increased vigilance.

Still, there’s no indication that President Joe Biden will impose secondary sanctions, leaving Washington with few pressure points.

As Moscow’s war on Ukraine grinds on, Western economic sanctions have proliferated in an effort to pressure Putin to change course. The European Union has captured billions of dollars in art, yachts and property. Britain, Fiji, Italy, Spain and other countries have impounded oligarchs’ yachts . The U.S. has seized vessels and aircraft.

Some prominent oligarchs, however, have escaped the blacklist because of their strategic holdings. Although Potanin has been hit with Canadian and Australian sanctions for his close ties to the Kremlin, his reputation as the “King of Nickel” has so far spared him.

“We’re reaching a critical metal shortage and we don’t know where those supply chains are headed, so you have to ask, would sanctioning him make things worse?” Friedlander said. “Those are serious considerations.”

How a Playground for the Rich Could Undermine Sanctions on Oligarchs

Allies of President Vladimir Putin, arriving on private jets and yachts, are still welcome in the U.A.E., which has yet to condemn the Ukraine invasion or enforce sanctions.

At least 38 businessmen or officials linked to Russia’s president own dozens of properties in Dubai collectively valued at more than $314 million. Credit... Christopher Pike/Bloomberg

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By David D. Kirkpatrick ,  Mona El-Naggar and Michael Forsythe

• March 9, 2022

Stretching into the Persian Gulf from the beaches and skyscrapers of Dubai is a man-made archipelago in the shape of a vast palm tree, its branchlike rows of islands lined with luxury hotels, apartments and villas.

Among the owners of those homes are two dozen close allies of President Vladimir V. Putin of Russia, including a former provincial governor and nuclear power plant manager, a construction magnate and former senator, and a Belarusian tobacco tycoon.

At least 38 businessmen or officials linked to Mr. Putin own dozens of properties in Dubai collectively valued at more than $314 million, according to previously unreported data compiled by the nonprofit Center for Advanced Defense Studies. Six of those owners are under sanctions by the United States or the European Union, and another oligarch facing sanctions has a yacht moored there. For now, they can count themselves lucky.

Since the invasion of Ukraine, much of the world has imposed sweeping sanctions on Russian financial institutions and the circle around Mr. Putin, and even notoriously secretive banking centers like Switzerland, Monaco and the Cayman Islands have begun to cooperate with the freezing of accounts, seizing of mansions and impounding of yachts.

But not Dubai, the cosmopolitan resort and financial center in the United Arab Emirates. Although a close partner to Washington in Middle Eastern security matters, the oil-rich monarchy has in recent years also become a popular playground for the Russian rich, in part because of its reputation for asking few questions about the sources of foreign money. Now the Emirates may undercut some of the penalties on Russia by continuing to welcome targeted oligarchs.

“Sanctions are only as strong as the weakest link,” said Adam M. Smith, a lawyer and former adviser to the U.S. Treasury Department office that administers such measures. “Any financial center that is willing to do business when others are not could provide a leak in the dike and undermine the overall measures.”

The Emirati stance is exposing tensions between the United States and several of its closest Arab allies over their reluctance to oppose the Russian invasion. Asked for solidarity in a moment of crisis, the United Arab Emirates, Saudi Arabia and Egypt have instead prioritized relations with Moscow — the Emirates and Saudi Arabia by rebuffing American pleas for increased oil supplies to soothe energy markets, Egypt by muffling criticism of the invasion while proceeding with a $25 billion loan from Russia to finance a nuclear power plant.

“It should be a clarifying moment,” said Michael Hanna, U.S. program director for the nonprofit International Crisis Group. “That has to be pretty bracing.”

The U.A.E. may be the most conspicuous in its position, if only because it currently holds a rotating seat on the United Nations Security Council. The Emiratis abstained from an American-backed resolution denouncing the invasion, declining to criticize Russia. And Emirati officials have reassured Russians that their authorities will not enforce sanctions unless mandated by the United Nations — where Moscow’s veto ensures against it.

“If we are not violating any international laws, then nobody should blame Dubai, or the U.A.E., or any other country for trying to accommodate whoever comes in a legitimate way,” said Abdulkhaleq Abdulla, a political analyst close to the U.A.E.’s rulers. “So what’s the big deal? I don’t see why the West would complain.”

Russians in Dubai say they appreciate the hospitality. “Having a Russian passport or Russian money now is very toxic — no one wants to accept you, except places like Dubai,” said a Russian businessman who took refuge there, speaking on the condition of anonymity for fear of alienating Emirati authorities. “There’s no issue with being a Russian in Dubai.”

He shared an electronic invitation circulating among Russians in the city: a rooftop cocktail party for venture capitalists and cryptocurrency start-ups. (The Treasury Department on Monday warned banks to watch for Russians using cryptocurrency to evade sanctions.)

An Arab businessman who rents high-end furnished apartments in Dubai described “incredible demand” from Russians since the invasion, with one family taking an indefinite lease on a three-bedroom waterfront apartment for $15,000 a month and more than 50 other individuals or families seeking accommodations.

The Center for Advanced Defense Studies, a Washington-based nonprofit that collects data on global conflicts, found that Putin allies owned at least 76 properties in Dubai, either directly or under the name of a close relative, and said that there were likely many others who could not be identified.

The center’s list of those under sanctions includes: Aleksandr Borodai, a Duma member who acted as prime minister of a Ukrainian province in 2014 when it was taken over by Russian-backed separatists; Bekkhan Agaev, a Duma member whose family owns a petroleum company; and Aliaksey Aleksin, the Belarusian tobacco titan. A handful of oligarchs on the list own homes valued at more than $25 million each.

Maritime records show that in recent days the yacht belonging to the sanctioned oligarch Andrei Skoch, a steel magnate and Duma member, has been moored off Dubai.

A Bombardier business jet owned by Arkady Rotenberg, another Russian billionaire under sanctions, landed on Friday, and the planes and boats of other oligarchs discussed as possible targets have been coming and going, too. The yachts of at least three other oligarchs are currently docked in Dubai. The 220-foot vessel of a Russian metals magnate appears to be en route from the Seychelles. The Boeing 787 Dreamliner owned by Roman Abramovich, the Russian-born owner of Britain’s Chelsea soccer team, took off from the airport on Friday. A 460-foot superyacht belonging to another oligarch set sail the same day; he was added to Europe’s sanctions list on Wednesday.

Moscow has been quietly building closer ties to the U.A.E. and other Western-leaning Arab states for a decade, seeking to capitalize on complaints about Washington.

The autocrats who dominate the region were outraged by Washington’s statements of support for the Arab uprisings in 2011. The Arab monarchs of the Persian Gulf cried betrayal at the Obama administration’s deal with their adversary Iran over its nuclear program. Their frustration only grew when the Trump administration did nothing to retaliate for a series of apparent Iranian attacks against them.

Now people close to those rulers say that their neutral responses to the invasion of Ukraine should teach Washington not to take them for granted.

“The automatic expectation in D.C. is that ‘you Saudis now must jump on the bandwagon and isolate Russia as we have,’” said Ali Shihabi, a Saudi political analyst close to the royal court, but the kingdom cannot “burn” its relationship with Russia just to please the White House.

“Our relationship is there with the Americans,” he added, “but it is not going to be a monogamous relationship because the Americans are unreliable.”

Others noted that the Kremlin had overlooked human rights abuses that Washington often criticized, and that relations with an alternative power gave the Arab states more leverage. “It’s useful for Arab countries to take this stance,” said Mustapha Al-Sayyid, a political science professor at Cairo University.

Russia has sold weapons to all three countries, and a few Saudi military officers have begun training in Russia . Egypt and the U.A.E. have cooperated with Russia for several years in Libya, where all three have backed the same strongman in Eastern Libya in his conflict with the U.N.-backed government. Egypt provided bases near the border, the U.A.E. sent fighter planes and Russia deployed mercenaries.

Crown Prince Mohammed bin Zayed, the de facto ruler of the United Arab Emirates, visited Moscow at least six times between 2013 and 2018. When Mr. Putin visited the Emirati capital, Abu Dhabi, the next year, the city lit up landmarks in Russian colors and repainted its police cars with Russian banners and Cyrillic script.

Other entanglements bind their interests too, including the ongoing civil war in Yemen pitting partisans backed by Saudi Arabia and the United Arab Emirates against others favored by Iran.

During a U.N. Security Council session last week, Russia unexpectedly supported an Emirati resolution to label the Iranian-backed fighters “terrorists.” Analysts sympathetic to the U.A.E. argued that it had won Moscow’s backing in part by abstaining from the resolution denouncing the Ukraine invasion.

Russia, though, has also used financial ties to pull the Gulf Arabs closer, partly through its state-controlled Russian Direct Investment Fund and its chief executive, Kirill Dmitriev, who last week was added to the sanctions list.

Created in 2011 to lure foreign capital to invest in Russia in partnership with its government, the fund initially courted Wall Street. Mr. Dmitriev, a Russian with degrees from Stanford University and the Harvard Business School, had once worked at a U.S. government-sponsored fund to invest in the former Soviet Union. For the Russian fund, he recruited an advisory board that included Stephen Schwarzman of the Blackstone Group and Leon Black of Apollo Global Management.

But the American financiers and money fled when Russia invaded Crimea in 2014. So Mr. Dmitriev turned east — securing investments worth more than $5 billion from the U.A.E. and more than $10 billion from Saudi Arabia. He also acted as an informal Russian envoy to the Gulf monarchs, talking foreign policy as well as money.

Mr. Dmitriev’s double role became especially clear after the 2016 U.S. presidential election. The Mueller report on Russian interference in the vote detailed how he had worked with Emirati leaders to try to connect on behalf of the Kremlin with those around Donald J. Trump — eventually preparing a short plan for “reconciliation” with Russia and getting it into the hands of Jared Kushner, the former president’s son-in-law and adviser, who shared it with top White House officials.

Rich Russians, though, have reasons other than geopolitics to buy property in Dubai. The sheikhs who ruled the city-state have long sought to attract business by allowing a high degree of secrecy about asset ownership and by sharing only limited information with other jurisdictions, said Maíra Martini, a researcher with Transparency International, which campaigns against corruption.

“Dubai has been a key player in most of the big corruption or money-laundering schemes in recent years,” she said, citing recent scandals involving Russian businessmen, the daughter of Angola’s former president, top Namibian fishing regulators and South Africa’s Gupta family.

Citing such failings, the Financial Action Task Force, an influential money-laundering watchdog, on Friday put the United Arab Emirates on its “gray” list.

A thriving colony of Russians in Dubai has made it a welcoming alternative to oligarch gathering spots like London’s Kensington neighborhood or the French Riviera. The Russian Business Council , a Dubai-based nonprofit, estimates that there are about 3,000 Russian-owned Emirati companies. The Russian embassy in the United Arab Emirates has said that about 100,000 Russian-speakers live in the country. About a million Russians visit each year. A Russian broadcaster, Tatiana Vishnevskaya , has built a career out of promoting life and commerce in Dubai. New real estate developments pop up “like mushrooms on a sunny day after the rain,” she recently told a tourism industry website.

A Russian company, the Bulldozer Group, owns a dozen upscale restaurants and nightclubs in Dubai, including the local Cipriani outpost. Caviar Kaspia, a French-Russian night spot, boasts of the “largest Vodka selection in Dubai.”

As in the current campaign against Russia, Dubai resisted earlier American-led sanctions against Iran, starting in 2006. Although the United Arab Emirates and Iran are opponents in regional politics, Dubai and Iran sit a short boat ride away across the Strait of Hormuz, and share trade and family ties going back centuries.

But after six years, pressure from Washington and the emirate of Abu Dhabi forced greater compliance on sanctions from Dubai’s big financial institutions, said Esfandyar Batmanghelidj, an economist at the European Council on Foreign Relations. Yet since 2019, when Abu Dhabi began reopening diplomatic contacts with Tehran, Emirati trade with Iran has quietly risen again, he said.

“They can calibrate it and turn it up and down,” Mr. Batmanghelidj added.

Emirati officials, seeking to get off the money-laundering “gray” list, are already pledging new transparency measures. Those steps could also limit the ability of sanctioned oligarchs to hide assets or move money in Dubai.

Cutting some Russian institutions off the international system for electronic bank transfers, called SWIFT, has already made it harder for them to do business with Dubai. And if Washington threatens to restrict Emirati access to the American financial system — as during the early years of the Iran sanctions — that could motivate the Emiratis to cooperate more.

Still, Washington often weighs its partnerships in military and intelligence matters against other priorities, including the enforcement of sanctions.

“The question,” said David H. Laufman, a lawyer who previously worked as a senior official in the national security division of the Justice Department, “is going to be how hard the Biden administration leans on the U.A.E. to get with the program.”

Sarah Hurtes contributed reporting.

David D. Kirkpatrick is an investigative reporter based in New York and the author of “Into the Hands of the Soldiers: Freedom and Chaos in Egypt and the Middle East.“ In 2020 he shared a Pulitzer Prize for reporting on covert Russian interference in other governments and as the Cairo bureau chief from 2011 to 2015 he led coverage of the Arab Spring uprisings. More about David D. Kirkpatrick

Mona El-Naggar is an international correspondent, based in Cairo. She writes and produces stories that cover politics, culture, religion, social issues and gender across the Middle East. More about Mona El-Naggar

Michael Forsythe is a reporter on the investigations team. He was previously a correspondent in Hong Kong, covering the intersection of money and politics in China. He has also worked at Bloomberg News and is a United States Navy veteran. More about Michael Forsythe

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Sanctioned Russian oligarch yacht in Dubai as pressure grows

A sleek $156 million superyacht belonging to a sanctioned russian oligarch and parliamentarian is now docked in dubai, the latest reminder of how the skyscraper-studded sheikhdom has become a haven for russian money amid moscow’s war on ukraine, article bookmarked.

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A sleek $156 million superyacht belonging to a sanctioned Russian oligarch and parliamentarian is now docked in Dubai , the latest reminder of how the skyscraper-studded sheikhdom has become a haven for Russian money amid Moscow 's war on Ukraine .

The 98-meter (324-foot) Madame Gu, which has a helicopter pad, gym, beach club and elevator, remained moored off Dubai's Port Rashid on Thursday in what has become a test for the close partnership between the United States and United Arab Emirates.

The vessel, with an eye-catching blue hull and $1 million annual paint job price tag, is owned by Andrei Skoch, one of the wealthiest men in Russia's Duma. A steel magnate, Skoch's fortune is valued at about $6.6 billion, according to Forbes. Attempts to reach Skoch for comment were not successful.

Like sanctioned Russian billionaire Andrey Melnichenko’s Motor Yacht A docked in the northern emirate of Ras al-Khaimah, the presence of Madame Gu in Dubai shows how Russian oligarchs have parked their assets in the UAE even as Western governments increasingly enforce sanctions and American pressure mounts on its Gulf Arab ally to follow suit.

The U.S. Treasury first sanctioned Skoch in 2018 over his role in government and alleged “longstanding ties to Russian organized criminal groups, including time spent leading one such enterprise.” Earlier this month, the Treasury designated the Madame Gu, along with its helicopter, barring American entities from conducting business with the superyacht. Skoch is also sanctioned by the European Union.

The Madame Gu, registered in the Cayman Islands, flew an Emirati flag on Thursday when Associated Press journalists observed the ship — a show of wealth dramatic enough to rival the Dubai’s famed Queen Elizabeth 2 cruise ship-turned-hotel floating just beside it. It also was moored just next to the $200 million megayacht Dubai, owned by the city-state's ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Satellite photos from Planet Labs PBC show the Madame Gu at its berth at Port Rashid beginning from March 25.

The UAE, home to glitzy Dubai and oil-rich Abu Dhabi, has declined to take sides in Moscow's war and welcomed the influx of Russian money to its beach-front villas and luxury hotels. The UAE's Foreign Ministry did not immediately respond to a request for comment.

The invasion of Ukraine sent Russia’s richest businessmen and politicians scrambling to save their significant assets from what became a widening dragnet. Superyachts tied to Russian oligarchs have taken on outsized significance in the Western crackdown that aims to exert pressure on President Vladimir Putin to change course in Ukraine.

Authorities across Europe and elsewhere have seized yachts owned by sanctioned Russian billionaires on a U.S. sanctions list. Earlier this month for instance, the U.S. won a legal battle in Fiji to confiscate a $325 million Russian-owned superyacht.

Other U.S. allies, including Germany, the United Kingdom, France and Italy, are involved in trying to collect and share information with Washington against Russians targeted for sanctions, the White House says.

One of a shrinking number of countries where Russians can still fly directly, the UAE has chosen not to impose sanctions on Moscow or freeze the assets of Russian billionaires relocating to the emirate.

The superyachts and private planes tied to Russian's wealthy so far have avoided scrutiny in a country that has long been a magnet for foreign money — legal and otherwise.

But their increasingly visible presence appears to be frustrating Washington.

In a House hearing Wednesday, U.S. Assistant Secretary of State for Near Eastern Affairs Barbara Leaf acknowledged the UAE had become a safe haven for Russian oligarchs linked to Putin.

“I’m not happy at all with the record at this point and I plan to make this a priority to drive to a better alignment, shall we say, of effort,” said Leaf, who once served as an ambassador to the UAE.

Deputy Treasury Secretary Wally Adeyemo, one of the main U.S. coordinators on the Russian sanctions strategy, visited Dubai and Abu Dhabi to meet with Emirati financial officials this week.

During a banking round table, he pleaded for increased vigilance.

“Despite this commitment (to prevent money laundering), the UAE — and other global financial hubs — continue to face the threat of illicit financial flows," he said, according to readout from the Treasury Department.

Adeyemo warned of challenges that have emerged amid the war on Ukraine “for both governments seeking to hold Russia accountable and for financial institutions like yours that are responsible for implementing the financial sanctions we impose.”

Associated Press writer Jon Gambrell in Dubai, United Arab Emirates, contributed to this report.

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In the dusty, northernmost sheikhdom of the United Arab Emirates, where laborers cycle by rustic tea shops, one of the world’s largest yachts sits in a quiet port — so far avoiding the fate of other luxury vessels linked to sanctioned Russian oligarchs.

The display of lavish wealth is startling in one of the country’s poorest emirates, a 90-minute drive from the illuminated high-rises of Dubai. But the 387-foot Motor Yacht A’s presence in a Ras al-Khaimah creek also shows the United Arab Emirates’ neutrality during Russia’s war on Ukraine as the Persian Gulf country remains a magnet for Russian money and its oil-rich capital sees Moscow as a crucial OPEC partner.

Since Russian tanks rolled into Ukraine, the seven sheikhdoms of the Emirates have offered a refuge for Russians, both those despairing of their country’s future as well as the mega-wealthy concerned about Western sanctions.

While much of the world has piled sanctions on Russian institutions and allies of President Vladimir Putin, the Emirates has not. It also avoids overt criticism of the war, which government readouts still refer to as the “Ukraine crisis.”

The Motor Yacht A belongs to Andrey Melnichenko, an oligarch worth about $23.5 billion, according to Forbes. He once ran the fertilizer producer Eurochem and coal giant SUEK.

The European Union in March included Melnichenko in a mass list of sanctions on business leaders and others described as close to Putin. The EU sanctions noted that he attended a Feb. 24 meeting Putin held on the day of the invasion.

Where do you hide a 500-foot yacht? Asking for an oligarch

A sanctions regime aimed at putting pressure on Russia’s wealthiest citizens has put a spotlight on the global mega-yacht trade.

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“The fact that he was invited to attend this meeting shows that he is a member of the closest circle of Vladimir Putin and that he is supporting or implementing actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, as well as stability and security in Ukraine,” the EU said at the time.

Melnichenko resigned from the corporate positions he held in the two major firms, according to statements from the companies. However, he has criticized Western sanctions and denied being close to Putin.

The oligarch could not be reached for comment through his advisors.

Already, authorities in Italy have seized one of his ships — the $600-million Sailing Yacht A. France, Spain and Britain have sought to target superyachts tied to Russian oligarchs as part of a global effort to put pressure on Putin and those close to him .

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U.S. wins latest legal battle to seize Russian superyacht in Fiji

The latest round of a legal battle over a $325-million Russian-owned superyacht has resulted in the case now appearing headed for Fiji’s high court.

May 27, 2022

But the $300-million Motor Yacht A so far appears untouched. It flew an Emirati flag Tuesday when Associated Press journalists observed the ship. Two crew members milled around the deck.

The boat’s last recorded position March 10 put it off the Maldives in the Indian Ocean, slightly more than 1,860 miles from Ras al-Khaimah. Satellite images from Planet Labs analyzed by the AP show the vessel in Ras al-Khaimah’s creek beginning March 17.

The Financial Times first reported on the ship’s presence in the Emirates.

Authorities in Ras al-Khaimah did not respond to a request for comment on the yacht’s presence. The Emirates’ Foreign Ministry did not answer questions about the ship, but said in a statement that it takes “its role in protecting the integrity of the global financial system extremely seriously.”

Why the U.S. needs a law to sell off Russian oligarchs’ assets

President Biden doesn’t want to just seize the yachts, luxury homes and other assets of Russian oligarchs, he wants to sell off the pricey goods and use the money to help rebuild Ukraine.

April 29, 2022

But so far, the Emirates has taken no such public action targeting Russia. The country abstained in a United Nations Security Council vote in February condemning Russia’s invasion, angering Washington.

The neutral response may stem from “the financial gain we’re seeing in Dubai in terms of new tourist arrivals, and Russian efforts to move assets and buy property,” said Karen Young, a senior fellow at the Washington-based Middle East Institute.

The flow of Russian money — both legitimate and shady — is now an open secret in Dubai, where lavish hotels and beaches increasingly bustle with Russian speakers.

The Emirates became one of the few remaining flight corridors out of Moscow. The Emirati government offered three-month multiple-entry visas upon arrival to all Russians, allowing major companies to easily transfer their employees from Moscow to Dubai. The private jet terminal at Al Maktoum International at Dubai World Central airport has seen a 400% spike in traffic, the airport’s chief executive recently told the AP.

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Real estate agents have reported a surge of interest from Russians seeking to buy property in Dubai, particularly in the skyscrapers of Dubai Marina and villas on the Palm Jumeirah.

Meanwhile, Abu Dhabi’s Mubadala state investment company remains among the most active sovereign wealth funds in Russia, along with those of China and Qatar, according to calculations for the AP by Javier Capapé of IE University in Spain.

But pressure is growing. Late Tuesday, the U.S. Embassy in Abu Dhabi posted a strongly worded video message in solidarity with Ukraine featuring local ambassadors from the world’s leading democracies as Russia’s foreign minister visits the region.

“We are united against Russia’s unjustifiable, unprovoked and illegal aggression,” said Ernst Peter Fischer, Germany’s ambassador to the Emirates.

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Russian oligarchs are escaping sanctions by taking their private jets and yachts to places like Dubai and the Maldives

• Russian oligarchs and billionaires have been hit with sanctions over Russia's invasion of Ukraine.
• Some have moved their yachts or sought out property in Dubai to avoid seizures.
• "No one wants to accept you, except places like Dubai," one Russian businessman told the NYT.

Since much of the West imposed harsh economic sanctions on Russia over the unprovoked invasion of Ukraine, some Russian oligarchs have scrambled to try and escape the sanctions leveled against them.

The US, UK, and European Union were among the countries to impose historically severe sanctions , targeting Russian banks, airlines, Russian President Vladimir Putin, and many in his inner circle . Financial sanctions targeted at oligarchs had cost the Russian elite more than $80 billion as of last week.

Italy seized yachts and villas worth $156 million belonging to Russian oligarchs, The Associated Press reported Saturday. Days earlier France said it had seized a $120 million superyacht  belonging to a close Putin ally.

But some Russian billionaires have found refuge in places that have not imposed sanctions, or that do not extradite to the US.

In Dubai, for example, there is currently "incredible demand" from Russians for luxury apartments, like a $15,000 per month 3-bedroom on the water, one businessman in the United Arab Emirates told The New York Times .

A yacht owned by oligarch Andrei Skoch — a steel magnate and government official in Russia who was sanctioned by the US — has been camped in waters off Dubai, The Times reported. A jet belonging to another billionaire sanctioned by the US, Arkady Rotenberg, who has also known Putin since childhood, arrived to the city on Friday.

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Boats and planes belonging to other oligarchs who may face sanctions have been arriving in Dubai or appear to be en route, according to The Times. On March 1, three yachts belonging to Russian billionaires were already in UAE waters, Forbes reported.

The UAE was likely to attract sanctioned oligarchs, Reuters reported last week, due to its loose laws related to money laundering and its relatively neutral stance on Russia's assault of Ukraine.

During the first United Nations Security Council vote opposing the invasion on February 25, the UAE abstained. Though it supported a nonbinding resolution days later, the UAE has not come out in strong opposition to Russia.

An unnamed Russian businessman told The Times: "Having a Russian passport or Russian money now is very toxic — no one wants to accept you, except places like Dubai."

"There's no issue with being a Russian in Dubai," he continued.

Russian oligarchs and billionaires seeking to escape sanctions have also gone to the Maldives, a nation of islands in the Indian Ocean that does not have an extradition treaty with the US .

At least five superyachts owned by Russian billionaires were there as of last week, according to maritime data seen by Reuters. Bloomberg  reported last week that the four largest superyachts in the Maldives were owned by Russians.

Some Russian elites have tried to avoid sanctions in other ways, including scrambling to try and sell off their assets .

Watch: The rise and fall of Russian oligarchs

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Dubai Harbou. Photo via Dubai International Boat Show.

Sanctioned Russians Spark Worries of Industry Crisis at Dubai Yacht Show

Share this article, related news, us seeking to auction russian oligarch’s yacht costing $7 million a year to maintain, ex-google ceo scraps $67.6 million purchase of abandoned superyacht, abandoned russian superyacht to be auctioned after sanctions lifted, dubai boat show features electric sailboat, $318 million superyacht, russian oligarch yacht agents indicted by us grand jury.

By Devon Pendleton, Lisa Fleisher and Kateryna Kadabashy (Bloomberg) –Superyachts, the ultimate symbol of excess, have long had a whiff of the sordid amid all the splendor.

At this year’s Dubai International Boat Show, there are other S-words hanging in the air — sanctions, seizures. 

In normal times, this yacht exposition, held at a brand-new marina, would be just like all the others: Giddy displays of lavishness put on to entice a growing universe of would-be buyers and awe normal-folk spectators.

But the war in Ukraine and sanctions against some of Russia’s moneyed elite have thrust superyachts to the fore of public consciousness like never before.  

The show this week is still packed with boats out of reach for 99.99% of the world, though there’s nothing that compares with Dilbar . That’s Alisher Usmanov’s superyacht, the largest by volume ever built, which is currently languishing in Germany due to European Union sanctions on the Russian billionaire. Other vessels are stuck in  France  and  Italy. One was nearly sunk off the coast of Spain .

It’s more drama than the Gulf emirate’s boat-show organizers could have imagined when planning the exposition, back after a two-year pandemic hiatus. 

The venue is still hopping. On Thursday afternoon, exhibitors, salespeople and smartly dressed families with children in tow milled around in the 90-degree heat. Waiters swung through with trays of watermelon juice and a VIP section erected by the Nikki Beach resort was packed. It’s a buzzy atmosphere befitting a marquee industry event on the heels of a record sales year . 

‘The Situation’

Yet the war and its implications loom. Just about every conversation with industry professionals returned to a neutral-sounding term for Russia’s invasion of neighboring Ukraine: “the situation.” 

“Everybody’s talking about it,” said Rainer Behne, chairman of BehneMar, a yacht broker and consultant.

Yacht builders, jubilant over skyrocketing sales amid the pandemic, are getting a shock dose of fear over the ramifications of sanctions and unprecedented public scrutiny.

Adding to the jitters, the Financial Action Task Force earlier this month added the United Arab Emirates to a “gray list” of countries seen as having shortcomings in dealing with illicit finance.

“If somebody wants to buy a yacht, it’s difficult,” said Behne. “The banks are shaking like crazy.” 

Russians make up the biggest percentage of current superyacht owners after U.S. citizens and almost match Americans in the number of new-build boats ordered in the past decade, according to a 2021 report from SuperYacht Times. Many of the yachts are big and showy — and thus, labor-intensive — which is an added boon to builders and designers.

Many industry representatives shrugged off the impact of sanctions , citing the culture of extreme secrecy that shrouds most workers’ awareness of their customers’ identities. Most declined to speak on the record for that reason.

‘Political Statements’

“It’s very hard for a company to make political statements about this,” said Farouk Nefzi, chief marketing officer at Dutch yacht builder Feadship. Out of the 490 boats the company has made since 1949, only eight have been for Russian clients, he said, and the firm frequently monitors sanctions lists in Europe and the U.S.  

Meanwhile, there’s no shortage of scrutiny on the comings and goings of superyachts, especially those of Russia’s richest people and those considered close to Vladimir Putin. News organizations have followed their every move. So has the Florida teen who soared to fame tracking Elon Musk’s private jet.

Satellite data collected over the past two weeks indicate a pattern of Russian-owned boats retreating from European waters for non-EU territory. A few Russian yachts have docked in Dubai, including “A,” a 143-meter sailing boat owned by fertilizer magnate Andrey Melnichenko , and Madame Gu, a blue-and-white Dutch-built ship belonging to the family of investor and Duma member Andrey Skoch. There’s no evidence the movements are linked to the war.

The sanctions pose a quandary for the industry, which is having to navigate an image crisis like never before. 

Logistical Questions

Then there’s the logistics. 

Superyachts are so large that a given shipyard can only handle a few projects at one time. It’s extremely likely that many of the custom ships under construction are Russian-owned, said Sam Tucker, head of superyachts at maritime data company VesselsValue. Sanctions bar builders from receiving payments from affected individuals or companies, and the partially-completed hulls, too vast to move, are taking away precious space to construct vessels for clients who can pay.

The competition for space is so fierce that offers for unfinished superyachts of sanctioned Russians have already started pouring in, people at the Dubai show said. The projects take many vendors and many years, and with the outcome of the war still uncertain, wealthy buyers are vying to take over contracts partway through.

Transferring the contracts could pose a problem down the road if sanctions are suddenly lifted. It’s yet another hypothetical in an already foggy future.

“Who knows,” said Thomas Wieringa, marketing director for shipbuilder Damen Yachting, referring to the effect on shipyards. “We were in Miami three weeks ago — nobody was expecting anything.”

© 2022 Bloomberg L.P.

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Dubai court to hear dispute over oligarch's $500m superyacht tied up in UK's costliest divorce

The world's 23rd largest luxurious yacht is central to a russian oil tycoon's divorce payout.

The luxury yacht, Luna, is at the centre of the most expensive divorce settlement in UK legal history. Getty 

The latest round of a bitter legal dispute involving a $500 million (Dh1.8 billion) superyacht that is the main contention of a divorce case is due to be heard in Dubai on Sunday.

A freezing order imposed by the London High Court has been placed on the 115-metre yacht Luna under the terms of the divorce settlement between Russian oil tycoon Farkhad Akhmedov and his wife Tatiana Akhmedov.

The hearing, which will appeal to uphold the freezing order by Dubai courts , is part of one of the UK's biggest divorce cases and, is also said to be the costliest.

The vessel, that contains a spa, swimming pool and two helipads, has been held in the dry dock at Port Rashid since February because of the dispute.

Mr Akhmedov, an oil and gas trader, is arguing against an English court judgment granting his wife ownership of the yacht under the terms of an earlier divorce settlement, worth more than $600m.

The yacht is secured in a family trust fund called Straight Establishment, making it difficult for lawyers to determine who the legal owners are.

Mr Akhmedov purchased the vessel from Chelsea football club owner Roman Abramovich in 2014. It is the 23rd largest luxury yacht in the world.

Lawyers acting on behalf of the oligarch, who is believed to have links to Russian President Vladimir Putin, argue a London court order cannot be applied in Dubai.

Mr Akhmedov and his ex-wife divorced in Moscow in 2000.

In May, an argument at the Dubai International Financial Centre Courts disputed the jurisdiction of the emirate's international commercial court.

DIFC Courts upheld the freezing order imposed by the London High Court in a judgment in March, but in April, Mr Akhmedov won the right to appeal.

Since the judgement, Luna's 50 crew members caught up in the dispute have had their passports returned following an intervention from Nautilus International, an independent trade union representing workers at sea.

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Dubai courts maintain freezing order on Russian oil tycoon's superyacht

Matrimonial battle over $540m Russian superyacht puts DIFC Courts in spotlight

The UAE Today

The latest news and analysis from the Emirates

Russia’s richest man, Alexei Mordashov, has secretly moved his gigantic 465-foot megayacht, Nord, to Abu Dhabi. Will this $500 million ‘Houdini of the high seas’ now make the UAE its new home?

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