Civil movement

Isle of Man moves to thwart move of Russian billionaire Andrey Melnichenko’s two superyachts

Britain’s crown dependency of the Isle of Man makes it harder for sanctioned Russian billionaire Andrey Melnichenko to move his two superyachts around the world. Authorities in the Isle of Man deregistered two yachts belonging to Melnichenko on Wednesday, according to a statement from his government, as part of an effort to enforce British sanctions on the Russian tycoon’s personal assets. The move will make it harder for the yachts – one of which was frozen by Italian authorities on Friday – to sail legally. (The other was last seen off the Maldives on March 10.)

Isle of Man Enterprise Minister Dr Alex Allinson told the BBC on Tuesday that delisting a vessel means it cannot legally set sail. According to an industry source of the yacht that spoke to Forbes, Melnichenko could register his yacht in a new jurisdiction, but he would also have to obtain new insurance and a new classification of the vessel, which ensures that the yacht meets international standards of maintenance, equipment and maintenance. Without classification, yachts cannot be insured either. Major ship classification societies such as Lloyd’s Register and DNV have withdrawn services from Russian-owned ships in recent days.

Vessels without insurance cannot enter ports, making navigation difficult, especially if they want to exit the Mediterranean Sea through the Suez Canal, a popular passageway for Russian-owned yachts. The yacht industry source expects many yachts owned by sanctioned Russian billionaires to register in Russia and obtain Russian classification and insurance.

The two yachts deregistered on Wednesday are the 390ft MY A and the 469ft SY A, which was frozen by Italian authorities in the port of Trieste on Friday. Valued at $578 million by the Italian government, SY A is the largest sailing yacht in the world and features a spa, lift, gym and underwater viewing pod. navy under its three masts, including 10 cabins that can accommodate up to 20 people.

MY A was built in 2008 by German shipbuilder Blohm+Voss and has a beauty salon and elevator as well as seven cabins that can accommodate 14 people. It is worth $204 million, according to yacht valuation experts VesselsValue. Its last recorded location was off the Maldives on March 10.

Both yachts had been registered in the Isle of Man until they were removed from its ship register on Wednesday. They are both owned by companies registered in the British Overseas Territory of Bermuda: MY A is owned by Bermuda-based Valla Yachts Limited, while SY A is owned by Bermuda-based Hamilton Yachts Limited. Any sanctions imposed in the UK are also being applied in Bermuda, according to Lee Cormier, a safety oversight consultant for Bermuda’s Civil Aviation Authority, who announced on Saturday that it had suspended the licenses of all aircraft operated by Bermuda. Russia registered in the territory.

In a statement provided to ForbesIsle of Man Enterprise Minister Dr Alex Allinson said the island’s Aircraft and Vessel Registries “acted proactively and quickly to stop Russian connections beyond those already sanctioned on the UK lists”.

“Since the start of the conflict, we have worked to remove aircraft and ships/yachts with Russian connections and a detailed review is already underway in partnership with the relevant agencies to establish further connections with Russia and ensure that the appropriate actions are taken in a solid and timely fashion,” he added.

Melnichenko’s yachts aren’t the only ones at risk of being struck from the Isle of Man ship register. A spokesman for the island’s government said Forbes that 39 other yachts linked to Russian owners have been notified and will likely be delisted as early as next week.

Billionaires and wealthy individuals often register yachts in the Isle of Man due to its lack of corporation and capital gains tax, as well as its low operating costs and favorable shipping registry, which provides access to British consular services and protection from the British. Marine.

According to VesselsValue’s head of superyachts, Sam Tucker, yachts are often owned by offshore vehicles that obscure their ultimate ownership. “Technically speaking, these yachts belong to a special purpose vehicle, often in a different jurisdiction than the beneficial owner,” he said.

Melnichenko, a wealthy industrialist who held majority stakes in Where-based fertilizer producer Eurochem and Moscow-based coal power company SUEK, was sanctioned by the European Union on March 9 and by the UK March 15. He resigned from his roles at both Eurochem and SUEK and retired as a beneficiary – transferring beneficial ownership to another entity or person – in both companies on the same day. A spokesperson for Melnichenko said Forbes that he will challenge the “baseless and unjustified sanctions” and that he believed that “the rule of law and common sense will prevail”.

“Andrey Melnichenko is a self-made international businessman, entrepreneur and investor in children’s education,” his spokesperson said in a statement on the sanctions. “He has no connection with the tragic events in Ukraine. He has no political affiliation.” Melnichenko spoke out against the Russian invasion of Ukraine in a statement on Monday. “The events in Ukraine are truly tragic We urgently need peace,” he said in the statement. “As a Russian by nationality, a Belarusian by birth and a Ukrainian by blood, I feel great pain and disbelief seeing the brotherly peoples fight and die.”