• Maldives will not actively pursue yacht seizures – sources
  • Fears impact of Russian sanctions on tourism industry – sources
  • “Fantastic” to think that the yachts will be confiscated

MALE, April 7 (Reuters) – A day after coal and fertilizer billionaire Andrey Melnichenko was placed on the European Union’s sanctions list on March 9, his superyacht Motor Yacht A stopped broadcasting its position as that it was in Maldivian waters, according to maritime data.

In Italy, four days later, authorities seized another of Melnichenko’s ships – the largest sailing ship in the world, estimated by Italian financial police at $578 million.

Turning off devices that allow authorities to track a vessel’s whereabouts can help keep yachts out of sight.

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But in the Maldives, the chances of action against the assets of the sanctioned oligarchs are in any case slim, according to interviews with a dozen people familiar with internal discussions on how to respond to US and European financial sanctions, including ministers. government, diplomats and experts in the country’s superyacht industry.

The Maldives authorities’ cautious approach to enforcing sanctions imposed after Russia invaded Ukraine means the Indian Ocean island nation has become an attractive destination for Russian yacht-owning oligarchs.

Melnichenko’s ship is one of six Russian-linked yachts that have slipped between the atolls of the Maldives, southwest India, since Western nations hit some oligarchs with sanctions in response to the February 24 invasion.

According to data provided by MarineTraffic, a marine analytics provider, three of the yachts masked their live locations, changed reported destinations or moved into international waters. Read more

The idea of ​​seizing yachts is “far-fetched” because the legal system in the Maldives is not strong enough, the country’s chief prosecutor, Hussain Shameem, said in an interview, adding that authorities could not not easily confiscate visiting vessels unless a crime is committed under local responsibility. law.

Requests for comment on the deactivation of Motor Yacht A’s tracking devices and its current ownership status, sent to Melnichenko’s spokesperson as well as his charitable foundation, fertilizer producer EuroChem Group and coal company SUEK – two companies from which he resigned in March – went unanswered.

Last month, his spokesman told Reuters the businessman would challenge the sanctions, adding he had no political affiliation.

The 119-meter (390-foot) Motor Yacht A features crystal furnishings and three swimming pools, photos released by its builders exhibit, and it has been valued in boating trade publications at $300 million. Melnichenko’s wife said she was involved in interior design.

A spokesperson for Melnichenko in 2017 acknowledged in a statement to the BBC that the sailboat belonged to his boss. Both ships were designed by Philippe Starck, the famous French designer.

HAVEN OF SAFETY

The situation in the Maldives underscores the difficulty of Western powers in stifling the wealth of oligarchs targeted by sanctions following Russia’s invasion of Ukraine, while several countries around the world still offer safe havens, the sources consulted said. by Reuters in the Maldives.

The United States, Britain and the European Union introduced sweeping sanctions against Russian President Vladimir Putin, lawmakers and businessmen following the invasion, which Moscow calls a military operation special campaign aimed at the “demilitarization” and “denazification” of Ukraine.

European countries have seized property including villas and boats, with authorities confiscating at least six vessels they say belong to some of the dozens of sanctioned oligarchs.

European Commission spokesman Peter Stano said the sanctions were not binding on non-EU countries or non-aligned states such as the Maldives, although he called on all countries to respect them.

The Maldives voted to condemn Russia’s invasion at the United Nations and publicly say they will support international efforts against the sanctioned Russians.

In fact, officials say they are concerned about the economic impact of deterring wealthy Russian visitors.

With its white sandy beaches and some 1,200 mostly uninhabited islands, the Maldives is a favorite destination for the super-rich.

From a backwater with few natural resources beyond tuna and coconuts, tourism has propelled it to middle-income status over the past three decades. It has a pre-pandemic GDP per capita of over $10,000 – the highest in South Asia.

Tourism accounts for about a third of the $5.6 billion economy. Russians have above-average spending and accounted for by far the highest number of arrivals in January, the last month before the invasion of Ukraine, according to Tourism Ministry data.

Since then, arrivals from Russia have fallen by 70%, Tourism Minister Abdulla Mausoom said. He wants it reversed.

“Our entry policy is very open. The Maldives is an open country,” he said.

“NO ONE CAN TOUCH THEM”

Abdul Hannan runs Seal Superyachts Maldives, providing fuel and food to ship owners, including Russian customers.

Hannan said yacht costs typically run into the hundreds of thousands of dollars a week and about half of his customers are Russians. Like other superyacht owners, they often winter in the Indian Ocean and spend the summer season in Europe, he said.

Hannan said he has met Russian owners aboard their superyachts since the sanctions were announced, describing them as “humble, normal people” going through a tough time. He did not say whether people were under sanctions.

“At the moment they are trying to keep the yachts in international waters,” where they can potentially sit idle for months, he said.

“So no one can touch them.”

He declined to name the customers, citing confidentiality.

A spokesperson for the Maldives Customs Authority, which monitors maritime traffic in its waters, did not respond to a request for comment on the number of Russian-owned yachts currently present.

DELICATE DIPLOMACY

While Maldivian institutions would be hard pressed to ignore a warning from the US Treasury that failure to confiscate Russian assets would affect its access to US financial markets, such a message has not been sent, a familiar official said. with the international financial arrangements of the Maldives.

Asked about places such as the Maldives, Andrew Adams, head of a US task force aimed at freezing the assets of the oligarchs, told Reuters that Washington saw cooperation “at an all-time high”, even as the oligarchs try to hide yachts, planes or other movable property in countries they believe to be secret.

However, forcing the politically unstable and financially constrained Maldives to make a tough choice on sanctions could bring them closer to China, two Western diplomats have said. A previous government had strengthened relations with Beijing, although relations with the West and traditional ally India are now improving.

“We are aware of the economic risks that this entails” for the Maldives if it takes a hard line, said one of the diplomats.

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Reporting by Alasdair Pal and Mohamed Junayd in Male Additional reporting by Sarah Lynch in Washington, Jan Strupczewski in Brussels and Dasha Afanasieva in London Editing by Frank Jack Daniel

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