Dozens of superyachts that have been seized from Russian oligarchs are at risk of falling into disrepair as they go unmanned and unmaintained as the governments who seized them decide what to do with them.
The yachts and their billionaire owners, many of which are among Russian President Vladimir Putin’s closest allies, were included in a series of sweeping global sanctions recently imposed against Russia for its invasion of Ukraine. Earlier this month, Italy seized a $578 million megayacht belonging to Andrey Melnichenko, France seized a $120 million vessel owned by Igor Sechin, and Spain seized a $153 million superyacht linked to Sergei Chemezov.
Business Insider spoke with four experts who described how the sanctions against Russia — which they say are more extensive than any other coordinated global round of sanctions in history — could lead to lengthy court battles and the deterioration of the world’s most expensive superyachts.
“Yachts will start to deteriorate as soon as the maintenance program is relaxed,” Benjamin Maltby, partner at Keystone Law in the UK and an expert in yacht and luxury asset law, told Insider. “Cleaning surfaces and checking equipment operation is continual.”
Todd Roberts, president of Marine Boat Works in California, told Insider that yachts are typically seized for sales purposes, meaning the impounder has a vested interest in maintaining the yacht and its value. However, the sanctions have made the process more murky.
The sanctions do not allow countries to take ownership of the yachts and the Russian billionaires remain the beneficiaries, though the assets are effectively frozen and blocked from use.
And while the Russian oligarchs are still technically responsible for paying for yacht maintenance, it is likely they will either refuse to pay, or European authorities will encounter difficulty collecting the funds due to sanctions on financial transactions with the billionaires.
In the meantime, it remains unclear who will foot the multimillion-dollar bill to maintain upkeep on the mega-vessels. According to Maltby, the maintenance cost of a yacht usually totals about 15% to 20% of its overall value. For Melnichenko’s yacht, for example, that would translate to up to $115.6 million in annual expenses.
Even foregoing the costs to staff, repair, fuel, and insure the ship, the costs to dock the yacht can quickly add up. Roberts said docking fees alone typically cost tens of thousands of dollars per month.
Without proper care, vessels can lose about 30% of their value, according to Roberts. What’s more, if a superyacht were to go without its crew — which typically includes a staff of 25 or more — the vessel could quickly fail official inspections and ultimately lose its insurance due to concerns related to functionality and environmental risk.
Maltby told Insider he expects most crews to walk away from the seized vessels because their pay will likely be comprised, leaving European authorities in the lurch when it comes to deciding what to do with the assets.
“This is almost completely uncharted territory,” Roberts said. “I don’t think any of us fully understand what it will mean for the industry.”