Sanctions against Moscow backfire? US spent $20mn to maintain superyacht seized from Russian oligarch

A super yacht which was seized from a sanctioned Russian oligarch has cost the American taxpayers a total of $20 million and nearly $1 million per month to maintain, recent court filings showed. This comes as the war in Ukraine rages on and Kyiv’s Western allies, including the United States, have imposed thousands of sanctions against Russia in response.

About the Russian oligarch’s superyacht

The US Department of Justice has sought permission to sell the 348-foot yacht called Amadea which was seized in 2022. Estimated at a price ofaround $300 million, the superyacht wasallegedly owned by Russian billionaire Suleiman Kerimov.

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Kerimov was sanctioned by the US Treasury Department in 2014 and again in 2018 in response to Russia’s activities in Syria and Ukraine.

The US government has sought to sell the mega-yacht, which is currently docked in San Diego, for $230 million due to the “excessive costs” of the maintenance and crew which can be as high as $922,000 a month.

According to the court documents, monthly costs for Amadea include $600,000 per month in running costs; $360,000 for the crew; $75,000 for fuel; and $165,000 for maintenance.

The ship also requires an additional $144,000 in insurance and the occasional one-off fees to cover dry docking expenses which add another $178,000 to the monthly bill.

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“It is excessive for taxpayers to pay nearly a million dollars per month to maintain the Amadea when these expenses could be reduced to zero through sale,” the US prosecutors argued in the court filing.

In previous court filings, prosecutors have also said that these maintenance payments are essential to preserving the yacht’s value.

Battle over Amadea

The US government has tried to previously get rid of the yacht but the efforts to auction it have been challenged by Eduard Khudainatov, who led the Russian state oil and gas company Rosneft from 2010 to 2013.

Khudainatov who has claimed ownership of the Amadea said that it cannot be forfeited because he has not been sanctioned. However, in previous court filings, prosecutors have alleged that he is acting as the superyacht’s “straw owner” to disguise Kerimov’s role.

However, the Russian oligarch’s lawyers have argued that the motion to sell the vessel was “premature” and urged the judge to decline it till the court “determines whether the seizure was unconstitutional.”

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The court battle over Amadea highlights the financial and legal challenges of the sanctions imposed by the US which also involves seizing and selling assets owned by Russian oligarchs. If the US government succeeds,they would likely eventually transfer sale proceeds to support Ukraine.

European Commission President Ursula von der Leyen, last week suggested something similar saying that the EU should use profits from more than $200 billion of frozen Russian assets to fund Ukraine’s war effort.

(With inputs from agencies)