Sanctions on Russian oligarchs trigger supply of luxury yachts under construction

The sanctions imposed by Western countries on Russian oligarchs affect their current properties, but also future ones. In addition to allowing the immobilization of the private pleasure boats of Russian tycoons, sanctions are hitting superyachts under construction.

Super-luxury boats fall within the scope of the new sanctions of the G7 and the European Union that will prohibit the export of luxury goods to Russia. In practice, this means that shipbuilders cannot accept any type of payment coming from one of those affected by the Russian elite by the measures.

Overnight, these superyachts have said goodbye to the owners for the owners they were being built for. Due to the large size of these vessels, which significantly limits the number of yachts that can be built at the same time, this situation could pose a serious problem for shipbuilders, but this is not the case.

Builders are receiving multiple offers to take over these half-built vessels, according to industry sources. Bloomberg. For some wealthy, sanctions on Russian oligarchs have become an opportunity to skipping some spots on the waiting list to get a superyacht.

Since the Russians represent the second largest group of owners of private pleasure boats in the world, according to data from a report by SuperYacht Times By 2021, many of those half-built boats can be expected to have been ordered from shipyards, says Sam Tucker, head of superyachts at maritime data company VesselsValue.

Since the beginning of the war in Ukraine, many luxury boats have been immobilized. United States has banned its citizens from working on the Dilbar superyacht, of 600 million dollars, of the Russian mining and metals tycoon Alisher Usmanov. Likewise, it has prohibited the payment of its docking rights in dollars. Dilbar had to fire its staff because the sanctions prevented the payment of their salaries.

Italian authorities have seized a $578 million mega yacht owned by sanctioned billionaire Andrey Melnichenko. Spain, for its part, has agreed the provisional immobilization of three mega yachts: the Valerie, in the Port of Barcelona; the Lady Anastasia, in Port Adriano; and the mega yacht Crescent, registered in the Cayman Islands and 135 meters long and 21 meters wide, according to the Ministry of Transport.

Faced with the threat of immobilization, some Russian oligarchs have chosen to move their luxury boats. One of them is the billionaire Roman Abramovich, who has reportedly moved the 513 million euro Solaris superyacht, to the waters of Turkey, a country that has not joined the sanctions imposed on the rich Russians. Abramovich’s second private pleasure boat, the Eclipse, is docked off the coast of Algeria.

Hong Kong’s wealthy take their yachts out of town

In Hong Kong, the rich also fear for their yachts, but in this case as a result of restrictions due to the increase in coronavirus cases. In recent weeks, wealthy residents of this city have rushed to sell or ship your yachts and luxury cars outside Chinese territory.

Specialized shipping and brokerage firms say inquiries and bookings have increased as expatriates made plans to flee Hong Kong. Last month, a company moved 53 cars from the city to the United Kingdom and another 47 people have made reservations for the first weeks of March. According to My Car Import data collected by the Financial Timesthis figure doubles the number of vehicles shipped in the same period last year.

A similar increase is being experienced by yacht transport companies. Charles Massey of Sevenstar Yacht Transport highlights the difference with the volume of shipments made last year. In 2021, the company transported less than 10 yachts out of the city. Only so far this month, they have sent 5 boats abroad. In addition, inquiries have increased to take yachts out of Hong Kong, bound for Phuket, Singapore, Europe. Transporting a private pleasure boat can cost between 200,000 and 1 million dollars.

As for the number of yachts put up for sale, the figure has increased between 20% and 30% compared to the same period last year, according to data from Asia Boating Limited.