The EU’s highest court recently ruled that the concepts of ‘ownership’ and ‘control’ under EU sanctions also apply to beneficiaries of trust funds – even if they do not have direct access to the assets. The 143-metre sailing yacht has been moored in Trieste since March 2022 is currently under arrest after Italian authorities seized it as part of the EU sanctions against Russia. The yacht is estimated to be worth around 450 million euros.
Focus on complex trust structures
In May 2024, the Lazio Regional Administrative Court in Rome had asked the European Court of Justice for clarification. The central issue was whether assets are subject to sanctions if they are held through complex trust structures. The owner company argued that control of the yacht had been transferred from a trust fund belonging to Melnichenko to a trust fund belonging to his wife prior to the sanctions. Both trust funds were subsequently subject to sanctions. The court clarified that indications of ownership or control by the beneficiary or settlor may be inferred from factual circumstances or unnecessarily complex legal structures.
Legal battle over “Sailing Yacht A” continues
The ruling by the Court of Justice of the European Union is not a final decision in the ongoing proceedings. The Lazio Court will continue to hear the case in light of this clarification. The seizure remains in place until a final decision is reached. “Sailing Yacht A” incurs annual maintenance costs of around ten million euros, which are borne by local authorities from the Italian national budget. The Italian government had announced the seizure in March 2022, a few weeks after the three-masted yacht arrived in Trieste and shortly after EU sanctions were imposed on Melnichenko in connection with the Russian invasion of Ukraine.
“Sailing Yacht A” – The world’s largest sailing yacht
“Sailing Yacht A” remains the largest sailing yacht in the world. The yacht, built by Nobiskrug, is fitted with a diesel-electric propulsion system comprising two MTU engines, each with an output of 3,600 kilowatts, and electric motors. Designed by Philippe Starck, the vessel can accommodate 20 guests in ten cabins. The range is 5,340 nautical miles at 16 knots. Dykstra Naval Architects was responsible for the design in collaboration with Nobiskrug, whilst Starck also designed the interior. The three freestanding carbon-fibre masts, rising almost 100 metres into the sky, carry 4,500 square metres of sailcloth.
Several assets affected
“Sailing Yacht A” is just one of several assets that the Melnichenko couple have had to relinquish since the sanctions were imposed. The case highlights the legal challenges involved in enforcing sanctions against assets held through complex international trust structures. The ruling by the Court of Justice of the European Union sets a precedent for similar cases across the European Union.
List of sanctioned yachts belonging to Russian oligarchs
Following Russia’s invasion of Ukraine in February 2022, authorities around the world seized luxury yachts. Here is an overview, sorted by length:
““Dilbar”
The 156-metre-long “Dilbar” remains the largest yacht in the world, was built by the German Lürssen shipyard and launched in 2016. The 156-metre-long Espen Øino design is therefore, with a gross tonnage of 15,917 tonnes, by far the largest yacht in the world. This is also evident in the interior designed by Andrew Winch: the yacht-savvy owner and his guests have 3,800 square metres of living space at their disposal across seven decks. “Dilbar” is said to belong to the oligarch Alisher Usmanov, but was formally registered in his sister’s name. “Dilbar” is currently the sixth-largest yacht in the world.
“"Sailing Yacht A"
The 143-metre-long sailing yacht was built by Nobiskrug in Kiel. The Italian authorities seized the imposing three-masted vessel in the port of Trieste. It belongs to the billionaire and Russian oligarch Andrey Melnichenko.
““Crescent”
The 136-metre “Crescent” was built by Lürssen at its shipyard in Lemwerder. Spanish authorities seized the vessel in the port of Tarragona. Its interior was designed by the French design firm Zuretti. Delivery: 2018. The exterior design is by Espen Oeino. The identity of the owner remains unclear to this day. According to media reports, there are indications that it belongs to Igor Sechin, CEO of Rosneft and a close confidant of Putin.
“Amore Vero”
The 89-metre yacht was built by Oceanco in 2013 and designed by Igor Lobanov. It is also owned by Igor Sechin. In March four years ago, French authorities seized the vessel in the Mediterranean port of La Ciotat. According to media reports, the crew were allegedly preparing to flee at the time of the seizure.
“Valerie”
The 85-metre yacht was delivered by Lürssen in 2013. In March 2022, Spanish authorities seized the five-masted vessel in Barcelona. It is linked to former KGB agent and Rostec CEO Sergei Chemezov, but is said to have been registered in the name of his stepdaughter.
“Axioma”
The The 72-metre-long “Axioma” was built in 2013 by Dunya Yachts and designed by Sterling Scott. The vessel was seized by the authorities in Gibraltar. “Axioma” is said to belong to Russian billionaire Dmitry Pumpyansky, the former owner and CEO of TMK PAO, Russia’s largest steel pipe manufacturer.
“Ragnar”
The 68-metre-long “Ragnar” was built in 2013 as a supply vessel and converted into a yacht in 2020 by Icon Yachts in the Netherlands. The Norwegian Navy seized the robust ice-class explorer, which is reportedly owned by former KGB agent Vladimir Strzhalkovsky, a close friend of Putin’s.
“Lady M”
The 65-metre yacht was seized by the Italian financial police in Imperia. It belongs to Alexei Mordashov, CEO of the steel group Severstal, who, with a fortune of $39 billion, is currently Russia’s richest oligarch. The vessel features six luxury suites, as well as a spa, gym and beauty salon on board.
“Lady Anastasia”
The 48-metre yacht was launched in 2001 by Sensation Yachts. Spanish authorities detained the vessel in Palma de Mallorca. It is reportedly owned by Alexander Mikheev, CEO of Rosoboronexport. The case gained particular attention when A Ukrainian engineer on board tried to sink the yacht.
“Lena”
The 38-metre-long “Lena” was built in Viareggio and launched in 2010. The Italian financial police seized the yacht in San Remo. According to media reports, the owner is the oligarch Gennady Timchenko, a close friend of Putin’s since the 1980s and founder of the investment firm Volga Group.
Martin Hager
Editor in Chief YACHT
