As part of American sanctions against Russia for its unprovoked invasion of Ukraine, U.S. officials have stepped up efforts to seize the ruling elite's toys and assets.
As part of that, the Justice Department’s recently formed KleptoCapture unit has been tracking down and impounding everything from condos to superyachts and other signifiers of ostentatious wealth.
Most of that haul has come from Russian oligarchs and other high-profile allies of President Vladimir Putin
KleptoCapture had one of its most high profile victories when it seized Russian billionaire Viktor Vekselberg’s 255-foot, $95 million vessel Tango, which was grabbed by the Spanish government at American request.
Vekselberg has been sanctioned by the U.S. since 2018, for alleged money laundering and U.S. bank fraud, among other charges.
Now, however, someone must take care of these assets, and recent reporting has found that is not coming cheap.
Seized Assets Have To Be Maintained
Once an asset is confiscated, it’s the Department of Justice’s job to find someone to keep it in good condition so it doesn't lose value, Bloomberg reports.
In the case of the superyacht, that means working with insurance companies and finding people to do necessary upkeep.
Finding qualified caretakers can be difficult, because existing crew members are usually on the payroll of a sanctioned owner, so the DOJ has to reach out to yacht-management vendors instead.
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It’s Not Cheap To Maintain A Yacht
In Germany, authorities recently seized oligarch Alisher Usmanov’s yacht Dilbar, the world’s largest craft. The U.S. Treasury estimates its value as between $600 million to $750 million.
Thus far more than a dozen superyachts have been captured in European ports since the Ukrainian invasion began, with a total value of $2.3 billion.
All those yachts can add up.
The yearly operating cost of a superyacht is usually about 10% of the boat’s value, or about $9.5 million just to maintain the Tango.
But beyond the matter of maintenance, there’s the matter of what to do with them next, which is something the U.S. and Europe is still figuring out.
The law prevents the U.S. and Europe from simply owning the boats outright, because government prosecutors would have to prove the assets were used as part of a crime to take ownership. This is often a lengthy, years-long process.
That means that the oligarchs technically still own the assets, but are blocked from using them.
Still, if the U.S. does manage to fully own an asset, it has the option to sell it, with the proceeds usually going towards law enforcement.
At the moment, there is a bill in Congress, referred to as the “Yachts for Ukraine Act,” which would allow authorities to sell any property seized from sanctioned Russians valued at more than $5 million.
The bill has bipartisan support.
