Since the beginning of the Ukraine war, Germany has frozen Russian assets of 4.48 billion euros, including those of oligarchs. But what many people don’t know is that their villas, private jets and luxury yachts only serve as symbols of their wealth – the actual fortunes of the oligarchs lie behind them.
Superyachts have long been a popular way for Russian billionaires to show off their wealth to the outside world. The super-rich can compete with the status symbols, often built in German shipyards, in terms of size, luxury and ostentation. In the face of Western sanctions against Russian elites, these ships, some worth hundreds of millions of euros, are easy targets because they spend a lot of time in port or the shipyard undergoing maintenance.
As a result, several luxury yachts in Spain and Italy, among others, were quickly confiscated, while others withdrew to Turkish ports, where their owners initially believed they could be spared sanctions. But also in Fiji, after a legal tug of war, the US authorities confiscated the 150-meter-long “Amadea”, which had previously been sighted in Mexico and is attributed to the gold billionaire Suleiman Klimov.
“Attribution” is a key word here, however, as the ownership structure of Russia’s billionaire fortune is almost never apparent. Millemarin Investment Ltd. is the official owner of “Amadea” worth over 300 million euros. However, it is not clear who is really behind it, as different statements are made about it. Lawyers for Millemarin said the ship belongs to Russian billionaire Eduard Khudainatov, who is unaffected by the sanctions.
A senior US Treasury official, who plays a key role in ordering the sanctions, told the Washington Post: “Russian elites and oligarchs are probably among the best in the world at hiding their wealth.” Exposed luxury yachts, villas and private jets are relatively easy to grab. However, it is difficult to identify the actual assets behind the complicated company nesting.
According to figures from the end of May, assets of Russian oligarchs worth almost 10 billion euros have been frozen in the European Union since the beginning of the war, in Germany alone it is 4.48 billion euros. The proposal to define circumvention of sanctions as a criminal offense throughout the EU has now been tabled by the EU Commission. This is intended to make it easier for Russian oligarchs to be expropriated if they evade EU sanctions.
Given the destruction Russian troops wreak in Ukraine on a daily basis, calls are growing for confiscated oligarch assets to be used for reconstruction. Most recently, after EU Commission President Ursula von der Leyen, Federal Justice Minister Marco Buschmann was also open to it. The condition is that it is proven in court that suspects were involved in war crimes or illegal warfare, restricted the FDP politician. Despite all the efforts, it is questionable whether this will ever happen.
The origins of their wealth mostly go back to the 1990s. After the collapse of the Soviet Union, the companies that the state had taken over were privatized. The concept of the reformers under President Boris Yeltsin envisaged value checks that could be distributed to citizens and used for privatization auctions. The “People of Owners” project could not be implemented because, among other things, resourceful merchants bought together large quantities of value checks. Control of large-scale lucrative Russian industries (steel, metals, fertilizers) was redistributed, sometimes violently, to a small number of entrepreneurs. These entrepreneurs are now known as oligarchs.
The power of President Vladimir Putin and the Russian authorities is nevertheless great enough to deprive the oligarchs not only of their super yachts and private jets but also of their wealth worth billions. An example from the past demonstrates the government’s influence more than clearly: Two decades ago, oil billionaire Mikhail Khodorkovsky was considered the richest man in Russia. However, he spent a full decade in prison when he was accused of fraud and tax evasion in 2003. In 2013, Khodorkovsky, who described himself as a political prisoner, was pardoned by Putin. He later announced that he would withdraw from politics and business from then on. Threats of nationalization forced billionaire Oleg Tinkov to sell his stake in Tinkoff Bank at a fraction of its value because of his criticism of the Ukraine war. The buyer: Nickel billionaire Vladimir Potanin.
