The U.S. government announced that it spends over seven million dollars annually to maintain a luxury yacht seized from a member of the Russian oligarchy due to sanctions and urged the judge to allow its sale at auction before resolving a dispute over ownership. The authorities in Fiji seized the 106-meter Amadea yacht, valued at $300 million, in May 2022, under a U.S. warrant claiming it is owned by Suleiman Kerimov, a billionaire sanctioned by the U.S. Treasury in 2014 and 2018 in response to Russia's activities in Syria and Ukraine.
Efforts to auction the yacht have faced challenges from Edward Khudainatov, who led the Russian state oil and gas company Rosneft from 2010 to 2013. Khudainatov claims to be the owner of Amadea and stated that the yacht cannot be seized as he, being the owner, is not subject to sanctions. In a court document filed late Friday, federal prosecutors in Manhattan told U.S. District Judge Dale that the average monthly maintenance cost of Amadea, at $600,000, is "extravagant," justifying its auction. They also mentioned the collapse of negotiations to compel Khudainatov to pay for the yacht's maintenance.
Prosecutors in previous court documents stated that Khudainatov is acting as a "nominal owner" to obscure Kerimov's role, and that maintenance payments are necessary to preserve the yacht's value. Khudainatov has a deadline until February 23 to respond to the prosecution's request. His lawyers stated in a statement that the proposal to sell the yacht is "premature" and urged the judge to reject it pending a ruling on the constitutionality of the seizure.
The seizure occurred as Washington intensified the enforcement of sanctions against individuals close to Russian President Vladimir Putin to pressure Moscow to end its war in Ukraine. If the U.S. administration successfully sells the yacht at auction, the proceeds will likely be redirected to Ukraine eventually. Forbes magazine reported that Kerimov and his family's wealth amounts to $10.7 billion. Kerimov amassed his fortune from the Russian gold mining company Polymetal, although he is no longer a shareholder in it.
