London just seized a Russian superyacht worth 50 million dollars. What happened?

A 190 feet superyacht named Phi was recently detained in UK's financial district Canary Wharf in London, as part of the sanctions on Russia imposed on account of the Russia- Ukraine War. The £38 million ($50 million) boat was the first yacht detained in the UK, after many other yachts were seized or detained in Spain, Italy and France. 

A BIT OF BACKGROUND

The Russia-Ukraine War has changed the way the world operates and perceives a normal life. This has led to many unnecessary consequences for countries on both sides of the war. Russia's attack on Ukraine is causing Russia to deal with the loss of international brands who have walked out of the country. Meanwhile Western nations like the US, UK, and EU, have been forced to impose sanctions on Russia as a way to stand in solidarity with Ukraine.  

As part of their sanctions, Western countries are targeting Russian oligarchs and imposing sanctions by way of restricting travel, freezing assets, stopping trade and even seizing Russian superyachts.  

Till date, though 15 yachts have been linked to the Russian oligarchs, at least 8 have been seized by authorities in France, Italy and Spain. Now the UK too has joined these ranks and detained a superyacht, suspected to belong to a Russian oligarch.

WHAT HAPPENED  

A gorgeous 192 ft bright blue yacht named Phi was detained in London's Canary Wharf recently by the UK Department of Transport. The yacht was identified on March 13, but was only seized recently, since the yacht's ownership was 'deliberately well-hidden'. Maltese flags and a registration under a company in the Caribbean islands of St Kitts and Nevis hid the origins of the yacht's owner. 

The vessel was in London for a superyacht awards ceremony and was due to depart at 12 noon on March 29. But the Department of Transport, the National Crime Agency and the Border Force Maritime Investigation Bureau worked together to detain the yacht before it left UK shores. 

The yacht is owned by an undisclosed and as-yet unsanctioned Russian businessman who is closely connected to Russian President Vladimir Putin.

THE YACHT

The yacht is named after the mathematical concept Phi, or the 'Golden Ratio' and is meant to symbolise 'magnificently sensuous'. The ship was built in The Netherlands and features an "infinite wine cellar", a freshwater swimming pool and a penthouse apartment on the upper deck.

CAN THE UK DO THIS?

The yacht has been detained under the Russia (Sanctions) (EU Exit) Regulations 2019 which allows a country to detain a ship. But this can also be contested by the yacht owner in court under human rights law, as people have the right to enjoy their possessions. If the yacht owner wins the case, this could be costly for London as the compensation they might have to pay would be around £2,50,000 a week.

Welwyn Hatfield MP and Secretary of State for Transport Grant Shapps tweeted on March 29 that he was working closely with UK's National Crime Agency and UK Border Force's Maritime Investigation Bureau to detain the Russian superyacht. He wrote, "This Government will continue to take robust action against anyone benefiting from connections to Putin's regime."  

?BREAKING: Russian superyacht detained. I have worked closely with @NCA_UK & the @UKBorder’s Maritime investigation Bureau to intercept the £38m - Phi. This Government will continue to take robust action against anyone benefiting from connections to Putin’s regime. pic.twitter.com/enp9M2tmBB

— Rt Hon Grant Shapps MP (@grantshapps) March 29, 2022

WHY THIS MATTERS

In the pre-Russia-Ukraine War period, owning a superyacht or a megayacht was a show-stopping purchase for the super-rich Russians. They installed all sorts of luxury comforts in their yachts and flaunted it unabashedly. You name it and they had it - the helicopter launchpads, mini-subs, freshwater swimming pools, a fully-staffed ship and everything. 

Not only were those status symbols, but also floating assets or stores of value. Now, detaining these Russian-owned superyachts in another country represents a symbolic blow to the ultra-rich lifestyle of the Russian oligarchs. But it also brings up another question for the UK folks: What do you do to a confiscated yacht that is going to cost millions of pounds annually in maintainence?  

For instance, Roman Abramovich's two immense yachts, Eclipse and Solaris, are in Turkey - safe from the sanctions imposed on him in the UK and EU.