US govt seeks auction of seized Russian oligarch's superyacht claiming it spends $7m on its maintenance

The US government has disclosed that it spends over $7 million annually to maintain a superyacht seized from a sanctioned Russian oligarch and is urging a judge to authorise its auction despite an ongoing ownership dispute.

The 348-foot, $300 million yacht named Amadea was confiscated by Fijian authorities in May 2022, acting upon a US warrant alleging ownership by Suleiman Kerimov, a Russian billionaire previously sanctioned by the US Treasury Department for involvement in Syria and Ukraine affairs.

Eduard Khudainatov, former head of Russian state oil and gas giant Rosneft, contests ownership of the vessel, arguing that it cannot be forfeited as he himself hasn’t been subjected to sanctions.

Federal prosecutors in Manhattan have asserted that the hefty monthly maintenance cost of $600,000 for the Amadea justifies its prompt auction, especially as negotiations with Khudainatov to cover these expenses have faltered.

They claim Khudainatov is merely a front for Kerimov and that maintaining the yacht is crucial to preserving its value.

Khudainatov has until February 23 to respond to prosecutors’ request. His legal team has deemed the motion premature and urged the judge to withhold approval until the constitutionality of the seizure is determined.

The yacht’s confiscation aligns with heightened US sanctions enforcement targeting individuals associated with Russian President Vladimir Putin amid Moscow’s military actions in Ukraine.

Proceeds from the yacht’s auction, if successful, would likely be directed towards Ukraine. Prosecutors allege that Kerimov violated US sanctions by funneling over $1 million in maintenance payments through the US financial system, rendering the vessel, currently harbored in San Diego, eligible for forfeiture.

Kerimov, whose net worth is estimated at $10.7 billion according to Forbes, amassed his wealth primarily through his involvement with Russian gold miner Polyus, though he no longer holds shares in the company.