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12:16
SPEAKERS
(voiceover), Diane Byrne
(voiceover) 00:01
Welcome to Megayacht News Radio, the first and longest running podcast series dedicated to the large yacht industry, hosted by Diane Byrne, the editor of MegayachtNews.com. We feature conversations with engaging and inspiring people in yachting from shipyard CEOs, to designers, from yacht managers, to young entrepreneurs. And yes, even owners. You’ll learn how they got into yachting, how they’re building better businesses, and especially how they’re helping people like you get more enjoyment out of the yachting lifestyle.
Diane Byrne 00:50
Welcome, everyone. Today, I’m doing something a bit different for our podcast series. Instead of having a guest join me for a conversation, I’m focusing on the Russian yacht arrests and yacht detentions that have occurred in recent weeks. The reason is to help straighten out a number of conflicting media reports and social media posts that have been published since March, which understandably has led to confusion about what’s actually occurred.
Now some of the reports seem to stem from a rush to have an exclusive and some of the social media posts of course, are being shared by people who are trusting what they are reading is actually accurate. But from where I sit, a lot of the confusion is actually stemming from the use of one particular word, seize, and variations of it. In a nutshell, there is an impression that all or nearly all of the Russian yachts that have been arrested or detained so far, have been confiscated and have had their ownership rights stripped. But that’s not true.
If that’s news to you, don’t feel bad. We at MegayachtNews.com have had a devil of a time ourselves trying to sort fact from fiction. The terminology that’s been used by government officials around the world has not exactly been clear at times. So that’s part of the problem. And while we make a concerted effort in our coverage to specify whether a yacht is being detained versus under arrest, and try to avoid using the word seas, even then sometimes the details are not entirely black and white.
So to help you better understand what has gone on so far, and what is likely to continue. I’m going to give you some background on the American task force that is enforcing sanctions and taking possession of assets, including yachts, then explain the difference between a yacht being detained and being under arrest, as well as why the word seize is causing a lot of confusion. And finally, I’ll explain what the future fate may be for these yachts.
First, the task force. In early March, the US Justice Department announced the launch of what it calls Task Force KleptoCapture. This is a new unit that brings together different law enforcement agencies, and they’re all focused on enforcing the sanctions from the United States and its allies. As such, the task force is tracking down sanctioned Russian citizens and individuals closely tied to President Vladimir Putin. It has taken hold of their assets such as yachts, because the Justice Department asserts they have committed crimes directly or are aiding and concealing their unlawful conduct.
Now, in terms of the yachts that the United States has arrested, as of this recording on April 20, there’s only one, despite what some of the headlines and reports may have given you the impression of so far, and that yacht is the motoryacht Tango. The arrest occurred on April 4 In Spain, with agents from Spain’s National Law Enforcement Agency, joined by FBI and Homeland Security agents, boarding the yacht to officially deliver the notice of arrest. The yacht therefore cannot depart with her original crew, or with the owner even on board because a maritime arrest means the yacht is no longer in the custody of the owner. Instead, it’s in the custody of a government appointed caretaker. In this case, it’s someone tapped by the Department of Justice. Now that caretaker, in turn, is making sure that the yacht is maintained by at least a partial crew and takes care of expenses like insurance. Now, some of you might wonder whether the U.S. government, or really any other government around the world that has arrested a yacht, is really going to do this–if they’re really going to hire a crew and make sure the boat is taken care of. The answer is yes. The KleptoCapture task force does indeed understand that there is a certain responsibility to keep the yacht in decent condition. There’s actually even a federal prosecutor who is working with the task force, who has pointed out the facts related to insurance and upkeep and similar matters in interviews.
Now, as I said, Tango so far is the only yacht under arrest by the US Justice Department. If that has you a bit perplexed, then you might be thinking about a situation involving the motoryacht Flying Fox. Coincidentally, that situation occurred a few days before Tango’s arrest. American government officials did indeed board the yacht in the Dominican Republic, but they put her under detention. And to this date Flying Fox is still being detained.
So what’s the difference between being under arrest and being detained? Well, interestingly, both mean the yacht cannot move, she can’t depart, without government permission. But technically, custody of the yacht has not changed hands. Despite that, though, the owners of a detained yacht can’t just walk down the dock and get on board. Because chances are that the governments that are working together will detain them, and perhaps even arrest them under the sanctions orders.
Now, even with this understanding, the case of Flying Fox is still a bit convoluted, even for us. And it’s really due to two things in my view. First, a division of the department of Homeland Security, not the Justice Department, is officially detaining her. Now the two government agencies do overlap to a certain degree, but Homeland Security is a law enforcement agency, while the Justice Department prosecutes offenders and represents the U.S. in court. The division of Homeland Security that boarded Flying Fox investigates international crimes and threats.
Which leads me to the second reason why the detention is still raising some questions for us. So far, the agents involved in boarding Flying Fox are not commenting. We have reached out twice for clarification and further information. But we’re told, generally speaking, that if an investigation is still active, the officials handling the detention likely cannot comment. We will continue following this case. And of course, still press for some type of information and we’ll update you accordingly.
Well, speaking of comment, this leads me to address yet another area of confusion, which is what happens when a yacht is, quote unquote, seized. The term seize has been used by American officials like the Attorney General Merrick Garland, and the Deputy Attorney General Lisa Monaco. It’s in headlines all around the world, it’s in several news releases. For instance, in announcing the KleptoCapture task force, Merrick Garland said the following: “the Justice Department will use all of its authorities to seize the assets of individuals and entities who violate the sanctions.”
Now whether you look up that word in the dictionary if you’re a word geek like me, or if you even take an unofficial poll of a few dozen people on the street, the definition of seize means to take something quickly and forcibly, and even confiscate it. Therefore, it’s really no wonder that people mistakenly think that the U.S. government and other governments around the world have taken full ownership of the yachts that have been in the headlines. So far, though, in every case of a Russian yacht being detained or arrested, the ownership has not been stripped. In fact, in the case of the two super yachts detained in Spain so far, and those yachts are Crescent and Valerie, the government officials actually admit that they don’t have full confirmation of who the owners actually are, and therefore are continuing to investigate it.
Now, this brings me to the fate that these yachts may face. That really is the biggest question of all. Potentially, the Justice Department could choose to put the yachts up for auction. But it cannot do so first without a court ruling. It is up to a judge to decide whether the Russian yacht owners are acting essentially as agents of Putin’s government and, therefore, whether the sanctions orders were appropriately applied. The same situation applies internationally, other governments follow the same procedure. Now, whether it’s in the U.S. or it’s overseas, this process typically takes quite some time. It could be months, it could be a year; there’s really no way to know for sure. it’s compounded also by the fact that these owners will very likely contest the seizures and contest the orders for arrest if they do come. So that could make it drag out even longer.
What I do know for sure, though, is that we are continuing to monitor the developments related to all of these yachts. And just as the invasion of Ukraine is far from over, the circumstances surrounding these yachts will continue to develop for quite some time.
That’s it for this edition of Megayacht News Radio. Thank you as always for listening. Until next time, I’m Diane Byrne.
(voiceover) 11:42
That wraps up this episode of Megayacht News Radio. Thanks for listening. If you like what you hear, please share the word on social media and subscribe to us on Apple Podcasts, Audible, iHeart Radio, or Spotify. And of course to learn more about what’s going on in the world of large yacht cruising, new construction, and design, check out our daily updated website, the award winning megayachtnews.com.
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