Sanctions-Related Seizure of Sailing Yacht A Stands—for Now

The seizure of Sailing Yacht A remains in place following a ruling by the highest court in the European Union. The lawsuit that led to the decision is far from over, however, for either the owner or the Italian authorities detaining the yacht.

Andrey Melnichenko, the ultimate beneficial owner of the 468-foot (143-meter) sail-assisted yacht, has been challenging the seizure since May 2022. The Italian prime minister’s office announced the arrest of Sailing Yacht A in Trieste in March 2022, weeks after she arrived. Just prior to the yacht’s arrival, the EU sanctioned Melnichenko in relation to Russia’s invasion of Ukraine.

Initially, the registered ownership company, controlled by a trust, sued to overturn the sanctions and yacht freeze. It disputed the seizure of Sailing Yacht A on the grounds that the original controlling trust belonging to Melnichenko transferred control to another trust belonging to Melnichenko’s wife, and did so prior to the sanctions. Furthermore, it argued, since both trusts ultimately were sanctioned, the beneficiaries had no control over their trusts’ assets.

seizure of Sailing Yacht A — PHOTO: Kieler Seagull

The Lazio Regional Administrative Court in Rome, hearing the case since 2022, submitted a request with the Court of Justice of the European Union in May 2024. It asked the higher court to take up a preliminary ruling. A preliminary ruling allows EU country courts to obtain clarity about EU law interpretation or an EU act’s validity. At issue were questions as to whether, under EU sanctions, the concepts of “belonging to” and “control” extend to trust beneficiaries, even when those beneficiaries can’t dispose of the assets. According to the higher court, those concepts encompass all forms of power or influence over the assets. Additionally, “indications that assets belong to or are controlled by the beneficiary or the settlor may be inferred from factual circumstances or from the presence of needlessly complex legal structures.”

Notably, the Court of Justice decision isn’t a ruling for this lawsuit. Rather, that responsibility lies with the Lazio court, which now continues to hear the case with the clarification in mind. Meanwhile, Sailing Yacht A remains in Trieste. The estimated $11.5 million (€10 million) in annual maintenance also continues to be paid by local authorities, provided by the Italian treasury. When Italian authorities seized the yacht, they estimated her value at approximately $611 million (€530 million).

The sail-assisted yacht, the largest of her type in the world, is one of multiple assets that Melnichenko has been unable to access following sanctions tied to the Russian invasion of Ukraine.