Roman Abramovich's Yacht Tax Evasion Scheme Exposed in Investigative Report

An investigation reveals that Roman Abramovich allegedly set up a fraudulent yacht charter scheme to avoid paying taxes in Europe. The findings suggest criminal intent, backed by expert tax opinions, as the oligarch’s team manipulated corporate structures and charter agreements to disguise the operation.

In December 2011, Russian billionaire Roman Abramovich was seen celebrating Christmas aboard his luxury superyacht, Eclipse. However, unknown to tax authorities, the yacht had been chartered out under a scheme designed to skirt millions of euros in VAT. This complex operation, recently unveiled by an extensive investigation by the BBC and the Bureau of Investigative Journalism, misrepresented Abramovich's fleet of yachts as a legitimate leasing business, raising serious allegations of tax evasion.

Italian tax expert Tommaso Di Tanno described the findings as a clear case of criminal activity aimed at tax evasion. He stated, "This is criminal," supporting the notion that the setup was a deliberate attempt to mislead tax departments. Abramovich's legal representatives, meanwhile, insisted he had always acted on expert tax advice and in compliance with legal standards despite the damning evidence gathered.

The investigation highlighted that Abramovich, sanctioned by the UK due to his ties to Vladimir Putin's regime, owned five superyachts that participated in this scheme. Key vessels include Eclipse and Pelorus, the latter infamously lent to Chelsea footballer John Terry during his honeymoon. Discovered through a substantial cache of leaked documents and emails, the scheme's details depict how Abramovich's advisors created a façade of legitimate commercial activity to evade VAT on purchases and operational costs in EU waters.

In their report, the BBC and its partners point to over 400,000 files detailing the intricate web of companies set up under trusts linked to Abramovich, showcasing how he deceptively hired his own yachts through a network designed to avert scrutiny. A memorandum from 2005 on the proposed operation structure outlined the plans to minimize tax liabilities, suggesting a clear awareness among the involved parties of the legal risks they were undertaking.

Despite his lawyers' claims that Abramovich was not involved in any self-deception, evidence suggests he was deeply embedded in a structure aimed at tax avoidance. Tax expert Rita de la Feria noted that the clues point to misrepresented information, thereby suggesting potential evasion.

Legal troubles for Abramovich's yacht operation were not entirely absent. Investigations in both Italy and Cyprus have shown that authorities probed the financial practices of Blue Ocean Yacht Management, the entity tasked with managing the yachts. Reports surfaced of unpaid VAT to the tune of €17 million, yet the company maintained its appeal of zero-rated VAT due to its claimed commercial operations.

However, court rulings suggested that Blue Ocean provided insufficient evidence showing the yachts were genuinely used for commercial purposes, leading Cyprus to pursue a lower claim. The situation mirrors a broader investigation into Russian oligarchs operating in offshore jurisdictions where regulatory loopholes remain abundant.

These developments not only shine a light on Abramovich's operations but also reflect ongoing geopolitical tensions and scrutiny surrounding wealthy individuals closely linked to the Russian state. The "Cyprus Confidential" investigation, backed by a consortium of leading international journalists, continues to monitor the pervasive connections between Russian elites and offshore financial activities, emphasizing the importance of transparent governance in the face of such complex tax avoidance schemes.