A collaborative investigation by the BBC and the Bureau of Investigative Journalism has uncovered Roman Abramovich's elaborate tax evasion scheme involving his superyachts. The scheme, which deceptively classified his yachts as a commercial leasing operation, has brought scrutiny to his financial practices amid ongoing sanctions following the Ukraine invasion.
Abramovich's Superyacht Tax Dodge Unveiled: A Decade of Deception
Abramovich's Superyacht Tax Dodge Unveiled: A Decade of Deception
Investigative reports reveal Russian oligarch Roman Abramovich employed a sophisticated scheme using his luxury yachts to evade millions in taxes through misleading commercial operations.
Roman Abramovich, the Russian billionaire and owner of luxury superyachts, has been implicated in a complex scheme designed to mislead tax authorities and evade millions in VAT charges. An investigation conducted by the BBC and the Bureau of Investigative Journalism has unveiled that Abramovich, who was sanctioned by the UK in March 2022 due to ties with Vladimir Putin, reportedly chartered his fleet of luxury yachts while still reaping the benefits personally.
This scheme first came to light with the arrival of Abramovich's superyacht, Eclipse, in 2011, during which it appeared to be leased through companies registered in the British Virgin Islands, while maintaining his personal use of the vessel. Now, thousands of records and emails have been leaked from a Cypriot corporate service provider, MeritServus, exposing the intricate network of companies and trusts that facilitated Abramovich's tax evasive practices.
Italian tax lawyer Tommaso Di Tanno described the operations as "criminal," emphasizing evidence of tax evasion due to the artificial structures employed to hide the true nature of the yacht ownership. Abramovich's legal representatives have stated that he acted on professional tax and legal advice and denied any personal wrongdoing concerning the allegations.
The investigation has also shed light on financial arrangements involving five luxury yachts acquired by Abramovich during the 2000s. Documents reveal methods through which his management company, Blue Ocean Yacht Management, systematically misrepresented their commercial use. This included the backdating of charter agreements, intended to create the illusion of a legitimate commercial operation, thereby avoiding substantial tax liabilities.
In a damning 2005 memorandum, a director expressed concern about avoiding VAT on yacht purchases while also hoping to mislead investigators into believing the operation was sound. Such practices raise questions regarding the legitimacy of the businesses purportedly chartering the yachts, which investigators concluded were all controlled by Abramovich indirectly.
Despite past legal scrutiny concerning unpaid excise duties and VAT payment disputes in Cyprus, findings suggested that any substantial claims against Blue Ocean were ultimately undermined by the presentation of documentation claiming commercial use—a tactic that appeared carefully orchestrated.
As these revelations continue to unfold amid growing scrutiny over the ties of oligarchs to the Kremlin, organizations such as the International Consortium of Investigative Journalists (ICIJ) are emphasizing the need for transparency and accountability in financial practices surrounding luxury asset management.
Overall, the ongoing investigations reveal a systematic approach to tax evasion that exploits legal lacunae, placing significant attention on the need for more stringent regulations in offshore financial jurisdictions.
