SuperyachtNews.com – Business – Beyond the symbol


It is important to remember that superyachts are not ethical decision-making entities, they are amoral and largely loss-making assets…

It is not impossible to understand why the general public and the mainstream media have taken so much interest in superyachts since the Russian invasion of Ukraine and the subsequent sanctions imposed on various Russian individuals and their associates. However, it is important to remember that the superyachts themselves are arguably the least impactful assets sanctioned individuals own, however politicians may portray them.

They’re big and incredibly expensive, but in that regard, superyachts aren’t much different from some of the other assets owned by the world’s ultra-rich class of individuals. In fact, while it’s certainly not a message from the superyacht industry itself, once you remove the engines, tenders, submarines and Seabobs, there really isn’t little to distinguish a superyacht from a luxury mansion and in many cases yachts have less space, amenities and advanced technology than homes owned by the same people. Nevertheless, superyachts have become symbols of ill-begotten Russian wealth for two main reasons. First, you can see them, and second, you can track them.

It should be noted at this point that I am in no way advocating less pressure on sanctioned individuals or their assets, but simply a more objective awareness of what superyachts mean to those individuals. During an interview with a German news channel, I was asked the question: “What do superyachts mean to their owners and to what extent does their seizure put pressure on Putin and on the war?”

Superyachts are arguably the most luxurious and expensive assets in the world, but at the end of the day, they are platforms for recreation, even though they can be used for doing business etc. However, the idea that their eventual arrests or seizures would have any real impact on Putin’s determination to continue his war in Ukraine is somewhat far-fetched. In their most simplistic form, the sanctions were created to exert economic pressure on Putin and Russia by cutting off certain individuals from international markets and access to finance that could be co-opted for the war effort.

Certainly, if one were to sell some of the largest Russian superyachts in the world, it is possible that a significant sum of money would be raised, but how significant would this sum be compared to the price of a war? An estimate provided by Consultancy.eu suggests that the war is costing Russia, in expenses and losses, around 20 billion euros per day.

Excluding the potential sale of these assets from the equation, almost all superyachts are loss making. It is not without reason that the superyacht market often refers to “cost mitigation” rather than revenue generation. The freezing/seizure of these assets does not really have a tangible impact on the Russian economy’s access to wealth, other than to hinder a number of Russian owners, which is true.

Arresting superyachts, from a political point of view, is an easy victory. Governments around the world can be seen as asserting themselves against individuals with ties to the Russian economy and the Kremlin, albeit at varying degrees of separation. However, so far it has not even been suggested what the governments plan to do with the assets. It’s perfectly possible that these assets will become political currencies, but how important are these currencies to the one person whose opinion matters, Putin? Could it be that in the absence of legal proceedings and the eventual cessation of the war in Ukraine, the assets will simply be returned to their owners? Or is it likely that the assets will eventually be seized and sold? In this case, will the proceeds be used to support the regeneration of Ukraine, or will the proceeds be kept to line the pockets of governments and fill the holes left by their own policies?

Beyond the symbol


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James V. Hayes