After authorities seized $16 billion worth of mega yachts owned by Russian Oligarchs amid sanctions over the conflict in Ukraine, authorities have been warned the vessels pose a “significant risk” to ports, harbours and marinas.
The warning comes from marine surveyors and engineering consultants Van Ameyde McAuslands amid concerns there are no requirement to ensure these mega yachts detained under sanction rules are properly maintained, made safe or deactivated.
It follows the seizure by port authorities across Europe of a number of high-profile mega yachts thought to be owned by Russian oligarchs on the list to be sanctioned over their links with Russian regime.
In London’s Canary Wharf authorities seized the $38 million Phi (above). The $75 million Axiom was seized in Gibraltar, and in Italy, authorities boarded the $540 million SY A, one of the world’s largest privately owned yachts. Yachts thought to be worth more than $16 billion are being held across Europe, in Finland, France, Norway, Spain, and Germany.
“When a vessel is seized it may no longer be in class and under flag, and any insurance, including P&I and H&M, is likely to have already been revoked, says Albert Weatherill, managing director, Van Ameyde McAuslands, UK. “From that moment the yacht, by default, becomes a liability of the state. And without insurance, proper loss prevention measures need to be in place to avoid losses and claims. Potential litigation could run into millions of dollars if assets are not properly made safe or shut down correctly. These are not vessels that can be simply turned off and walked away from.”
Normally, the annual upkeep of a mega yacht can exceed $50 million, with flag state requirements calling for minimum manning and planned maintenance. But according to the surveying firm, there is confusion over who will be responsible for carrying out routine maintenance if any is being carried out at all.
“If crews are not being paid and walk away or if sanctions prohibit maintenance, what happens if there’s a pollution incident? What happens if the vessel comes adrift or catches fire, if there’s theft or the vessel is sabotaged? There are too many unknowns, and in this industry, unknowns often equate to litigation,” Weatherill added.
Van Ameyde McAuslands believes that seizing authorities, flag states, should be aware of the need to take immediate action when a vessel is impounded. Indeed, it is thought that none of the seized yachts to date have been prepared for lay up or surveyed to prevent pollution or disruption to the port.
“These vessels need to be as safe as possible on the mooring,” added Weatherill.
While it is difficult to predict how long these vessels are going to remain alongside, to make them safe machinery should be deactivated, systems drained down, discharge overboard valves closed, fire systems checked and engines prepared for cold lay-up in accordance with Classification Society and OEM guidelines.
“This will prevent any potential damage to machinery, internal cabins, valuables, limiting financial exposure and liability. It will also safeguard against any potential risk to the maritime infrastructure, the environment and the public at large,” said Weatherill. “Manning, deterioration, damage, fire, theft, danger to people and property – these are all very serious issues. When vessels are dormant for long periods there is potential for things to go wrong and when there is no insurance safety net to fall back on, it’s a big problem. We’re in unchartered territory.”