Krna Gora in trouble: Russian yachts confiscated and destroyed, owners sue

The freezing of movable and immovable property of Russian citizens is causing more and more problems around the world, especially in Europe. A clear example is the confiscation of yachts and superyachts of wealthy Russians, which leaves the states in which they are located in a difficult position.

These luxury vessels require a lot of care, including regular maintenance, and for some it can even cost $1,000 a day. If the yachts are not properly maintained, the owners are threatened with lawsuits and the states are forced to incur huge costs to maintain them in the condition in which they were seized. It can cost more than $100 million to maintain a single superyacht - otherwise an environmental disaster is threatened, reports Jutarnji.hr.

Also, until the war in Ukraine is over, these vessels must be serviced, lubricated and cleaned daily. Their engines and other metal parts rust, inactive air conditioning causes mold in the cabins, and all onboard systems - from desalination units to pumps - must be serviced regularly. The ship must be washed at least once a week to remove salt and dirt and thus avoid multi-million dollar repainting, Slobodna Dalmacija reports.

Together with the inspection of fastenings and ropes, lubrication and other necessary work, such a vessel usually requires at least half of its crew, which is usually around 30 people, on duty (and on full salary). Insurance companies require regular maintenance, and paying for a policy that protects a vessel from sinking, flooding or fire is an additional huge expense. If you add port fees, which for such vessels, for example, in the U.S. are almost $1,000 a day, the annual cost of keeping a Russian yacht at a berth in an American port is about $10 million.

Gibraltar is home to the largest sailing yacht in the world, Andrei Melnichenko's $550 million Sailing Yacht A, with a mast taller than Big Ben. Rosneft head Igor Sechin's 'Amore Vero' is frozen in France and 'Crescent' is frozen in Spain. Germany is holding the 512-foot-long, $600 million Dilbar megayacht of sanctioned Russian billionaire Alisher Usmanov in its ports,... The total value of the seized Russian megayachts is at least $4 billion, according to Bloomberg News.

How will this financial conundrum be resolved? Even by the most conservative estimates, the U.S. and Italian governments alone would have to allocate at least $50 million annually to maintain confiscated ships from Russia's wealthy fleet.

When it comes to Montenegro, we also have a yacht that the media has already written about. Superyacht "Luminosity" by Andrey G. Gurieva has been at the Porto Montenegro Marina in Tivat since March last year and is owned by one of the Russian oligarchs on the sanctions list. Guriev's yacht, whose flag belongs to the Cayman Islands, is valued at around 120 million euros. Guriev, however, is unable to pay for the maintenance of this megayacht due to sanctions, so the vessel is effectively abandoned and should be taken care of by the Porto Montenegro Marina or the state of Montenegro. It is difficult to estimate how much this costs at this time, but the Porto Montenegro website, in the section on yachts, states, as one of the tips that owners should consider, that "if the yacht is active in the Mediterranean, the total annual maintenance cost can be around $770,000, and management costs can be 15% higher than the total." Experts also note the need for mandatory vessel insurance, which translates to more than a million dollars. And perhaps the problem will not be that Montenegro, Porto Montenegro and other companies will not have this income over a million dollars, but that Guriev may, as stated, sue for damages in one of the international courts.

It should be remembered that even 20 Russian oligarchs, and it seems likely that there will be more, are suing the European Union because they have been punished, for example, by the confiscation of luxury villas and the banishment or confiscation of yachts from the most attractive marinas in the world. The oligarchs are trying to attack in the European Court of Justice in response, and a host of companies affected by Brussels' decisions are also on the counter-offensive.

By the way, for 44 properties in Montenegro, the Directorate of Cadastre and State Property has issued relevant decisions that restrict the disposal of the property and relate to 34 Russian citizens who have been sanctioned. The final outcome awaits the Constitutional Court, where two initiatives have been filed to assess the constitutionality of the decision to freeze the property of Russian citizens in Montenegro. If legal experts' warning turns out to be correct that the property freeze is unconstitutional, Montenegro is likely to face lawsuits seeking multi-million dollar compensation.