Abramovich's Yachts Scheme: A Deep Dive into Alleged Tax Evasion Tactics

A recent investigation has unveiled that Roman Abramovich orchestrated a complex scheme to evade millions in VAT taxes through the chartering of his superyachts. Leaked documents indicate a deliberate effort to present his fleet as part of a legitimate commercial operation, while evading tax obligations using a series of interlinked corporate structures.

A recent investigative report has shed light on a sophisticated scheme by Russian oligarch Roman Abramovich, allegedly aimed at evading millions in value-added tax (VAT) through his fleet of luxury superyachts. The investigation, conducted by the BBC and the Bureau of Investigative Journalism, has revealed that enrolled yacht charters, including his opulent vessels Eclipse and Pelorus, were part of a decade-long operation to mislead tax authorities.

Documents from a massive leak, consisting of more than 400,000 files and 72,000 emails, highlight how Abramovich employed a network of companies and trusts aimed at obscuring his ownership and operational control over the yachts. These records indicate that his fleet was falsely represented as a commercial leasing operation to avoid substantial VAT payments on the yachts and their upkeep.

Italian tax expert Professor Tommaso Di Tanno characterized this operation as "criminal," asserting, "There has been tax evasion." Meanwhile, Abramovich's representatives maintain that he acted according to professional tax and legal advice. The billionaire, who is currently under UK sanctions due to his ties to Vladimir Putin, purchased five luxury yachts during the 2000s that are implicated in this alleged tax dodging scheme.

Specifically, the leaked documents outline a detailed 2005 proposal for the "Operating Structure" of Abramovich's yacht management, which explicitly aimed to elude VAT payments. This involved creating false appearances of independence between the companies managing and chartering the yachts, although these firms were ultimately controlled by Abramovich's trusts.

A 2005 memo authored by Jonathan Holloway, then at Blue Ocean Yacht Management—the firm managing Abramovich's yachts—stressed the importance of creating a facade that would withstand scrutiny. He cautioned collaborators to separate the shareholders and directors to obscure ownership, noting, "We all have to recognize that a determined investigator could eventually discover this is an in-house structure."

Despite the arrangement appearing like an authentic commercial endeavor, tax experts view the operation as an artificial construct intended to evade legal responsibilities regarding VAT. Rita de la Feria, another tax specialist, spotted signs that suggested misinformation, indicating that if such misrepresentation exists, what began as tax optimization could escalate to tax evasion.

Abramovich’s tax strategies came into judicial scrutiny on various occasions, particularly in Italy, where he faced ongoing investigations regarding unpaid excise duties and tax evasion. While earlier investigations raised serious questions, legal services reportedly staved off significant repercussions for musicians associated with Abramovich's fleet.

However, the Department of Taxation in Cyprus did pursue repayment on nearly €17 million (£14.3 million) tied to VAT dues, as officials expressed skepticism over Blue Ocean's claim that their operations qualified for a VAT exemption because they were commercial in nature. Ultimately, the precedent from previous investigations necessitated that evidence of the yachts’ commercial operations be presented, which Blue Ocean reportedly failed to deliver.

The investigation brings to light the broader implications of corporate structures established for tax purposes, raising awareness about the potential for high-net-worth individuals to exploit legal loopholes while highlighting the necessity for ongoing oversight in wealth management practices.

This investigation forms part of the larger Cyprus Confidential effort, initiated by the International Consortium of Investigative Journalists in response to expanding concerns surrounding the financial dealings of individuals with close ties to the Kremlin, culminating in powerful insights into the relationship between wealth, power, and accountability.