Where Did All the Oligarchs’
Superyachts Go?
Photographer: Ethan Swope/Getty Images South America
By
Superyacht Suspected Of Being Tied To A Russian Oligarch
Docked In The Dominican Republic
Photographer: Ethan Swope/Getty Images South America
ByLionel Laurent
August 8, 2022 at 5:00 AM GMT+1
Tourism in wartime has created a new kind of beach activity
— tracking superyachts linked to Russian wealth.
These temples of conspicuous consumption, which got a huge
boost in orders during the pandemic, are symbols of the new geopolitical order
dominating soft-power travel hot spots like the French Riviera.
Boats linked to Russian oligarchs not known for their
discretion have gone “dark” and sailed to friendlier shores like Dubai or
Turkey, keen to escape the fate of over $30 billion sanctioned assets seized by
governments looking to squeeze Vladimir Putin’s inner circle. Spain, Italy and
France are among those impounding yachts; dozens are also blocked in Dutch
shipyards.
Beyond what Joe Biden terms “ill-gotten gains,” ostentatious
displays of wealth are also firing up public opinion at a time when energy
poverty is leading to calls for windfall taxes. Jeff Bezos’s 127-meter, $500
million superyacht narrowly avoided an egg-pelting in Rotterdam by angry locals
after a plan to dismantle a historic bridge to allow it to sail through was
dropped.
A frosty reception for wealthy Anywheres might seem a minor
inconvenience. Yachtmakers like Italy’s Sanlorenzo can still expect
double-digit revenue and profit growth this year, partly because the euro’s
slump has boosted the US dollar’s buying power — and because demand for status
symbols is as deep as the ocean.
But if Europe is “for sale,” as American tourists shopping
on Paris’s Avenue Montaigne say, its determination to be a soft power without
being a soft touch is more urgent than ever this summer.
The enforcement of yacht seizures is being accompanied by an
EU crackdown on easy routes into its single market for offshore wealth. Golden passport and visa
schemes that offered EU citizenship or residency rights for anywhere between
60,000 euros to 1.25 million euros ($1.27 million) are being scrutinized and
potentially scrapped after a string of money-laundering scandals.
Intended to revive investment after the financial crisis,
these schemes have been too light-touch for their own good, with Cyprus
allegedly breaking its own laws after handing swathes of passports to rich
Russians. The approval of Portuguese golden visas to China’s ultrarich has
evaporated. The EU partially halted visa waivers to Vanuatu after its own
passport scandal.
The anonymity of offshore wealth is also under fire. If
identifying superyacht owners is hard, it’s because of the matryoshka doll
structure of shell companies that owns them. The UK this month launched a
registry of overseas entities owning property, even if the proposal’s flaws
make it far from perfect. Outgoing Italian Prime Minister Mario Draghi has
called for an international asset register for the oligarchs.
It takes a deft hand to ensure that geopolitical reputation
takes precedence over economic expediency. Flexible digital nomad visas for
remote workers appear to be the new post-Covid battleground for overseas cash,
even if we are a long way from the days when a tech mogul like Snap’s Evan
Spiegel could get a French passport based on little more than his Idaho
grandmother’s French cookbook.
Still, the rebound in summer tourism represents an opportunity
to flex soft-power muscles. Cyprus, a favourite destination for Russians, is
down about 25% compared with 2019; Finland is calling for restrictions on visas
for Russians. Regional and American tourists have helped offset the drop, with
foreign-policy values and Ukraine solidarity featuring in social-media
sentiment, according to Olivier Henry-Biabaudof TCI Research, a Belgian
travel-industry consulting firm. Research firm Oxford Economics expects
arrivals to Western Europe this year to be 21% below 2019 levels, compared to a
forecast 39% fall for Eastern Europe.
A Cold War-ification of travel may seem like cold comfort
when Europe faces recession this winter. The tourism economy is not going to
bring energy independence or manufacturing growth to a region sorely in need of
both. The weak euro travelers love is not a point of political pride.
But yacht-spotting should at least bring recognition of an
EU more focused on political unity and fighting the money flows that aggravate
inequality. For once, fewer eyesores on the water will be more than just an
aesthetic win.
This column does not necessarily reflect the opinion of the
editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Lionel Laurent at llaurent2@bloomberg.net
To contact the editor responsible for this story:
James Hertling at jhertling@bloomberg.net
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