Royal Romance will no longer be sold for the benefit of Ukraine, according to Ukrainian government officials. The 93-metre Feadship was initially seized in Croatia by authorities under EU sanctions. The intention was for Ukraine to sell the vessel at auction and use the proceeds to support their efforts in the ongoing conflict. However, recent developments have complicated this process significantly.

“In June, ARMA [Ukraine’s National Agency for Identification, Search, and Asset Management ] transferred $114 million from the management of seized assets, an increase of $78 million compared to May. But there is also bad news. ARMA cannot sell Medvedchuk's yacht seized in Croatia,” says Yaroslav Zheleznyak, People’s Deputy, in a statement.

“Moreover, Ukraine may lose this asset altogether. The Split District Court cancelled the seizure of the yacht due to the lack of an indictment in the criminal case from the Prosecutor General's Office. Let me remind you that the yacht is valued at $200 million– a significant amount for the budget and the army.”

The timeline of the Royal Romance saga is increasingly convoluted. Previously owned by Viktor Medvedchuk – a former Ukrainian politician accused of high treason – the yacht faced significant legal and procedural challenges since its seizure.

In April 2022, at the request of the Ukrainian Prosecutor General’s Office, the District Court of Split approved the seizure of the yacht for an initial period of two years, with the court requiring regular reviews of its validity. During this time, Ukrainian prosecutors and investigators, in cooperation with US partners, located the yacht and obtained evidence that it had been transferred to Medvedchuk’s wife through offshore entities.

In May 2023, ARMA, together with the Cabinet of Ministers of Ukraine, drafted amendments to regulatory acts to facilitate the management of foreign assets. However, delays due to changes in ARMA leadership meant that a consolidated position on these changes was not reached until November 2023, with the final decision made in February 2024.

By 20 March 2024, ARMA began the process of trying to sell the yacht. Despite these efforts, persistent legal and procedural delays have obstructed the sale of Royal Romance. As a result, on 25 June this year, the Split District Court in Croatia cancelled the seizure of the yacht due to the Ukrainian Office of the Prosecutor General's failure to submit a necessary indictment. This decision challenges the legal basis for the ongoing seizure and puts its future at risk. There is now a significant possibility that Royal Romance could be returned to its original owner if these legal issues are not swiftly resolved.

However, on 19 July, the Pechersk District Court of Kyiv escalated legal actions by granting the Prosecutor General’s request to seize the yacht and hand it over to the ARMA based on evidence of possible illegal property legalisation by Medvedchuk involving fictitious sales through offshore companies.

Meanwhile, the EU has imposed further personal sanctions on Medvedchuk and his wife, resulting in the yacht being detained in the port of Trogir, Croatia, under indefinite sanctions by the Standing Sanctions Group. This measure prevents the yacht from leaving EU territory.

While Ukrainian authorities claim they are still working on a mechanism that will allow the yacht to be sold, the complications arising from the Croatian court’s recent decision and ongoing legal and regulatory hurdles jeopardise the yacht’s sale and ownership status. Ukraine has not yet relinquished technical ownership, but if these issues are not resolved swiftly, authorities risk losing possession of Royal Romance entirely and it may be returned to its original owner.

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