The US government has revealed it is paying over £7 million annually to maintain Amadea, which was seized from a sanctioned Russian oligarch. In a recent court filing, government officials advocate for a swift auction of the vessel amid an ongoing dispute regarding its ownership.

The 106-metre Lürssen was impounded by authorities in Fiji in May 2022, based on a US warrant alleging ownership by Suleiman Kerimov. Kerimov, a multibillionaire, was sanctioned by the Treasury Department in 2014 and 2018 for his involvement in Russia’s actions in Syria and Ukraine.

The auction proceedings face opposition from Eduard Khudainatov, former head of the Russian state oil and gas company Rosneft from 2010 to 2013, who claims rightful ownership of the vessel. Khudainatov argues that the yacht should not be forfeited as he has not faced sanctions himself.

In a recent court filing, federal prosecutors in Manhattan highlighted the considerable monthly maintenance costs of approximately £600,000 for Amadea, deeming them excessive and warranting an auction. They further noted the breakdown in negotiations with Khudainatov regarding payment for the vessel’s upkeep.

According to the US Marshals Service, the running of the yacht is costing the US taxpayer around $165,000 in maintenance, $75,000 in fuel and $360,000 for crew salaries each month. There is also the additional cost of insurance, which amounts to $1.7 million. The overall figure is set to rise again, as Amadea is being moved to a dry dock, which is expected to cost in the region of $5 million.

The yacht’s seizure coincides with escalated sanctions enforcement by Washington against individuals linked to Russian President Vladimir Putin, aiming to pressure Moscow to cease its conflict with Ukraine. If the auction proceeds, the US government is expected to eventually transfer the sale proceeds to Ukraine.

Previous court submissions from prosecutors asserted that Khudainatov is acting as a front for Kerimov to obscure his involvement and that the maintenance payments are vital for preserving the yacht’s value.

Prosecutors allege that Kerimov violated US sanctions by executing maintenance payments exceeding £1 million for Amadea through the US financial system, rendering the vessel, currently stationed in San Diego, liable for forfeiture.

Khudainatov has until 23 February to respond to the prosecutors’ request. His legal team has labelled the motion to sell the yacht as “premature” and urged the judge to withhold approval until determining the constitutionality of the seizure.

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