In December 2011, while Roman Abramovich's superyacht, Eclipse, appeared to be rented out through a company based in the British Virgin Islands, photographs captured him enjoying the holiday season aboard his lavish vessel in the Caribbean. This juxtaposition raises serious questions about a vast scheme aimed at misleading tax authorities, exposed by a collaborative investigation between the BBC and the Bureau of Investigative Journalism.
The investigation reveals that Abramovich, who has faced sanctions from the UK government due to his ties with Vladimir Putin's regime, employed this scheme to misrepresent his fleet of luxury yachts as commercial leasing, successfully dodging substantial VAT fees linked to their acquisitions and operations. Italian tax experts characterize the activities as criminal tax evasion, with legal teams for Abramovich insisting that he acted responsibly based on professional advice.
Over the years, Abramovich acquired five notable yachts—including the famed Eclipse, originally the world's largest private yacht, valued at around $700 million— interweaving them into a corporate structure managed by a Cypriot firm called MeritServus. Leaked documents comprising over 400,000 files anchor the investigation, providing detailed accounts of how these vessels were leased back to controlled companies under a facade of independent operations.
In 2005, a memo initiated the complex “Operating Structure” meant to circumvent VAT, detailing how to obscure the true nature of yacht management. According to the report, returns suggest that Blue Ocean Yacht Management, ostensibly the service provider, maintained artificial expenses to offset any possible profits, consequently eliminating corporate tax liability.
Leaked correspondence further indicates that charter contracts were often backdated or constructed under misleading terms—projects meant to conform to commercial standards but utilized for personal enjoyment instead. Investigators have raised concerns that such maneuvers could signify overt tax misrepresentation, plunging deeper into the realm of illicit tax evasion.
While two separate investigations scrutinized Blue Ocean, including potential cases for several unpaid excise duties, they eventually concluded without adequate evidence against Abramovich himself, often due to rapid legal responses from his legal teams. However, substantial unpaid VAT claims amounting to €14 million remain a possible outstanding obligation.
The ongoing “Cyprus Confidential” investigation continues to unravel connections between Abramovich’s corporate dealings and Russian state affiliates, illuminating the challenges faced by regulatory bodies when tracing financial undertakings obscured by layers of offshore complexities.
