Abramovich's Superyacht Tax Evasion Scheme Uncovered

A detailed investigation has exposed Roman Abramovich's complex scheme to evade millions in taxes through the misleading use of his luxury yachts, revealing potential criminal activity and raising questions about corporate governance.

Roman Abramovich, the Russian billionaire and former owner of Chelsea Football Club, has been implicated in a sophisticated tax evasion scheme involving his fleet of luxury yachts. This revelation follows an extensive investigation conducted by the BBC and the Bureau of Investigative Journalism, unveiling how Abramovich circumvented millions in taxes over a decade.

In December 2011, during the festive season, Abramovich was photographed on his lavish superyacht, Eclipse, while it was purportedly chartered by a British Virgin Islands-based company. This misleading documentation was part of a larger scheme that classified his personal yachts as commercial vessels to avoid substantial VAT payments associated with their acquisition and operational expenses.

Expert legal opinions have labeled Abramovich's actions as criminal, with Italian tax attorney Tommaso Di Tanno stating, "There has been tax evasion," further emphasizing the illegality of deliberately misrepresenting financial activities to evade tax responsibilities. Despite being sanctioned by the UK in March 2022 due to his association with Vladimir Putin's regime, Abramovich's legal team asserts that he always sought independent, professional tax and legal counsel, acting in accordance with that guidance.

Leaked files from a Cypriot corporate service provider reveal that a network of trusts and companies controlled by Abramovich facilitated this deception. His yachts, including the 162.5m Eclipse — once the largest private yacht globally — were leased to a Cypriot entity known as Blue Ocean Yacht Management, which then chartered them to various firms in the British Virgin Islands, all controlled by Abramovich. The convoluted corporate structure was designed to obscure ownership and operations from scrutiny.

Evidence from a 2005 memo outlined plans to evade VAT, confirming that Abramovich's team recognized the risks involved. The memo advised that to appear legitimate, no common ownership or affiliation should be evident in the companies involved. It was also noted that Blue Ocean's financial statements oddly exhibited minimal profits, suggesting deliberate attempts to align income and expenses closely to avoid tax liability.

Moreover, inconsistencies, such as backdated charter agreements and accusations of creating false documentation to secure tax advantages, further illustrate the complexities of this alleged fraud. Tax experts have highlighted misrepresentation in leasing contracts typically reserved for commercial shipping operations, which adds to the claims of tax evasion.

Investigation efforts have faced legal challenges, with claims made against Abramovich's yacht operators, including disputes over unpaid taxes in Cyprus totaling up to €17m. Despite these legal entanglements, investigations found Blue Ocean lacked evidence supporting its assertion that the yachts operated commercially, with the Cypriot tax authorities ultimately pursuing lower claims due to insufficient evidence.

The International Consortium of Investigative Journalists spearheaded the Cyprus Confidential investigation, revealing systemic issues within corporate practices linked to associates of the Putin regime. As the saga of Abramovich’s superyacht dealings unfolds, the scrutiny surrounding his financial empire and connections to political elites continues to intensify.