Tuesday, August 2, 2022

Court considers whether US can seize Russian yacht in Fiji

WELLINGTON, New Zealand — At Port Lautoka in the heart of Fiji’s sugarcane region, five U.S. federal agents boarded the Russian-owned Amadea, a luxury superyacht the length of a football field.

“They want to sail east with a crew of 20!” the ship’s captain sent a frantic WhatsApp message on May 5 to lawyer Feizal Haniff, who represents the legal owner of the super Yachting company.

“When?” Hanif wrote back, court documents obtained by The Associated Press show. “Please wait. Please wait. Can you hold on. I need a judge. I’m calling everyone.”

The case underscores the thorny legal underpinnings the U.S. has found as it tries to seize the assets of Russian oligarchs around the world. Those intentions have been welcomed by many governments and citizens opposed to the war in Ukraine, but some actions have raised questions about how far U.S. jurisdiction extends.

In Fiji, agents boarded the ship after an initial legal victory, and a lower Fiji court granted a U.S. arrest warrant.

In Washington, the Justice Department rushed out a press release. “At the request of the United States, Fiji seized the yacht of sanctioned Russian oligarch Suleiman Klimov worth $300 million,” it wrote.

But Hanif argues that the US has already fired. Hanif argues that whatever evidence or suspicion the FBI has about the ship, they have no right to control it, let alone drive it away.

That’s because Hanif had filed two legal appeals before the agents came aboard, arguing that the real owner was another wealthy Russian — one who didn’t face sanctions — and that the U.S. had no jurisdiction under Fiji’s Mutual Assistance Act The right to seize the ship at least until the court finds out who actually owns Amadea.

The Fiji Court of Appeal decided to take up the case and hear arguments on Wednesday. Amadea is now back under the watch of the Fiji police.

A captain looks at the superyacht Amadea, moored at Queens Wharf in Lautoka, Fiji.
Associated Press

The FBI linked Amadea to the Kerimov family through the alleged use of code names on the boat and the purchase of items such as a pizza oven and spa beds. The ship was the target of Task Force KleptoCapture, which was launched in March to seize the assets of Russian oligarchs to pressure Russia to end the war.

Shortly after Russia invaded Ukraine and traveled from the Caribbean to Mexico via the Panama Canal, Amadea turned off its transponders and arrived with more than $100,000 in cash, court documents said. It then sailed thousands of miles across the Pacific to Fiji.

The Justice Department said it did not believe documents showing Amadea’s next trip to the Philippines and believed it was indeed destined for Vladivostok or elsewhere in Russia.

The department said it found a text message on a crew member’s phone: “We’re not going to Russia” followed by a “shh” emoji.

Court documents show that the company Haniff represents, Millemarin Investments, is the rightful owner of the Cayman Islands-flagged superyacht, while Millemarin is owned by Eduard Khudainatov, the former chairman and chief executive of Russia’s state-owned oil and gas company Rosneft official. Khudainatov, who is not facing sanctions, filed an affidavit saying he owns Amadea.

Russian oligarch Suleiman Klimov, alleged owner of the Amadia.
Getty Images

When U.S. agents boarded the ship, Hanif feared that he might never get a chance to defend his case in court, as the Amadea could head to the United States — possibly American Samoa, Hawaii, or even San Francisco.

He has prepared a drastic draft appeal accusing US authorities of roughing up Fiji’s sovereignty after meeting a lower court judge who was “shocked” by a US arrest warrant. He said they had tried to bribe the young crew of the yacht to sail it to the U.S. and threatened to cancel the crew’s U.S. visas.

“The conduct of the US authorities in Fiji regarding Amadea is appalling,” he wrote in a draft, which he never submitted as the appeals court took up the case.

A Justice Department official who was not authorized to discuss the matter by name and spoke to The Associated Press on condition of anonymity said the U.S. agents who boarded the ship did so under a valid search warrant and had a Fiji presence throughout. accompanied by the authorities.

“Following the initial approval of the arrest warrant, there are further proceedings,” the official acknowledged, adding that the United States took appropriate action under both U.S. and Fiji law.

Other claims, such as bribery, are categorically false, the official said.

“We are seeking contracts with various service providers to transport this ship,” the official said. “Characterizing these contract negotiations as anything else is groundless.”

Fiji initially imposed a lockdown on Amadea on 13 April 2022.
Fiji initially imposed a lockdown on Amadea on 13 April 2022.
Fiji Sun/AFP via Getty Images

In court documents, the FBI alleges that economist and former Russian politician Klimov is the true owner of Amadea, a 106-meter (348-foot) boat with a live lobster tank, hand-painted piano, swimming pool and A large helipad.

Kerimov made his fortune investing in Russian gold producer Polyus, and Forbes magazine puts his net worth at $15.6 billion.

The United States first imposed sanctions on him in 2018 after he was detained in France and accused of money laundering there, and he sometimes arrived with a suitcase full of 20 million euros.

The U.S. acknowledged that paperwork appeared to indicate Khudainatov was the owner, but said he was also the owner of a second and even larger superyacht, Scheherazade, linked to Russian President Vladimir Putin. The United States questioned whether Hudanatov could really afford two superyachts with a combined value of more than $1 billion.

“The fact that Khudainatov is believed to be the owner of the two largest superyachts on record, both linked to sanctioned individuals, suggests that Khudainatov was used as a clean, unapproved straw owner to hide the real Beneficial owner,” the FBI wrote in the court affidavit.

Suleiman Kerimov is seen on the left during a visit to Sochi by Russian President Vladimir Putin in 2019.
Suleiman Kerimov is seen on the left during a visit to Sochi by Russian President Vladimir Putin in 2019.
Getty Images

The US claims that Klimov secretly bought Amadea last year through a shell company. The FBI said the Fiji search warrant showed information directed to Klimov on the ship’s computer. The emails show that Klimov’s children were on board this year, and the crew used code names — G0 for Klimov, G1 for his wife, G2 for his daughter and so on.

The FBI said the Klimov family’s ownership was evident in the changes they made to the superyacht, such as adding more electrical outlets in the bathrooms, and their involvement in approving new pizza ovens and spa beds. The crew discussed a possible “upcoming G0 guest trip” and noted that he wanted the fastest jet ski – so they would need to buy a new jet.

Hanif argued on appeal that the U.S. case was based on rumors and rumours spread by unnamed crew members and there was no evidence that Khudainatov could not afford to invest in the two superyachts.

He said the FBI’s evidence only showed that Kerimov’s family may have been guests on the ship.

“It’s thin stuff,” Hanif wrote in his appeal. “The ultra-rich are a tribe who live a different life than the rest of us: they have privileges and luxuries in goods and services that are far removed from the ordinary experience. That doesn’t say anything about ownership.”

In a week or two, an appeals court is expected to decide what happens next to Amadea.

US News.

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