Sanctions and superyachts: keep working

Sanctions and superyachts: keep working

How the difficult relationship between the West and Russia affects the big yacht industry.
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Colleagues at have talked to superyacht industry experts about Russian customers and the atmosphere in the market. We share the translation of the article.

For the superyacht industry, Russian clients - both buyers of new and used yachts and tenants - make up the lion's share of demand. Wealthy Russians are known for their love of living on a wide foot and spare no money to buy yachts, their rent and all kinds of services, including helicopter charters, orders for expensive wines, equipment and entertainment.

The exact number of Russians who own yachts or regularly rent them is unknown, as usually shipyards and brokers sign non-disclosure agreements, but it is no secret that Russian clients are among the first in this market. (Note: among the owners of the world's longest boats, Russians are slightly inferior to Arab sheikhs and American tycoons.)

«I haven't talked to my Russian clients in three weeks and this is the first time in six years," says Bjorn Moonen of Ghost Yachts, a Dutch company. - The collapse of the Boeing-MH17 and subsequent sanctions have affected the yachting industry, especially the wealthiest clients».

However, Sergei Dobroserdov, a yacht designer and owner of Nakhimov, a Monaco-based brokerage firm, is Russian by nationality and claims that his business has not been affected by the sanctions.

«None of our clients have anything to do with the situation in Ukraine," he says. - However, we do know that some owners of large yachts are cancelling their cruises to Europe and the United States and moving their yachts from territorial waters under EU jurisdiction to Asia».

Mr. Benjamin Maltby of MatrixLloyd, a superyacht consulting company, admits that the Russian market has been a large part of his business for the last 8 years.

«It is clear that the crisis in Ukraine requires us to keep a close eye on changes in legislation and how they manifest themselves in practice," says Maltby. - Since April 15 this year, sanctions have been phased in by Ukraine, the European Union and the United States. While we know, for example, that private business jets have been delayed, but the restrictions have had little effect on superyacht customers.

Dobroserdov is concerned about the long-term effects of sanctions - Russians are closely linked to the superyacht industry, which provides tens of thousands of jobs around the world.

«The economic situation in Russia will definitely suffer from the political decisions of the authorities," says Dobroserdov. - Capital is being withdrawn from Russia and some superyacht construction projects have already stopped. As a result, we will see a decline in demand from potential customers in Russia and Ukraine over the next 3-5 years. This will have an unpleasant effect on the superyacht industry».

John Leonida, superyacht specialist and partner at London law firm Clyde & Co, explains that neither he nor any of his clients were harmed by the imposed sanctions, but the mood is definitely wary.

«People are concerned about what will happen if sanctions are imposed on any of their clients, and they need to know how to deal with it," Leonida said. - No one is spreading worrying rumors about the situation, everyone I've managed to communicate with is talking pragmatically and practically».

Moonen believes that the current geopolitical situation with Russia will lead to even greater problems in the business environment than at present.

«The 2013 financial crisis in Cyprus, a key offshore capital centre for Russians, has made everyone nervous. Then, in response to the conflict in Crimea, we see sanctions being imposed on Russian authorities, oligarchs and companies. I think the Russians have not lost any significant amounts so far, but I have the impression that the movement of funds can already be seen on indirect signs, such as the unexpected sale of yachts or the extension of large projects».

Among the superyacht market players - those who keep their hand on the pulse - the prevailing opinion is that the current crisis in Crimea and Ukraine will drag on. The yachting industry, like the rest of the world, monitors the situation, but continues to do its job as well as possible, taking into account the circumstances.

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