--:-- Sean Rameswaram: It's been one year of full-scale war in Ukraine. It's been costly and messy and bloody, but there's another front on this war. And it too has been costly, it's been messy, but not at all bloody. It's the fight to seize Russian yachts.
--:-- Sean Rameswaram: Seizing Russian superyachts is really kind of the most tangible symbol that we have for what is a much larger issue, which is that Western governments have sanctioned and frozen hundreds of billions of dollars worth of Russian assets in response to the war in Ukraine.
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--:-- Sean Rameswaram: Coming up on Today Explained, you're going to seize a bigger boat. The super yachts are really the things that have captured everyone's imagination because they're such an opulent, outrageous example of Russian wealth.
--:-- Sean Rameswaram: Support for Today Explained comes from Adio. Adio is an AI-native customer relationship management platform that Adio says is built for the next era of companies. A powerful data structure adapts to your business model, syncs in all your contacts in minutes, and enriches your business with actionable data.
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--:-- Sean Rameswaram: Adio says it also allows you to create those email sequences, those real-time reports, those powerful automations, which they claim can help you build what matters most, your company. You can go to adio.com slash todayexplained to get 15% off your first year. That's A-T-T-I-O dot com slash todayexplained.
--:-- Sean Rameswaram: AI agents are getting pretty impressive. You might not even realize you're listening to one right now. We work 24-7 to resolve customer inquiries. No hold music, no canned answers, no frustration. Visit sierra.ai to learn more.
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--:-- Sean Rameswaram: I understand it. Can I take it? Explained.
--:-- Sean Rameswaram: Stephanie Baker at Bloomberg knows this boat business back and forth. So to help us understand their importance to this one-year-old war in Ukraine, we asked her to tell us about just one. One boat in particular that the U.S. went after is called Amadea.
--:-- Stephanie Baker: It is a super yacht worth about $325 million. It's enormous, 348 feet long, six decks. It has two baby grand pianos, one of which is hand-painted, a large mosaic-tiled pool.
--:-- Sean Rameswaram: I'm sorry, all of those things sound fancy, but I still don't hear $325 million. How does a boat cost $325 million?
--:-- Stephanie Baker: Well, if you think about it, a naval destroyer is about 500 feet long. I mean, these are huge vessels. And they're decked out with incredibly luxurious finishings as well. Silk carpets, incredibly rare fabrics for furnishings. They're massive vessels that require a huge amount of steel to construct. They have very sophisticated engines and aircon systems.
--:-- Sean Rameswaram: So these are high-tech vessels that take years to build. And who was this vessel built for?
--:-- Stephanie Baker: The U.S. government alleges Amadeya is owned by a sanctioned Russian oligarch named Suleyman Karimov, who the U.S. sanctioned in 2018.
--:-- Sean Rameswaram: Now, he denies that he's the owner. Another little-known tycoon named Eduard Kudanatov came forward saying he was the actual real owner on paper.
--:-- Stephanie Baker: The U.S. government countered, saying, that's not correct. He's actually just a straw owner. He's just holding it on behalf of Karimov, who was sanctioned and was severely restricted in his movements and ability to move money around the world.
--:-- Sean Rameswaram: So, I guess irrespective of who owns this vessel, what happens to it when the war begins last year?
--:-- Stephanie Baker: Okay, so when the war began last year, Amadea was in the Caribbean. And it began a very long voyage sailing through the Panama Canal to the Pacific island of Fiji, where it was supposed to refuel and swap out crew.
--:-- Sean Rameswaram: Now, the U.S. government was tracking it and had obtained evidence that Karimov had engaged in sanctions violation. So the U.S. government decided that he had evaded sanctions, and that gave them the grounds to seize the vessel, even as far away as Fiji.
--:-- Stephanie Baker: So it sent FBI agents and the U.S. Marshals Service to Fiji to seize the vessel. At that point, the owner on paper, Mr. Kudanatov, objected and tried to stop the seizure in the courts in Fiji.
--:-- Sean Rameswaram: Now, there was a several-week-long battle in Fiji courts. The U.S. government won. The U.S. Marshals Service hired a company, which in turn hired a crew, to sail it to U.S. waters. And they took it to the port of San Diego, where it has been sitting ever since June.
--:-- Stephanie Baker: Awaiting the process that the Justice Department is trying to go through to actually sell it.
--:-- Sean Rameswaram: Today's action should make clear that there is no hiding place for the assets of individuals who violate U.S. laws. And there is no hiding place for the assets of criminals who enable the Russian regime.
--:-- Sean Rameswaram: Hmm. Why does the U.S. have jurisdiction here? Why do they get to sort of litigate this whole case?
--:-- Stephanie Baker: Right. That's the really interesting thing about U.S. sanctions. It really gets at the heart of what's happening now, which is the long arm of the U.S. Justice Department.
--:-- Sean Rameswaram: When the U.S. Treasury imposes sanctions on a Russian oligarch or anyone, for that matter, that basically bars them from using the U.S. dollar.
--:-- Stephanie Baker: Oh So anything that touches the U financial system any U dollar transactions tend to go through U correspondent banks and that gives the U government jurisdiction Because the dollar is so dominant, it's used for sort of 60% of transactions, savings, what have you, around the world.
--:-- Sean Rameswaram: That gives them this enormous reach to go after assets far and wide if they have touched the U.S. dollar. And it's really hard to own a super yacht and not transact in U.S. dollars.
--:-- Stephanie Baker: So the U.S. is basically policing use of U.S. dollars in order to support Ukraine in this war effort. Basically.
--:-- Sean Rameswaram: We will leave no stone unturned in our efforts to investigate, arrest, and prosecute those whose criminal acts enable the Russian government to continue this unjust war.
--:-- Stephanie Baker: So it seems kind of like a win-win here. The U.S. gets to collect a bunch of fancy boats and help Ukraine.
--:-- Sean Rameswaram: What's the drawback?
--:-- Stephanie Baker: Right. So the goal of doing this, as one Biden administration official told me, was to show to the Russian people that they'd been getting ripped off by the government for years. It was to disrupt the Russian elite.
--:-- Sean Rameswaram: Whether or not that message is getting through to ordinary Russians, given Putin's control of the media, is another question.
--:-- Stephanie Baker: But it turns out that seizing and freezing a superyacht is a lot more complicated than you might think. Even that has surprised administration officials.
--:-- Sean Rameswaram: But you know what the craziest thing is when we seize one? We have to pay for upkeep.
--:-- Stephanie Baker: That's right, yeah. The National Security Advisor Jake Sullivan was caught on a live mic last year expressing his own surprise.
--:-- Sean Rameswaram: So like some people are basically being paid to maintain Russian superyachts on the path of the United States government.
--:-- Stephanie Baker: That's awesome. That's unbelievable.
--:-- Sean Rameswaram: And it's complicated because it's not like, you know, seizing or freezing a bank account or a mansion. You can't just, you know, lock up a super yacht, turn off the lights and wait until the war ends.
--:-- Stephanie Baker: You know, these are vessels that sit in salt water and humidity. It's a very hostile environment. They degrade very quickly without maintenance.
--:-- Sean Rameswaram: The air conditioning needs to be on to prevent rust from appearing. They need staff on board for insurance reasons and to make sure that the yacht is safe in port.
--:-- Stephanie Baker: And the U.S. government has a duty to maintain the yacht so that it doesn't lose value. And they have an interest in doing that because their goal eventually is to sell the yacht for as much as they can get for it.
--:-- Sean Rameswaram: So that means upkeep, and that can cost an enormous amount of money. How much does that cost just for this one 300-something million dollar yacht, the Amadea?
--:-- Stephanie Baker: Do we have any idea?
--:-- Sean Rameswaram: So I spent a lot of time trying to come up with a figure that was accurate. And I talked to a lot of people, including people who were familiar with this very vessel.
--:-- Stephanie Baker: And the number I came up with was roughly 10 million a year.
--:-- Sean Rameswaram: Oh, no way. I mean, of course, it would be more expensive if you are sailing it around the world and you've got the cost of fuel, but you need to keep running the engine.
--:-- Stephanie Baker: You need to keep running the systems to make sure that it doesn't degrade in value.
--:-- Sean Rameswaram: The insurance costs alone are enormous, so it's a costly endeavor.
--:-- Stephanie Baker: It's just funny to think about the current fight over the debt ceiling in Congress. Where exactly is a financing operation for a, you know, Russian oligarch super yacht getting rubber stamped?
--:-- Sean Rameswaram: And how many of these things are getting rubber stamped? Do we have any idea?
--:-- Stephanie Baker: There was an allocation as part of a spending review last year that gave them some funding for this.
--:-- Sean Rameswaram: The U.S. government, the Justice Department, needs to go through a complicated legal process called forfeiture, which means going to a judge and proving that the assets are proceeds of a crime.
--:-- Stephanie Baker: And in this case, the crime would be sanctions evasion.
--:-- Sean Rameswaram: Now, we're not the Bolsheviks. We don't just seize assets without due process. And the most comparable analogy is seizing the assets of a drug lord.
--:-- Stephanie Baker: They go through a process called forfeiture to get the mansion of a drug lord and sell that. And those funds go into an account.
--:-- Sean Rameswaram: Now, Congress has just passed legislation enabling the Justice Department to divert those funds to go to help Ukraine.
--:-- Stephanie Baker: Previously, those funds would just go into a Justice Department account that would be used for other types of maintaining other forfeited assets.
--:-- Sean Rameswaram: And in the cases in the U.S. where they've gone after Russian-linked superyachts, they've only gone after the yachts where they could prove that a crime had been committed and sanctions had been violated.
--:-- Stephanie Baker: And that means going after Russian oligarchs who were sanctioned four years ago because they were able to build up a body of evidence that showed that they were using the U.S. dollar system in violation of U.S. sanctions.
--:-- Sean Rameswaram: So where does this end exactly? I mean, do we for sure know that these boats will be able to be sold to benefit Ukraine?
--:-- Stephanie Baker: And do we for sure know that the United States government will continue to shell out tens of millions of dollars to maintain them until that point?
--:-- Stephanie Baker: I think in the case of the U.S., the super yachts that they've gone after and seized, they have a pretty solid case with a body of evidence that should be able to back up any forfeiture claim that they pursue.
--:-- Sean Rameswaram: I think in the case of Western European governments, it's going to be much more difficult.
--:-- Stephanie Baker: Italy, for instance, has frozen a handful of super yachts, including one link to Putin. It is paying the costs of maintaining them.
--:-- Sean Rameswaram: And, you know, they told me that the way this ends is that one day sanctions get lifted. And if the oligarchs want their boats back, they have to pay back those maintenance costs.
--:-- Stephanie Baker: Now, that seems like a pretty unlikely scenario.
--:-- Sean Rameswaram: So, you know, it looks in the current situation and the current environment that sanctions are going to be on in place for many, many years.
--:-- Stephanie Baker: So a lot of these boats are in legal limbo.
--:-- Sean Rameswaram: Stephanie Baker, reporting on seizing Russian yachts at Bloomberg.
--:-- Sean Rameswaram: But it's not just the Russians. The rest of the boats are on the horizon at Today Explained.
--:-- [Music continues in the background]
--:-- Sean Rameswaram: Support for Today Explained comes from Built Rewards. These days, it seems like everybody has a rewards program. You swipe your card and you get one cent on the hundred dollars. But with your rent, frequently, you just pay month after month. You never get anything from it other than that roof over your head.
--:-- Stephanie Baker: Not anymore, says Built Rewards. Built Rewards says it lets you earn points on your rent. By paying rent through Built, they say you can earn flexible points that can be redeemed toward hundreds of hotels and airlines, perhaps a future rent payment, your next Lyft ride, and so much more.
--:-- Sean Rameswaram: Your home isn't just where you sleep. It's your community. And Built wants you to go out and do things in the community.
--:-- Stephanie Baker: You can eat at your favorite local restaurants, then earn more points. You can get VIP treatment at certain fitness studios. You can enjoy exclusive experiences just for Built members every month.
--:-- Sean Rameswaram: When you're ready to travel, they say Built points can be converted to miles or hotel points all around the world.
--:-- Stephanie Baker: You can earn points on rent and around your neighborhood wherever you call home by joining Built.com slash Explained.
--:-- Sean Rameswaram: That's J-O-I-N-B-I-L-T dot com slash Explained.
--:-- Sean Rameswaram: Not all journalism is the same. Take The Guardian. Our coverage has something unique, fierce independence. Nobody owns us or tells us what we can and can't say.
--:-- Stephanie Baker: So we're free to report the whole picture. We connect what's happening in Washington to the rest of the globe, expose corruption wherever we find it, and give fresh perspective on everything from wellness and soccer to culture, the climate, and more.
--:-- Sean Rameswaram: Read, watch, and listen to The Guardian for free at theguardian.com.
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--:-- Sean Rameswaram: Listen, make yourself feel at home. You need anything? Champagne, caviar? My yacht is your yacht.
--:-- Stephanie Baker: This is your yacht? That's right. I'm the owner. The captain. El Capitan.
--:-- Sean Rameswaram: Evan Osno, staff writer at The New Yorker. We've been talking about how Russian oligarchs love their super yachts. But according to reporting you did last year, it's not just the Russians, right?
--:-- Evan Osno: No, not at all. It's sort of everybody in a certain income bracket. They've become, in effect, the final frontier of wealth.
--:-- Sean Rameswaram: I think they're the thing that if you get rich enough these days, eventually you begin to be tempted by a yacht.
--:-- Evan Osno: And they've sort of gone across all of these different communities. And as they have become more popular, they've also just become bigger.
--:-- Sean Rameswaram: I mean, I think there's an inevitable arms race that sets in among neighbors of a certain kind, sociologically speaking, if not geographically, that once your peer or your competitor gets a boat of a certain size, then you feel a sudden overwhelming urge to get a bigger boat.
--:-- Evan Osno: We're going to need a bigger boat.
--:-- Sean Rameswaram: I think maybe for a lot of people who can still recall the early days of COVID, they might remember this tweet or Instagram that David Geffen, the billionaire, posted being like, you know, everyone stay safe. I'm out here on my boat.
--:-- Evan Osno: And he just got roasted.
--:-- Sean Rameswaram: Is this sort of ultra rich competition that's going on something that happened because of COVID? People wanted to retreat to boats or does this predate COVID?
--:-- Evan Osno: There was a COVID effect in the sense that all of a sudden, one of the places you could go if you had the means to do it was your boat.
--:-- Sean Rameswaram: And then you could take your boat out into the Caribbean or the Mediterranean and you'd be safe.
--:-- Evan Osno: And I think there was this sudden surge in the market and you saw it actually reflected in the sales data that all of a sudden there were waiting lists to get superyachts made.
--:-- Sean Rameswaram: These are waiting lists for people who are not accustomed to being on waiting lists.
--:-- Evan Osno: And so there was also this tendency to want to pay extra in order to get it sooner.
--:-- Sean Rameswaram: I think there was a kind of merger of the consumer instinct and then also something that was slightly more abstract, a kind of sudden awareness of mortality.
--:-- Evan Osno: I mean, some yacht owners described to me this feeling that the COVID pandemic, as it did for a lot of other folks, too, made people say, well, I guess my time is short.
--:-- Sean Rameswaram: And if you're somebody who is waiting to buy a super yacht, that means you're willing to throw in an extra $15 million to get his boat sooner.
--:-- Evan Osno: As he said, if that'll save me three years of waiting, I think a year of my life is worth about $5 million, so I'll pay it.
--:-- Sean Rameswaram: At a certain point, you encounter what a Silicon Valley CEO described to me as more or less the limits of what you can spend.
--:-- Evan Osno: He said that if you're buying a house on land, he said you're not going to spend $250 million on a house because it looks weird.
--:-- Sean Rameswaram: It sends awful messages to the public and to your staff, your employees.
--:-- Evan Osno: And he said, but actually, a boat, you can more or less buy a boat for $250 million, and the public generally doesn't know anything about that.
--:-- Sean Rameswaram: This is the Azam. The 500 million euro, 180 meter long boat is probably the largest privately owned yacht and belongs to the emir of Abu Dhabi.
--:-- Evan Osno: Few play in the mega yacht owner league.
--:-- Sean Rameswaram: He described it actually as the best way to, in his words, absorb excess capital.
--:-- Sean Rameswaram: There was a time when it was mostly oil money from Saudi Arabia and the Gulf.
--:-- Evan Osno: And then there was this big surge of interest in the 90s after the collapse of the Soviet Union from Russian and Eastern European oligarchs.
--:-- Sean Rameswaram: Because there was all of a sudden all of this money flooding through their economy and they began to compete for visible demonstrations of their own fortunes.
--:-- Evan Osno: And then, of course, we had the rise of Silicon Valley, and that became one of the domains in which people in Silicon Valley, partly because it was an intersection of luxury and engineering, there was this real obsession with building the fastest or the most luxurious yachts.
--:-- Sean Rameswaram: At the moment I mean it probably not a huge surprise but Jeff Bezos founder of Amazon is in the position of building he believed to have probably the world biggest sailboat
--:-- Evan Osno: So the boat being built for Bezos is a 127 metre or 416 foot sailing yacht
--:-- Sean Rameswaram: It was a controversy because he was building it in the Netherlands and it was going to have to be brought out through Rotterdam and in order to get it through they were going to have to dismantle a bridge that had survived Nazi bombing.
--:-- Evan Osno: Rotterdam Council said it would never be dismantled again.
--:-- Sean Rameswaram: But now they've told the people there's no other way for the multi-billionaire superyacht to make it from this shipbuilder's yard in Alblasserdam to the open seas.
--:-- Evan Osno: And people in Rotterdam were sort of incensed by this.
--:-- Sean Rameswaram: The more monies you have, the more power you get, even though it goes against principles of the city.
--:-- Evan Osno: And eventually they found a way of getting his boat through with the masts down.
--:-- Sean Rameswaram: And so it sort of diffused the crisis.
--:-- Evan Osno: But for a moment, it was this fairly acute demonstration of the collision of these different values.
--:-- Sean Rameswaram: And is that how you have the most impressive boat? Is it just bigger and bigger or is it also what's on board?
--:-- Evan Osno: Well, part of it are the somewhat esoteric distinctions that, of course, mean very little to the general public but mean a tremendous amount to the people who are spending their money on these things.
--:-- Sean Rameswaram: So, for instance, a Dutch boat is considered more prestigious than an Italian boat.
--:-- Evan Osno: It will hold its value over time. If you want to have a fully custom yacht, that's considered better than a quote-unquote series yacht, which I guess we would think of as a kind of off-the-shelf yacht.
--:-- Sean Rameswaram: And if you really want to make fun of somebody or disparage their yacht, well, then you just say it looks like a wedding cake.
--:-- Evan Osno: That's really dogging on somebody.
--:-- Sean Rameswaram: You know, in the end, though, I think the truth is, Sean, that even though you can put on a lot of these other accessories, people come up with all kinds of ways of spending on helicopter pads or even a second boat to follow your main boat, which you carry all the accessories on.
--:-- Evan Osno: But actually, in the end, it comes down to what's known in the industry as LOA, which stands for length overall.
--:-- Sean Rameswaram: That's the coin of the realm. So it's literally a bunch of rich guys measuring how long their boats are.
--:-- Evan Osno: That's one way to put it.
--:-- Sean Rameswaram: Actually, one owner said to me, there is an element, let's be honest here, of phallic sizing.
--:-- Evan Osno: I think, though, there's another element of this, which is that the length of the boat becomes this critical factor in the overall luxury of the thing for a very specific reason.
--:-- Sean Rameswaram: And it's a fact of history, which is that pleasure boats of this kind are allowed by law to carry no more than 12 passengers.
--:-- Evan Osno: This is a rule that was set by the International Convention for the Safety of Life at Sea.
--:-- Sean Rameswaram: This was something that was imposed after the sinking of the Titanic, actually.
--:-- Evan Osno: And those limits on the number of passengers, the number of people who can stay overnight, doesn't apply to crew.
--:-- Sean Rameswaram: And so you can have, as one yacht broker put it to me, he said you can have anywhere between 12 and 50 crew members looking after those 12 guests.
--:-- Evan Osno: And the result of that is this ratio of attention, of luxury, of service that is kind of beyond anything you would ever find beyond the 19th century.
--:-- Sean Rameswaram: But it happens every day out on these yachts.
--:-- Evan Osno: Has the West's attempts to confiscate the super yachts of Russian oligarchs chilled the market at all?
--:-- Sean Rameswaram: No, it hasn't really. I mean, there is some concern among yacht makers and buyers that the visibility and the attention on them is going to be uncomfortable.
--:-- Evan Osno: I mean, as one of them said not too long ago to a film crew, he said if the world knew what it's like actually on some of these super yachts, they would revive the guillotine.
--:-- Sean Rameswaram: I think that there is now, as a result of the war in Ukraine and because of the greater public attention around these yachts, you're beginning to see more of these yachts spending more time at sea and less time in view.
--:-- Evan Osno: So it's actually getting a little harder to find them sometimes.
--:-- Sean Rameswaram: But it sounds like even if we can't see them, we should at least know that they're out there.
--:-- Evan Osno: They are out there. They're always out there. And they're kind of prowling around.
--:-- Sean Rameswaram: One of the things that happened actually after the invasion of Ukraine was that some of the sanctioned Russian oligarchs, in order to avoid having their yachts seized, they just flipped off the transponder system, the thing that makes these boats visible on the high seas, and just sent them out, kind of wandering the oceans, these kind of strange ghost ships.
--:-- Evan Osno: Is that allowed? Are you allowed to just flip off your transponder?
--:-- Sean Rameswaram: No, the rules are that you're supposed to always have that thing on.
--:-- Evan Osno: But, you know, I guess what happens on the high seas sort of stays on the high seas. It's a bit of a lawless terrain out there.
--:-- Sean Rameswaram: Evan Osnos, his piece on the yachts, the super yachts, the giga yachts, is titled The Habs and the Have Yachts. Find it at newyorker.com.
--:-- Sean Rameswaram: Our program was produced by Miles Bryan. He got some pointers from Jonathan Geyer at Vox.
--:-- Sean Rameswaram: We were edited by Matthew Collette, fact-checked by Laura Bullard, and mixed by Patrick Boyd, with help from Paul Robert Mounsey.
--:-- Sean Rameswaram: I'm Sean Rameswaram. This is Today Explained.
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--:-- Sean Rameswaram: The New iPhone 17 Pro ultimate any condition guaranteed best 5g source route metrics data united states 1h 2025 all rights reserved trade and an additional term supply for all offers see verizon.com for details.
