A court case has started in Cyprus against the company that managed Abramovich’s superyachts

A court case has started in Cyprus against the company that managed Abramovich’s superyachts

A superyacht management company once beneficially owned by the sanctioned Russian billionaire Roman Abramovich faced criminal tax charges at a court in Cyprus today. Three former directors of the company are also charged with tax offenses. 

The Cyprus-registered company “BOYM - Blue Ocean Management Limited” is accused of failing to pay more than 26 million euros in taxes and accrued interest. A company that helped administer Blue Ocean is also facing charges. Neither firm sent legal representatives to the first hearing in the case, held at the Limassol District Court. 

The lawyer representing two former directors — Maria Damianou and Ioanna Ilia — did not comment in court on the substance of the charges, but requested evidence for examination. A third former Blue Ocean director was not served an indictment, as his whereabouts are unknown.

Blue Ocean was established in the 2000s, and in its heyday managed a $1.2-billion fleet of superyachts enjoyed by Abramovich, who was sanctioned in 2022 by the European Union following Russia’s full-scale conflict of Ukraine. 

Blue Ocean’s fortunes declined around 2013, after tax officials handed it a 14 million-euro bill for unpaid VAT. The firm contested the bill for more than a decade — as interest and additional tax added another 12 million euros — but last year Cyprus’ Supreme Court dismissed its final appeal.

The company was dissolved a few months later, but was reinstated by court order in June this year after an application by Cyprus’ tax commissioner.  

That application followed revelations by OCCRP, The Bureau of Investigative Journalism and the BBC earlier this year that between 2005 and 2010 Blue Ocean set up a fake superyacht-leasing business in an apparent attempt to evade tax, according to leaked files and correspondence.

Meritservus Secretaries Limited, a Cyprus-based firm that helped administer companies for Abramovich’s benefit, is also facing charges. The director of Meritservus Secretaries Limited declined to comment when contacted by phone, and Blue Ocean did not respond to questions sent by mail.

Maria Damianou, a former Blue Ocean director, told CIReN, OCCRP’s Cypriot member center, that she was “a mere employee of Meritservus.” She said she had “always acted on the instructions of Meritservus,” and had never received any information about the tax debt.

“I consider the charges against me to be unfair and unfounded,” she said.

Reporters were unable to reach Ilia. Another former Blue Ocean director facing charges, British national Neil Wade, could not be reached for comment. He was not served an indictment, as Cypriot authorities were unable to locate him.

During the 2000s, superyachts used by Abramovich spent part of the year in the EU, where VAT was due on fuel, staff, port fees and other expenses. These costs were exempt from the EU tax for vessels used for commercial purposes. 

To claim the exemption, people ultimately working for Abramovich devised a complex scheme in which his superyachts were leased to what looked like independent customers paying to go on a cruise for a week or two, OCCRP’s investigation found. 

In reality, the customers leasing the vessels were companies owned by Abramovich’s offshore trust.

Lawyers for Abramovich did not respond to a request for comment. They previously denied “any allegation that [Abramovich] had or ought to have any knowledge of, is personally responsible for and/or is personally liable for any alleged deception of any government authority in order to evade payment of taxes which were lawfully due or for any other purpose.” Abramovich is not charged in the Cyprus case. 

Cypriot officials first began investigating Blue Ocean after joining a multilateral EU tax audit, started in 2008 by France and the Netherlands, aimed at tackling tax avoidance and tax evasion in the luxury yacht sector, according to a letter from Cyprus’ Ministry of Finance to a parliamentary committee in August this year.

The letter, obtained by CIReN, shows how Cyprus tax officials reviewing Blue Ocean at the time of the audit concluded that Abramovich had chartered yachts from the company under a customer relationship.

However, Blue Ocean was ultimately owned by a trust that benefited Abramovich, OCCRP’s investigation revealed.