Hong Kong declines to enforce US sanctions on luxury yacht

Hong Kong has been warned by the US that its future as a financial hub could be under threat if it continued to decline to enforce US sanctions against certain Russian individuals.

Luxury yacht Nord (IMO 9853785) had been allowed to berth in Hong Kong on October 11th, despite being linked to sanctioned Russian individual Alexey Mordashov. It had arrived after a week-long voyage from Vladivostok in far eastern Russia. Mordashov was sanctioned by the EU, the UK and the US following Russia’s invasion of Ukraine on February 24th this year.

The 10,000 gt Nord was delivered from a German shipyard only last year and has been valued at $500m. Mordashov is the owner of Russian mining and metals company Severstal and his family’s net worth has been estimated at approaching $30bn, making him the wealthiest man in Russia.

While most Russian yachts linked to sanctioned Russians have been lying low since February, the Nord has been relatively active. It left the Seychelles in mid-March and transited the Singapore Strait, ending up in Vladivostok, until it sailed south for Hong Kong earlier this month.

Given its size, Nord was not likely to enter Hong Kong harbour unnoticed. The US Treasury promptly contacted the government of Hong Kong to request its seizure. Hong Kong CEO John Lee Ka-chiu replied that Hong Kong would only enforce UN sanctions – not those imposed unilaterally by the US.

“We cannot do anything that has no legal basis,” Lee, who is Chiu blacklisted by the US Treasury himself, stated.

A spokesperson for the US State Department responded by questioning Hong Kong’s reputation. “The possible use of Hong Kong as a haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment”, the spokesperson said on Monday October 10th.

2021-built, Russia-flagged, 10,154 gt Nord is owned by Yurkon LLC care of manager Nord Wind LLC of Moscow, Russia. As of October 13th it was moored at Hong Kong.