Seized Alfa Nero Is Costing Taxpayers $28,000 a Week Just to Keep Mold Out of the Cabins

Granted, no one said it would be easy. Then again, no one said it would be nearly impossible, either. The story of Alfa Nero, a multi-awarded Oceanco build, is perhaps the best example of the kind of legal limbo – and financial hell – a seized superyacht brings. Ironically, not to the direct beneficiary, but to the taxpayer in whatever country does the seizing.

When Alfa Nero sailed into Antigua and Barbuda in early 2022, it carried a crew of 37, stocked cellars, full tanks, and the prospect of who-knows-how-many more voyages across the seven seas in the same manner as before. Today, it's empty of both provisions and personnel, bobbing away in a closed section of the marina – and costing the local taxpayer a small fortune with each new week it spends there.

The reality of sanctions

At the core of it, the idea of financial sanctions was a logical, well-intended one. Countries that would not – or could not – take direct sides in the war would use sanctions to put pressure on President Putin and hopefully discourage him from pursuing the war. Cut off the money flow, and he wouldn't be able to carry out the military campaign in Ukraine. Seize assets of his associates, sell them off, and then send the money over to the people of the besieged country.

On paper, it looks easy and would perhaps be even easier done. In reality, being included on a sanctions list isn't a crime in itself, so while it's enough to warrant freezing an asset, it's not enough for seizing it. In order for the asset to pass on to a state, the state has to prove ownership and then that the owner committed a crime that may have resulted in an ill-begotten gain – the asset itself.

Only after this can a state sell another person's property against their will and dispose of the funds in whichever way it sees fit. Until it does, the state is responsible for maintaining the asset in the exact condition it was in when it was frozen.

While Russian oligarchs can very well afford to pay for their own super- and megayachts, oftentimes without having to resort to chartering them in the off-season, some local governments can do without the added burden.

Italy, the country with the highest number of arrests of luxury assets recorded last year, ended up spending at least €13.7 million ($14.5 million) for the maintenance of these. And the WSJ notes that the actual figure is much higher.

Antigua and Barbuda only captured one vessel, but it's turned into a nightmare. Alfa Nero, believed to be owned by Russian oligarch Andrey Guryev, comes with a price tag of $120 million, so, by the golden 10% rule of yachting, maintenance is at least $12 million a year. The small country counts with a little over 90,000 residents, many of whom are struggling financially. They've now been saddled with a $28,000-a-week bill paying for a billionaire's superyacht.

As per the same publication, the Alfa Nero bobbing away in the marina swallows up at least $28,000 each week, including the Italian captain's salary and about $2,000 a day to keep the air conditioning running throughout the entire vessel, lest it be run over by mold. Without AC, mold would set in in under 48 hours, ruining the Miro painting and other valuable artworks, the hardwood floors, and the plush upholstery.

A skeleton crew of six is now onboard, including the captain, working the entire day to keep the vessel in impeccable shape for the day when it can sail away. The others left after months of waiting for their salaries and have since sued the local government for the delay. Those who stayed behind ate the lobster and the caviar in the pantries and traded the wine bottles in the cellars for food when their own provisions ran out.

The captain compares life on the stranded superyacht to living in a monastery: you work but don't have much else to do, and more importantly, you can never leave.

The failed auction

Perhaps more striking is the fact that the local government was actually successful in auctioning off the vessel last summer. After Alfa Nero spewed sewage into the marina and became a hazard due to the incoming hurricane season, Antigua and Barbuda rushed new legislation that allowed it to sell it.

Alfa Nero was valued at $81 million and sold off to ex-Google chief executive Eric Schmidt for $67.7 million, but he was never able to take delivery of it. Just as the winner was announced, Guryev's daughter filed papers claiming ownership and arguing that the seizure was illegal.

Schmidt backed away from the deal when he realized that he'd be taking possession of a vessel riddled with debt and still with an uncertain legal status, and was followed soon by the second highest bidder. Right now, the state is being sued by that second bidder, as well as by Guryev's unsanctioned daughter. During this time, it's also obligated to keep paying for a superyacht it does not own and might not even get to keep.

Sanctions against Russian oligarchs were met with very warm praise and much enthusiasm. Their application is showing that the old Biggie hit Mo Money Mo Problems was... right on the money.