Hong Kong Declines to Enforce U.S. Sanctions on Russian Megayacht

Hong Kong Refuses to Enforce U.S. Sanctions on Russian Megayacht

Despite warnings from the US Department of State, Hong Kong political leadership has rejected a request to impose US sanctions on the Russian megayacht Nord.

A 466-foot, 10,000 GT, $500 million megayacht named The Nord was recently delivered in Germany. She is the biggest yacht that her maker has ever sold. She includes 20 guest cabins, two helicopter landing pads, a retractable hangar, and other amenities typical of a ship of her size, including a beauty salon, elevator, stern fold-down "beach club," and a theater.

The proprietor of the Severstal mining and metals giant in Russia, Alexei Mordashov, a sanctioned steel billionaire, is the owner of Nord. According to Forbes, his family's wealth totals close to $30 billion, making him the richest person in Russia.

Mordashov owns stock in Rossiya Bank, which the EU refers to as the "personal bank" of Russian officials who benefited financially from their country's 2014 invasion of Crimea. Due to this concern and his alleged connections to the Kremlin, he was included to the first EU sanctions list in late February. Additionally, the US, UK, Australia, and New Zealand have all imposed sanctions on him.

Since the beginning of the invasion, the Nord has been more active than the majority of authorized Russian vessels. She left her cruising grounds in Seychelles in mid-March and crossed the Singapore Strait before arriving in the port of Vladivostok in the Russian Far East in April. This month, she traveled south from Vladivostok to Hong Kong, taking a chance that she would experience a seizure if she had to make an emergency port stop.

As soon as the U.S. Treasury became aware of Nord's warship-sized presence in Hong Kong's harbor, it called the territory's Chinese-run administration to demand its seizure. John Lee Ka-chiu, the CEO of Hong Kong and a person on the U.S. Treasury's blacklist, stated unequivocally that Hong Kong would only execute sanctions imposed by the United Nations and not by the United States on its own.

“We cannot do anything that has no legal basis,” Lee told the AP. In response, the U.S. State Department questioned Hong Kong's reputation. The openness of the business climate is further called into question by the potential for individuals to use Hong Kong as a safe haven to evade sanctions from several jurisdictions, a State Department official said in a statement on Monday.

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