Cypriot tax authorities have faced scrutiny from lawmakers for failing to collect around 14 million euros (about $15.2 million) in unpaid taxes from Blue Ocean Yacht Management, the now-dissolved company at the center of an alleged tax-dodging scheme involving billionaire Roman Abramovich’s fleet of luxury superyachts.
Sotiris Markides, the country’s tax commissioner, told the parliament that it was not possible to recover the money, as the company no longer had directors or legal representatives, according to The Bureau of Investigative Journalism, which uncovered the scheme with the BBC, the Guardian, Cyprus-based CIReN, and other international media partners.
“The law is clear. I may not agree with it, but we couldn’t take enforcement action until court proceedings were over,” Markides said during a parliamentary hearing on May 29, according to CIReN.
In January, the media outlets reported that Blue Ocean, which Abramovich ultimately controlled, leased his fleet of superyachts worth roughly $1.2 billion to what appeared to be independent customers. But, the reporting showed, the companies chartering the superyachts were also controlled by the oligarch and registered in the British Virgin Islands.
Because the charter operation appeared to be commercial, between 2005 and 2010, the fleet was exempted from value-added tax levied on fuel, maintenance and other costs where the vessels sailed and docked in Europe, TBIJ reported.
The reporting was based on leaked documents that were part of the cache of files behind the 2023 Cyprus Confidential investigation, led by ICIJ and Paper Trail Media. At the time, Abramovich’s lawyers declined to answer detailed questions sent by ICIJ and its media partners but said he “always obtained independent expert professional tax and legal advice” and “acted in accordance with that advice.”
In March 2024, the Cypriot Supreme Court ruled that Blue Ocean was liable to pay the outstanding multimillion-dollar VAT bill but by then the company had effectively ceased its activities and was removed from the corporate registry in July 2024, according to CIReN.
At the parliamentary hearing last month, Cypriot lawmakers pressed tax officials on whether Abramovich’s business activities in Cyprus had been properly scrutinized, CIReN reported. Abramovich has been sanctioned by the European Union and the United Kingdom since 2022 due to his close relationship with Russian President Vladimir Putin.
The Cyprus Financial Intelligence Unit and Registrar of Companies told the members of parliament that Abramovich’s connection with Blue Ocean was never formally investigated, according to CIReN. Company Registrar Irini Mylona said that Neptune Trust, the Cyprus entity through which Abramovich held Blue Ocean, did not have a person listed as its director as required by Cypriot law.
Markides called for sweeping legislative reform during the hearing, CIReN reported, noting that one past Blue Ocean director had been tied to 540 other companies.
“We need changes to prevent companies from hiding behind legal gaps and faceless structures,” he said.
As part of the same investigation earlier this year, TBIJ, the Guardian and the BBC found some of Abramovich’s companies could owe up to $1.24 billion to the U.K. tax authority for failing to pay tax on profits from offshore investments worth $6 billion.
