Cyprus Court Reinstates Abramovich-Linked Firm in VAT Probe

A Cypriot court this week ordered that a defunct company owned by sanctioned Russian billionaire Roman Abramovich’s offshore trust be reinstated so it can pay the 14 million euros in VAT it failed to pay before it was closed..

BOYM - Blue Ocean Yacht Management Limited, which operated for more than two decades before its dissolution last July, was ultimately owned by a Cyprus trust that benefited Abramovich. For more than a decade before it folded, Blue Ocean contested in court a 2012 order by Cyprus’ tax authority compelling the firm to pay the multimillion-euro tax bill. 

Details of the unpaid VAT had remained private, but an OCCRP investigation published earlier this year revealed how Blue Ocean between 2005 and 2010 set up a fake superyacht-leasing business in an apparent effort to evade tax. 

The company was established in 2002 to manage several of Abramovich’s superyachts, which spent part of the year in the European Union, 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 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. In reality, the companies hiring the luxury vessels were owned by Abramovich’s offshore trust, OCCRP’s investigation found. 

Monday’s ruling by a Limassol District Court judge, obtained by CIReN, OCCRP’s Cypriot media partner, followed an application by Cyprus’ tax commissioner, Sotiris Markides, to restore Blue Ocean. It ordered that “the company and all associated persons are reinstated to the same position as if the company had never been struck off.”

Markides had previously told Cypriot lawmakers at a parliamentary audit committee meeting last month that the tax debt was unrecoverable due to the firm’s dissolved status and lack of legal representatives. But parliamentarians requested that tax officials pursue recovery of the Blue Ocean debt, he said, prompting his application to the court earlier this month.

In an interview with CIReN this week, Markides said that his office is considering bringing criminal proceedings under Cyprus’ Value Added Tax Law (2000) against several of the company’s former directors from 2005 to 2012, whom he did not name. “We will be able to act soon after the company is re-registered,” he told reporters. 

Company records indicated that Blue Ocean remained dissolved at the time of publication. 

Lawmakers criticized tax officials at last month’s parliamentary meeting for failing to collect the 14 million euros in unpaid tax after a 12-year legal battle. 

In 2018, Cyprus’ Administrative Court dismissed an application by Blue Ocean contesting tax officials’ 2012 VAT bill, ruling that the company’s claim that it did not need to pay tax was “unfounded.” Blue Ocean appealed that decision to the country’s Supreme Court, which dismissed the firm’s application in March 2024 after its attorney said she had “lost contact” with Blue Ocean and sought permission to withdraw the case. The company was dissolved four months later.

Lawyers for Abramovich 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.”