Cyprus steps up pursuit of Abramovich’s €14m unpaid taxes

Cypriot authorities will revive the company at the heart of Roman Abramovich’s sham cruise-rental scheme in order to try and reclaim €14m in unpaid tax on the oligarch’s fleet of superyachts.

A court order issued on Monday directed that Blue Ocean Yacht Management, which was wound up last year despite owing millions in VAT, should be re-registered and its officers reinstated to their positions.

The move comes after officials said last month that it would be impossible to reclaim the tax, prompting criticism in parliament.

The tax owed in Cyprus was revealed in January by the Bureau of Investigative Journalism (TBIJ), in partnership with the BBC, the Guardian, OCCRP, and CIReN.

A separate investigation from the Cyprus Confidential project also revealed that Abramovich may owe as much as £1bn in UK tax from another scheme involving a network of hedge fund investments.

Joe Powell, Labour MP for Kensington and Bayswater, told TBIJ: “These important investigations have unearthed evidence that the authorities in Cyprus have deemed sufficient to warrant a court order.

“The question now is why our own tax authorities have seemingly not made such advances in reclaiming any of the eye-watering sums that may be owed to the exchequer here.”

In revealing the yacht-rental scam, TBIJ used leaked documents to show an elaborate arrangement in which one set of companies owned by Abramovich had leased out his superyachts to another set of companies, also all ultimately owned by Abramovich. This allowed him to claim VAT exemptions intended for maritime businesses, and avoid levies on fuel, maintenance, provisions and other costs.

Blue Ocean Yacht Management, a Cyprus-registered company ultimately owned by Abramovich, was central to the scheme and first came to the attention of tax authorities in 2012, when the VAT investigation began.

After a decade-long legal battle, the supreme court ruled in March 2024 that Blue Ocean owed €14m in VAT. But by that time, the company had no legal representatives and was wound up without having settled the debt.

At a parliamentary committee session last month, Cyprus tax commissioner Sotiris Markides said procedural barriers meant it had not been possible to hold the company and its directors to account.

In January, former Conservative leader Iain Duncan Smith asked in UK parliament what steps are being taken to ensure any funds owed by Abramovich to HMRC are pursued.

In response, Treasury minister James Murray MP said the government does not comment on individual cases but will be stepping up its efforts on tax enforcement.

In response to TBIJ’s original investigation, Abramovich said he obtained independent professional tax and legal advice and acted in accordance with it. He denied knowledge of any alleged deception to evade taxes and said he was not liable for any scheme.