Political motives or legal grounds?
A former Rosneft CEO is contesting the legality of Amadea’s seizure in a New York Court, claiming that he is its true owner…
Image Credit: The US Department of Justice
Eduard Khudainatov, a Russian businessman and former CEO of a state-owned oil conglomerate Rosneft, has contested the US government’s decision to seize the 106m Amadea. The Department of Justice seized the vessel in 2022, citing ownership to be held by a sanctioned Russian oligarch.
Despite the yacht, thought to be valued at around $300 million, being registered in his name, Khudainatov disputes the allegations that he served as a stand-in owner for a sanctioned Russian oligarch Suleiman Kerimov. Notably, Khudainatov himself is not sanctioned by the US but is, however, sanctioned by the EU.
In the recent memorandum presented to the US District Court for the Southern District of New York, Khudainatov asserted that the Amadea unequivocally belongs to him, refuting any claims of ownership by Kerimov.
The complaint argues that even if the US government’s assertions are accurate, the yacht’s seizure should be overturned, contending it does not constitute the proceeds of or is derived from proceeds related to sanctions evasion or money laundering.
Khudainatov became entangled in the civil forfeiture complaint filed by the US government in October last year, which alleges Kerimov used shell companies and Khudainatov’s name to prevent the yacht’s confiscation after being sanctioned in 2018 over Russia’s annexation of Crimea. This was well prior to the widely reported incident that saw Fijian authorities seize Amadea in May 2022 at the request of US officials. It has been held in San Diego, California ever since.
US authorities have previously alleged that Khudainatov is also the proxy owner of the 140m Scheherazade, which is believed to be owned by President Vladimir Putin. According to the Department of Justice, the Russian national played the role of a “clean, unsanctioned straw owner”, ostensibly owning the ships on paper and concealing the true owners – Putin and Kerimov – from authorities who might sanction the vessels. He has also been linked to Crescent, which is currently under arrest in Spain.
Attorneys for Khudainatov criticised the US government's pursuit of Amadea as a politically motivated stunt. They added that the move is devoid of factual support and stretching the boundaries of forfeiture, sanctions and money laundering laws.
Khudainatov’s argument challenges the allegation that the yacht is linked to a money laundering scheme as the government has yet to identify any underlying crime. It contends that the charges conflate money laundering with alleged sanctions violations. The other claim is that Kerimov purchased Amadea; however, the US authorities have provided no evidence linking payments to Kerimov or his agents.
The US remains steadfast that payments were made to a company servicing the yacht, allegedly coming from Kerimov through the US financial system. However, Khudainatov countered that the funds were not alleged to come from any sanctions violation and were untraceable to one.
Ultimately, the memorandum disclosed that the government plans to amend its complaint, a move contested by Khudainatov’s defence team, who argue that the current version lacks a valid claim for forfeiture.
Additionally, the US government has threatened to pursue the allegations of Khudainatov’s role as a “straw owner” for Vladimir Putin and fellow oligarch Igor Sechin for Crescent and Scheherazade if he persists in asserting ownership over Amadea.
Although this case may encounter significant obstacles for both the US and Khudainatov, it could result in a broader impact on changing current sanctions policies and usual methods of seizing assets.
The Department of Justice and Khudainatov’s defence team have not immediately responded for comments.
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