3min chapter

Today, Explained cover image

The shadow war on Russian yachts

Today, Explained

CHAPTER

US Sanctions on Russian Oligarchs

Amadea was in the Caribbean and it began a very long voyage sailing through the Panama Canal to the Pacific island of Fiji. The US government decided that he had evaded sanctions and that gave them the grounds to seize the vessel, even as far away as Fiji. At that point, the owner on paper, Mr. Kudanatov, objected and tried to stop the seizure in the courts in Fiji. Now there's a several week long battle in Fiji courts where the US government won. It has been sitting ever since June at the Port of San Diego awaiting the process that the Justice Department is trying to go through to actually sell it.

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Speaker 1
So when the war began last year, Amadea was in the Caribbean and it began a very long voyage sailing through the Panama Canal to the Pacific island of Fiji where it was supposed to refuel and swap out crew. Now the US government was tracking it and had obtained evidence that Karimov had engaged in sanctions violation. So the US government decided that he had evaded sanctions and that gave them the grounds to seize the vessel, even as far away as Fiji. So it sent FBI agents and the US Marshal Service to Fiji to seize the vessel. At that point, the owner on paper, Mr. Kudanatov, objected and tried to stop the seizure in the courts in Fiji. Now there's a several week long battle in Fiji courts. The US government won. The US Marshal Service hired a company which in turn hired a crew to sail it to US waters and they took it to the Port of San Diego where it has been sitting ever since June, awaiting the process that the Justice Department is trying to go through to actually sell it.
Speaker 3
Today's action should make clear that there is no hiding place for the assets of individuals who violate US laws. And there is no hiding place for the assets of criminals who
Speaker 5
enable the Russian regime.
Speaker 1
Why does the US have jurisdiction here? Why do they get to sort of litigate this whole case? Right, that's the really interesting thing about US sanctions. It really gets at the heart of what's happening now, which is the long arm of the US Justice Department. When the US Treasury imposes sanctions on a Russian oligarch or anyone for that matter, that basically bars them from using the US dollar. So anything that touches the US financial system, any US dollar transactions tend to go through US correspondent banks and that gives the US government jurisdiction. Because the dollar is so dominant, it's used for sort of 60% of transactions, savings, what have you around the world. That gives them this enormous reach to go after assets far and wide if they have touched the US dollar. And it's really hard to own a super yacht and not transact in US dollars. So the US is basically policing use of US dollars in order to support Ukraine in this war effort.

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