Cyprus Parliament Asked to Probe Abramovich Firm's Taxes After Superyacht Scheme

A Cypriot parliamentary committee is scheduled to discuss a company owned by Russian billionaire Roman Abramovich, which shut down after being hit by $18.5-million in taxes related to a fraudulent superyacht-rental scheme.

Citing a January investigation by OCCRP and its Cypriot member center, CIReN, Parliamentarian Alexandra Attalides wrote a letter asking the Committee on Ethics to look into whether the tax bill was paid. 

“In the event that this has not happened,” she asked the parliamentary committee to seek information on “what actions the competent authority took before the dissolution of the company, in order to ensure the repayment of the aforementioned debt.”

The letter from Attalides, an MP with the opposition Volt party, was entered into the parliamentary agenda today. It is not yet clear when the discussion will take place, and in which committee.

The investigation by CIReN and OCCRP revealed that Abramovich’s company, Blue Ocean, set up a fake superyacht-leasing business in an apparent attempt to evade millions of euros in tax. 

The scheme began in 2005, and lasted till 2012 when Cypriot tax officials found that the yachts were not in fact used commercially. They ordered Blue Ocean to pay 14 million euros (about $18.5 million) to cover the unpaid Value Added Tax (VAT).

Lawyers for the company tried to overturn the order in courts for 12 years, but their appeal was dismissed in March 2024. Blue Ocean was dissolved the following July. Legally, the company could not have been closed unless the unpaid tax had been settled.

The revelations reported by OCCRP and CIRen prompted questions in parliament at the end of January from Attalides and another opposition MP, Christos Christofides of the Progressive Party of Working People. Separately, they asked Minister of Finance Makis Keravnos for information on whether Blue Ocean had met its tax obligations.

However, Keravnos has yet to respond. 

“Unfortunately until today there is no reply to this question” Attalides told CIReN. “I submitted a request to the Committee of Ethics to debate the issue so that we get the necessary answers to the handling of this case by the government.”

Under Cypriot law, the VAT Commissioner is not obliged to disclose information, due to tax secrecy, unless requested to do so by the Minister of Finance. Anyone subject to VAT must pay within 30 days of the notice, or they risk imprisonment for committing a criminal offence. 

The findings published by OCCRP and CIReN in January were based on leaked emails from people working for Abramovich, which reveal an explicit intention to deceive Cypriot tax inspectors. The emails were obtained by the whistleblower group Distributed Denial of Secrets and initially shared with OCCRP and The Guardian.

Responding to journalists at the time, lawyers for Abramovich rejected “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.”

The leaked emails show that executives at Abramovich’s companies devised a complex scheme in which his superyachts were leased to ostensibly independent customers. This allowed them to take advantage of an EU tax exemption for commercial vessels.

In reality, the vessels were leased by firms registered in the British Virgin Islands — a Caribbean territory known for its corporate secrecy — that were owned by Abramovich’s offshore trust. 

Abramovich has been sanctioned in several jurisdictions in relation to Russia’s war on Ukraine. He is a “leading businessperson who has long and close ties to the President of the Russian Federation Vladimir Putin,” according to a Swiss sanctions notice.