Roman Abramovich, the Russian billionaire and former Chelsea FC owner, is now at the center of a major tax investigation in Cyprus, where authorities are seeking to recover €25 million in unpaid taxes linked to allegedly fictitious charters of luxury yachts.
The case revolves around Blue Ocean Yacht Management Ltd, a company tied to Abramovich and registered in Limassol. It was struck off the Cypriot Companies Registry in July 2024 due to significant outstanding debts to the state. However, following a recent court order, the company was reinstated — not to resume operations, but to allow prosecutors to initiate criminal proceedings against its former directors, who are believed to have orchestrated the tax avoidance scheme.
Although back on the registry, Blue Ocean remains non-compliant, having failed to appoint a new board of directors. The Registrar of Companies has warned that unless the company fulfills its legal obligations, it could be delisted again. Meanwhile, enforcement actions to collect the unpaid taxes are already underway.
At the heart of the case is what Cypriot authorities describe as a sophisticated strategy to avoid paying VAT on luxury yacht operations. Under European Union law, the use of such vessels is subject to value-added tax unless the yachts are used strictly for commercial purposes. Between 1999 and 2010, Abramovich is believed to have assembled a fleet of superyachts worth over $1.2 billion, including the Eclipse, a 162-meter vessel equipped with two helipads and a swimming pool that converts into a dance floor.
To circumvent tax obligations, Blue Ocean allegedly entered into bogus “bareboat charter” agreements, leasing the yachts to other companies that were ultimately controlled by the same trust tied to Abramovich. These shell companies, many of them registered in the British Virgin Islands, acted as nominal clients but were in effect part of the same ownership structure — a setup authorities now say was designed to give the appearance of commercial use while enabling private enjoyment of the yachts.
An investigation by Cyprus’s Tax Department in 2012 determined that the charters were purely nominal and that the yachts were, in fact, used privately. The state imposed a €14 million fine, which has since grown to €25 million with interest. All legal appeals made by Blue Ocean were eventually dismissed, with the final attempt collapsing in 2024 after the company’s legal representative admitted to losing contact with Abramovich.
Leaked internal emails have added weight to the case, revealing apparent intent to deceive regulators. In one 2005 message, a company executive acknowledged that the corporate structure was “designed to look legal,” while warning that a determined auditor could uncover the real links between the chartering entities. Additional documents showed that these so-called charters sometimes commanded weekly fees of up to $1.25 million — despite all parties being under common ownership.
Further evidence emerged from internal spreadsheets tracking yacht usage, identifying Abramovich himself as the main user of the vessels. A former crew member of the Eclipse confirmed that the yacht was never chartered to outside clients and was used exclusively by the oligarch’s family.
The case has also implicated several Cypriot and UK-based service providers, including offshore consultants and legal advisors. Among them is Dimitris Ioannides, CEO of MeritServus, a firm from which key documents were leaked. Ioannides is already under British sanctions in connection with other similar investigations.
The Blue Ocean case illustrates how networks of offshore companies and trusts can be used to obscure true ownership and sidestep tax laws. Despite the imposition of fines, it remains unclear whether the Cypriot state has successfully recovered any of the unpaid taxes. Criminal proceedings against the individuals involved are still pending.
These revelations form part of Cyprus Confidential, a global investigative project led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media, in collaboration with OCCRP and the BBC.
