In Hong Kong, Sanctioned Russian Tycoon’s Superyacht Sparks U.S.-China Spat
The vessel, owned by Alexey Mordashov, prompts U.S. State Department to caution against the use of city as a ‘safe haven’
The anchoring in Hong Kong waters of a sanctioned Russian oligarch’s superyacht is ramping up tensions between Beijing and Washington, which warned against the financial center being used as a safe haven.
The 465-foot Nord, owned by steel magnate Alexey Mordashov, moored west of the Chinese territory’s Victoria Harbour last week after departing from the far-eastern Russian city of Vladivostok, according to website MarineTraffic.
Its presence has drawn onlookers in passing boats eager to snap photos of one the world’s biggest luxury vessels. Equipped with two helicopter pads, a cinema and swimming pool, it can be seen flying a Russian flag. It has also ignited a spat between U.S. and Chinese officials, already at loggerheads over Beijing’s crackdowns on freedoms in the former British colony.
Multinational companies, apprehensive about Hong Kong’s future as the best place to do business in China and beyond, have been pulling up stakes following political upheaval, tight Covid restrictions and the passage of a controversial national security law.
Mr. Mordashov—one of Russia’s richest men and the largest shareholder of Severstal PAO, among the world’s biggest steelmakers—has a net worth of $18.5 billion, according to the Bloomberg Billionaires Index.
He was sanctioned by the U.S., the European Union and the U.K. in the wake of Russia’s invasion of Ukraine. Italian authorities in March seized another of Mr. Mordashov’s yachts, the 213-foot Lady M. France and Italy, in sometimes dramatic operations, have seized a handful of vessels that they say belong to sanctioned individuals.
A Severstal spokeswoman said that Mr. Mordashov is in Moscow and declined further comment.
Western governments hope that the barrage of sanctions against Russian tycoons such as Mr. Mordashov might pressure Russian leader Vladimir Putin into ending the war.
China, under President Xi Jinping, and Russia, under Mr. Putin, grew closer when the conflict started. On Feb. 4, the two declared a friendship with “no limits.”
Russia’s invasion of Ukraine has nonetheless forced Beijing to walk a diplomatic tightrope, honoring its commitment to Russia without allowing its ties with the West to collapse.
“If the Nord were to stay in the area for an extended period, I would be inclined to assume that its purpose is to test the continuing friendship between Russia and China,” said James D. Fry, an associate professor of law at the University of Hong Kong.
The U.S. and China may be discussing behind closed doors the Nord’s presence in Hong Kong, though the U.S.’s legal position is unclear without further details on its stance, he said.
Should Hong Kong and the mainland government not support Western calls for cooperation, “Russian oligarchs may see this as a sign that Hong Kong might be a ‘safe haven’ for them and their assets,” Mr. Fry said. The city’s policies could change over time, he added.