The Tax Department has recently filed a criminal case against two Cypriot directors of a company allegedly linked to Russian oligarch Roman Abramovich, over VAT debts of €25 million. The company is Blue Ocean Yacht Management Ltd. It was struck off the Registrar of Companies in 2024 but was reinstated a year later by court order, after former MP Alexandra Attalidou raised the matter in the House of Representatives.
At the same time, international revelations published last week about the movement of billions of dollars in assets belonging to Roman Abramovich through Cypriot companies have brought questions about oversight and accountability in Cyprus back into the spotlight.
The luxury yacht scheme
How was the €25 million tax debt created? What is the connection to Roman Abramovich? How and why was Blue Ocean Yacht Management Ltd struck off the Registrar of Companies?
Between 1999 and 2010, Russian oligarch Roman Abramovich assembled a fleet of luxury pleasure yachts with a total value of around $1.2 billion. Among them was the Eclipse, once the longest yacht in the world, with two helipads and a swimming pool that could be converted into a dance floor.
The yachts spent part of their time in European waters, and their running costs were particularly high. Under the European Union’s VAT regime, such expenses are subject to tax. Exemptions are provided for vessels used solely for commercial purposes, under specific conditions.
According to revelations by the OCCRP (Organized Crime and Corruption Reporting Project), Abramovich’s associates allegedly used a complex system of chartering the yachts in order to avoid paying VAT. Specifically, the yachts appeared to be chartered to seemingly independent clients, who paid for cruises lasting one or two weeks. In reality, however, the companies that appeared to be chartering the yachts belonged to an offshore trust, with Abramovich as the beneficial owner.
The Cypriot tax authorities found that the yachts were not in fact being used for commercial purposes that would justify a VAT exemption. As a result, in 2012, the Tax Department demanded that the Cypriot company Blue Ocean Yacht Management Ltd, which was connected to the fleet, pay approximately €14 million in VAT owed.
The legal battles
On 19 March 2012, Blue Ocean Yacht Management Limited, registration number HE134188, received a VAT assessment of €14,219,071 for the tax periods from 1 December 2005 to 31 August 2010.
The company, which was later renamed BOUM - Blue Ocean Management Limited, lodged an objection with the then VAT Commissioner. The objection was partly upheld on 28 August 2013, reducing the debt by €169,234 to €14,049,836.
On 5 November 2013, the company filed a recourse with the Supreme Court, which was dismissed by the Administrative Court on 28 September 2018. An appeal followed. The Supreme Constitutional Court dismissed it on 27 March 2024 for want of prosecution, as the lawyers could not locate their clients.
After the appeal was dismissed, the Tax Department took steps to collect the debt. However, its investigations did not identify any assets belonging to Blue Ocean Yacht in Cyprus.
In particular, checks with the Cyprus Ship Registry and the Small Craft Registry found no ships or other vessels owned by the company. Nor was any immovable property found, or any bank account from which an amount could be frozen to settle the debt.
The objection and its withdrawal
The process that led to the company being struck off is of particular significance. On 26 August 2022, the Department of the Registrar of Companies and Intellectual Property published a notice of its striking off in the Official Gazette of the Republic. The Tax Department lodged an objection on 21 October 2022.
However, on 17 June 2024, the Tax Department withdrew a total of 1,182 objections to the striking off of companies that remained without officers. The move was part of an effort to clean up the Registrar of Companies and to address issues linked, among other things, to the Global Forum assessments.
Blue Ocean Yacht Management Ltd was on the list, as it had had no director or secretary since 15 March 2022. It was struck off the Registrar of Companies on 19 July 2024.
The criminal prosecutions
The company’s reinstatement in June 2025 opened the way for the proceedings to recover the debt to resume. The reinstatement followed the registration and discussion of the matter before the House Institutions Committee by Alexandra Attalidou, then an independent MP.
The Tax Department managed to trace former executives of Blue Ocean Yacht Management Ltd and filed a criminal case against two Cypriot directors. The case is set for hearing on 26 November 2026. Efforts are also under way to locate a third director of the company, who is a British national.
The two Cypriot directors, who are allegedly liable under the law for the company’s obligations, are seeking to annul the court order under which Blue Ocean Yacht Management Ltd was reinstated. This move is linked to their effort to avert their criminal prosecution, while the €25 million tax debt to the state remains outstanding.
Transfer of billions
Blue Ocean Yacht Management Ltd is not the only Cypriot company allegedly linked to Russian oligarch Roman Abramovich.
An investigation by the BBC and the OCCRP, based on thousands of leaked corporate documents and emails, records actions allegedly connected to the transfer of assets worth billions of dollars from Cypriot companies to corporate structures in the British Virgin Islands.
The revelations make specific reference to Deloitte Cyprus, which is presented as having contributed to the transfer of assets from Cypriot companies, including Amiscan Investments Limited and Electus Investments Limited, to companies in the British Virgin Islands.
The only public reaction to the revelations came from the Cyprus Public Audit Oversight Board (CyPAOB). Its director general, Panos Prodromitis, said the board has been informed of the reports and “is taking all necessary action within the framework of its legal powers and obligations, with the aim of serving the public interest”.
The question, however, is how far this investigation can go. CyPAOB does not have investigative powers comparable to those of the prosecuting authorities, nor does it have the power to access bank accounts. How extensive, then, can an investigation be when the competent authority lacks the tools of the prosecuting authorities?
Names and addresses
The allegations name individuals and companies and describe financial transactions. There are, therefore, specific details that can serve as the starting point for an in-depth investigation.
Abramovich’s lawyers, Deloitte Cyprus and its former chairman, Dimitris Ioannides, have every right to reject the allegations made against them. This does not, however, relieve the competent institutions of their obligation to examine thoroughly the allegations and the evidence made public.
It is unacceptable to spend millions of euros every year restoring Cyprus’s international image after the “golden” passports scandal, which tarnished the country under the government of Nicos Anastasiades, while at the same time leaving unanswered the questions raised by international revelations about the alleged role of Cypriot companies in transferring billions of dollars in assets to offshore structures on behalf of Russian oligarchs.
Cyprus’s credibility will not be restored through advertising campaigns and public relations announcements, but through transparency, effective institutions and determination in investigating serious allegations that expose our country internationally.
