It was Christmas 2011, a year after Roman Abramovich had received his new superyacht, Eclipse. Despite the expectation that the oligarch would be on board for the festive season, records revealed that the vessel had been chartered by a company headquartered in the British Virgin Islands.
Photographs from Christmas Day that year depicted Mr. Abramovich enjoying the Caribbean sunlight on the yacht's swim platform, with Eclipse's prominent letter-E logo in the background.
The arrangement misrepresented the oligarch's yacht fleet as part of a commercial leasing enterprise to evade millions of euros in VAT on their procurement and operational expenses. Tax lawyer Tommaso Di Tanno emphasized to the BBC, There has been tax evasion. This is criminal.
In response, Mr. Abramovich's legal team, noting his current base in Istanbul, Tel Aviv, and Sochi, stated that he had always sought independent expert tax and legal counsel and abided by it.
The oligarch, recently sanctioned by the UK due to his links with Vladimir Putin, had acquired five luxurious yachts during the 2000s, all involved in the tax avoidance scheme.
Among them was the 115m (377ft) Pelorus, reportedly used by Chelsea footballer John Terry for his 2007 honeymoon, and Eclipse, previously the world's largest private yacht at 162.5m (533ft) and valued at around $700m (£559m).
The leaked documents from Cypriot corporate service provider, MeritServus, laid bare the details of the oligarch's corporate empire, showcasing how his advisors orchestrated the tax evasion on the yachts.
The files disclosed how Mr. Abramovich's businesses utilized a network of companies under a series of trusts, with him as the beneficiary. The arrangement involved leasing the yachts to entities in the British Virgin Islands seemingly independent but actually controlled by Mr. Abramovich, to bypass VAT in EU waters.
The BBC highlighted a revealing 2005 memo on the proposed "Operating Structure," emphasizing the aim to avoid VAT on yacht purchases and related expenses.
The complex "structure," as tax experts noted, was devised to evade taxes, constituting a criminal offense. The resurfaced documents also indicated backdated charter agreements and artificial billing practices to manage expenses within the scheme.
Despite the façade of a legitimate business operation, evidence suggested commercial contracts designed for different purposes were misapplied in Abramovich's yacht lease agreements, further confirming the deceptive nature of the setup.
Legal challenges surrounded the scheme, with investigations in Italy and Cyprus concerning unpaid duties and tax evasion, shedding light on the dubious practices employed by Mr. Abramovich's corporate entities.
Recently, media outlets including The Guardian, L'Espresso, and OCCRP, in collaboration with the Bureau of Investigative Journalism, have scrutinized this case, revealing the intricate web of deceit woven through Mr. Abramovich's superyacht enterprise.