For commuters on their way to work on a chilly London morning and locals walking their dogs, the Phi doesn’t appear even to warrant a glance as they pass its striking profile.
The superyacht remains moored in the UK’s capital after being seized from its Russian owner in the weeks after Vladimir Putin ordered his troops into Ukraine, and not long after its launch as the latest star on the superyacht scene.
With its sleek lines and skyscrapers backdrop, the Phi became a symbol of the push to respond to President Putin's invasion of Ukraine. The UK’s then Transport Secretary Grant Shapps popped up in a TikTok video beside the vessel, announcing: “It's a yacht which belongs to a Russian oligarch, friends of Putin,” as the National Crime Agency, the UK’s equivalent of the FBI, seized the Phi.
Almost two years later, Mr Shapps has moved on to oversee the UK's support for Ukraine as Defence Secretary, but the Phi is still moored in east London amid growing questions over whether the western sanctions drive against the Kremlin has been all symbolism and no bite.
One thing is for sure, the owner, Sergei Naumenko, isn't going to get to play with his €44 million (£38 million) toy any time soon. A UK court last week rejected his latest attempt to free the vessel.
The continued detention of the yacht has, however, raised the question of whether sanctions imposed on Russians, both as a result of the war in Ukraine and stemming from allegations of corruption, are effective in achieving their goals or are more to do with PR.
Experts The National has spoken to say there continue to be loopholes wealthy Russians can exploit to hide their wealth in the UK. While some assets have been frozen, none have been seized outright. Meanwhile, Russia itself continues to trade with the world.
“I think there’s a lot of questions about whether in this particular instance, it was more driven by PR than a tangible public policy outcome,” said Steve Goodrich from the campaign group Transparency International.
“Until we see either individuals before the courts or assets being taken away from them, it looks like sanctions are a bit of a paper tiger."
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In the meantime, the 58.5-metre Phi remains part of the furniture at London’s Canary Wharf.
“We’ve been here since June and to be honest we don’t pay much attention to it,” a woman, out with her husband walking their two dogs, told The National.
“We’ve seen people on it now and again who look like they're doing maintenance. I heard it’s owned by a Russian oligarch but that’s all I know,” added the woman, who asked not to be identified.
The Phi has been moored in London since December 2021, when it arrived from the Netherlands after being completed by the prestigious Royal Huisman Shipyard.
It was only due to stop over in London to participate in the World Superyacht Awards before heading to Malta.
Mr Naumenko owns it through a front company registered in St Kitts and Nevis.
Mr Naumenko, who is adamant he has no connection to the Russian government and has never held any elected or official position, sued to get the superyacht back but in July 2023 a judge rejected the bid, and his appeal against that decision was thrown out this week.
While himself not a sanctioned individual, under UK law his assets can still be frozen if he is deemed to have benefited from the current Russian regime to the extent that he can afford a superyacht.
There was some consolation for him in the ruling when the judges said they were “troubled” by Mr Shapps' “incorrect statements” regarding Mr Naumenko and said these “ought not to have been made”, though ultimately they made no difference to the outcome.
Angelika Hellweger, a lawyer who is a sanctions and financial crime expert, told The National that actions such as detaining the Phi are "done by the West in a PR light to show the Russian elite what will happen to them and hope it has a deterrent effect".
“Moving against yachts and cars and so on is mainly a statement that they will go after them wherever they are and to show Putin and the people around him that the West won’t tolerate them," said Dr Hellweger, legal director at London law firm Rahman Ravelli.
She explained that while the term "seized" is in common parlance when talking about physical assets, they are in fact technically frozen – like a bank account might be – as they have not yet been confiscated.
When it comes to the wider sanctions regime, she said Russia, in common with many other countries in similar situations, has managed to find ways around them.
She cited the example of Russia being able to cope with the impact of the sanctions through a series of informal and shadow trade networks with neighbouring countries such as Kazakhstan and Belarus.
“You cannot isolate an economy forever, in particular one so integrated with the rest of the world, with globally important commodities such as oil and gas, like Russia, on which the West is very much dependent.”
The UK's Department of Transport says Mr Naumenko is picking up the bill for mooring, maintenance and any other charges relating to the Phi's detention.
By some estimates, the cost of maintaining a superyacht amounts to 10 per cent of its cost price, though that's likely to be lower given it's not consuming a large amount of fuel while berthed.
The Phi is among a number of superyachts linked to sanctioned Russian owners that have been detained. Some have been sold, including the Axioma, which was auctioned by the government of Gibraltar in 2022.
So far there has been no indication the UK authorities are looking to confiscate the Phi from Mr Naumenko, a property developer, as they did with the artwork seized from Nazem Ahmad, the alleged Hezbollah financier.
If it were to be put on the market there would be no shortage of potential buyers prepared to pay more than the original price, says superyacht broker Tim Johnson.
“It’s a pedigree yacht and it’s quite a unique design made by a pedigree shipyard,” Mr Johnson, the founder and chief executive of TJB Superyachts, told The National.
“A couple of years ago there was a big stigma with the past history of a yacht such as this but I think people have got past [that], so for some owners out there, they won’t mind that it was built for and owned by a Russian."
Mr Johnson explained that with the years-long wait for a new Royal Huisman yacht to be built, and with inflation pushing up the cost of building new vessels, it’s entirely possible the Phi would fetch more than its list price.
“It would take you four or five years to do something similar and with the time and man-hours that went into it, yachts at that level really hold their value for quite some time," he said.
“So to build this yacht again from start to finish today, you'll probably pay upwards of €70 million. So he could probably look to sell it for around €60 million.”
In the meantime, Mr Naumenko’s legal battle to get the yacht returned continues, said Sir Ian Collett, director of superyacht consultants Ward & McKenzie, who have been representing him.
“Our client’s solicitors and counsel are currently considering the detailed judgment with a view to seeking leave to appeal to the Supreme Court,” Sir Ian told The National.
Among them were a “number of issues within the judgment in which they disagree, and they may form the background to an appeal", in particular the fact that the Court of Appeal found that the Secretary of State for Transport made statements which were “incorrect”.
That the Court of Appeal found that these incorrect statements made no difference to the outcome is “something which we do not accept”.
