Two former directors of a Cypriot company tied to Russian oligarch Roman Abramovich are due to stand trial at the Limassol district court on November 26 over €25 million in unpaid VAT.
Blue Ocean Yacht Management Ltd managed Abramovich’s superyachts, which together were worth about €1.2 billion.
Cypriot tax authorities allege sham transactions were used to avoid the VAT due. Abramovich is not charged in Cyprus, nor does the indictment name the people who allegedly designed and organised the scheme.
Reporting by the Organised Crime and Corruption Reporting Project (OCCRP) names Maria Damianou, Ioanna Ilia and Neil Wade as former Blue Ocean directors facing tax related charges, along with Meritservus Secretaries Limited.
OCCRP reported that Blue Ocean itself is accused of failing to pay more than €26 million in tax and interest, and that a third former director was not served an indictment because his whereabouts are unknown.
The two women were employees of Meritservus, a Limassol corporate services provider that allegedly managed Cypriot companies for Abramovich’s benefit.
They are said to maintain that they were ordinary employees following the instructions of their superiors.
At an earlier hearing, their lawyer asked for access to the evidence and made no comment on the charges; The director of Meritservus has declined to comment.
Under Cypriot company law, directors are responsible for management, accounting records, tax returns and payment of taxes due.
Article 46 of the VAT Law provides for a fine of up to three times the VAT owed, up to three years in prison, or both.
Blue Ocean received a VAT assessment of €14.2 million on 19 March 2012, though the objection took until 27 March 2024 to be finally determined, by which time the money and the directors had fled, with the accruing interest now standing at €25 million.
According to Tax Commissioner Sotiris Markides, the company’s lawyers spent 12 years contesting the assessment, with the appeal being dismissed as the lawyers could not locate their clients.
The company registry shows Blue Ocean had no officers from 15 March 2022 and was struck off on 19 July 2024 without paying.
A court order obtained by the tax department restored it in June 2025, after the matter was raised in parliament by then independent MP Alexandra Attalides.
Searches of the land registry and banks found no assets to freeze, and the company’s accounts were closed, owning no movable property.
OCCRP reported that Abramovich assembled a fleet of luxury yachts between 1999 and 2010, among them the Eclipse, once the longest yacht in the world, with two helipads.
Expenses such as fuel, crew wages, port fees and maintenance attract VAT in the EU, with exemptions for vessels used exclusively for commercial purposes.
Private use of a yacht attracts VAT, which Cyprus now charges at the standard 19 per cent, while genuine commercial charter can be treated as exempt.
Investigators allege the yachts, held by British Virgin Islands companies, were leased to Blue Ocean, which chartered them on to other companies controlled by Abramovich’s trust, so no VAT was collected on running costs.
One refuel of the Eclipse could cost up to about €1.7 million and carry about €350,000 in VAT.
Five superyachts appeared to be chartered to independent clients paying up to €1.1 million for each weekly cruise.
In reality the clients were four British Virgin Islands companies belonging to an offshore trust, with Abramovich as beneficial owner; tax authorities concluded the yachts were not used commercially.
Abramovich has said he took independent professional tax and legal advice and acted on it, while his lawyers have denied any role in any alleged tax evasion.
The UK sanctioned Meritservus in 2023, along with its then chairman and managing partner Demetris Ioannides, whom it accused of creating “murky offshore structures”.
Ioannides, 83, declined to comment through his lawyers, citing ill health.
Meritservus was a division of Deloitte Cyprus until 2005, which in an investigation published on October 12 by BBC Panorama and OCCRP, alleged that Deloitte Cyprus signed off backdated paperwork for Abramovich companies.
Speaking to the Cyprus Mail, Deloitte Cyprus said it “acts in compliance with applicable laws”.
The Cyprus Mail approached the anti-money laundering unit (Mokas), which insisted that despite being an independent body, it can “only analyse data when financial discrepancies appear and then pass the information to the police”.
The finance ministry, which oversees the tax department, declined to comment on the case.
Christos Andreou of the newly formed Cypriot FBI said the force would not investigate as “the case does not concern organised crime”.
Attalides, who originally pressed the tax department to investigate the case, said it was “unbelievable that the supervisory bodies were so incompetent”.
She said, “criminal investigations should be opened into anyone who held a supervisory position, to examine conflicts of interest”.