South Africa May Provide a Safe Haven for $500M Sanctioned Megayacht

South Africa is choosing not to enforce U.S. sanctions on the $500 million Russian megayacht Nord, which is currently en route to Cape Town - despite a push by the city’s mayor for the vessel to be denied entry.

The Nord is a brand new 10,000 GT yacht owned by sanctioned Russian billionaire Alexey Mordashov. Mordashov, a close ally of Russian President Vladimir Putin, is the owner of mining and metals giant Severstal. Forbes estimates his family's net worth at about $30 billion, making him the wealthiest man in Russia.

Nord is on the move, a rarity for a Russian megayacht under sanctions. She departed Hong Kong on October 20 and is said to be on the high seas heading to Cape Town. She is due to arrive on November 9, and South Africa signaled Wednesday that it intends to offer a safe haven for the warship-sized vessel, despite local objections.

Cape Town Mayor Geordin Hill-Lewis has appealed for the megayacht to be denied entry, and he has hinted that Mordashov may be on board the vessel. (A spokesman for Mordashov told Bloomberg that the oligarch is not on the yacht and claimed that he has been in Moscow.)

Hill-Lewis has asked foreign minister Naledi Pandor to prevent the Nord - and her owner - from entering the country, citing Russian aggression in Ukraine.

"It must be said that so far, our country's foreign policy conduct in relation to Russia's illegal, imperialist war has been nothing less than shameful. Here is an opportunity to correct some of those errors of judgement and stand up for what is clearly right,” said Hill-Lewis in a statement earlier this week. 

Presidential spokesman Vincent Magwenya responded by asserting that South Africa has no legal obligations to abide by sanctions imposed by the U.S. and the European Union, an indication that the country intends to allow the Nord to dock in Cape Town. “South Africa’s obligations with respect to sanctions relate only to those that are specifically adopted by the United Nations,” said Magwenya on Wednesday, adding that Mordashov is not under any UN-sponsored sanctions.

The ruling African National Congress (ANC) party has a history of ties with Russia dating back to the days of the Cold War, when the Soviet Union provided arms, training and support for the fight against apartheid. Those ties have not been forgotten, and South African President Cyril Ramaphosa - a veteran of the ANC's liberation movement - has refused to condemn the Russian invasion of Ukraine, despite pressure from civil society. 

In March, Mordashov lost access to one of his smaller vessels, the $70 million Lady M, which was seized by Italian police. For his part, Mordashov claims that he has no involvement in Russian politics and should not be sanctioned for Moscow's decisions.