Credit: Van Der Valk Company A Yanukovych Pal and the €13 Million Yacht his Family Loves

DONATE Above: The Santa Maria T. Credit: Van Der Valk Company Anton Prygodskyy used to hunt with Viktor Yanukovych, the former president of Ukraine, in a private hunting club just outside Kyiv. Credit: Ukrayinska pravda Anton Prygodskyy. Prygodskyy, a former member of Parliament, used to be a friend of the deposed president, though he told local media that the two fell out in 2007. What’s clear is that their paths diverged after the revolution of 2014, when Yanukovych fled to Russia and Prygodskyy kept doing business in Ukraine. Prygodskyy has not appeared in public since the revolution. Yet his firms still won state tenders as recently as 2016. And he has kept busy in other ways. Leaked documents show that, over the past several years, Prygodskyy was building a luxurious 37-meter yacht equipped with marble and expensive wood fittings. The records from Appleby, a Bermuda law firm, were obtained by the German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ), which organized a collaborative investigation with partners around the world, including the Organized Crime and Corruption Reporting Project (OCCRP). To keep the construction of the yacht secret and minimize taxes, Prygodskyy worked through Maltese companies. For a yacht that cost some €13 million, he probably saved over €3 million in taxes. In October, OCCRP reporters managed to locate the empty yacht at its berth in the Croatian city of Pula. “No photos,” warned a nearby sign. Dutch Quality In 2013, Van der Valk, a leading Dutch shipyard known for its custom-built yachts, received the order to build a luxury yacht. It was a challenging assignment for the company: its first 37-meter-long vessel. The Santa Maria T, a handsome grey and white ship crafted of steel and aluminium, was first launched in the spring of 2015. Bohdan Parfeniuk, a yacht expert, was impressed. “The Dutch level of quality is unattainable for most [other] shipbuilding companies in the world,” he said. “This yacht has basically no limits in its use. It can be used to cross oceans since it has huge storage facilities for water and fuel.” Scorching heat or freezing cold would make no difference, he said. “In terms of thermal protection, you can use it to travel even, for instance, to the Arctic. From the tropics to the permafrost.” In 2015, Santa Maria T was exhibited at an annual yacht exhibition in Cannes, and later drew the attention of international publications that specialize in luxury vessels. Another outstanding feature is the yacht’s opulent art-nouveau interior, with its extensive use of marble. Both the interior cabins and exterior were tailored to the customer’s preferences. To find out how much it cost to build the Santa Maria T yacht, OCCRP journalists sent an inquiry to the Van der Valk office, posing as Ukrainian clients. The response said that constructing a similar yacht would cost at least €13.2 million (without value-added tax or VAT).

Maltese Opportunities According to documents obtained by journalists, a vessel called the Santa Maria T is mentioned in the financial reports of two firms: TUC Limited and Ala Int. Limited. These firms are registered at the same address in Malta and share a director. The ultimate beneficiary of both – the man who controls the companies – is Prygodskyy. The 2014 annual reports of show assets of under $2,000 for Ala Int. Limited, and over 5.6 million euros for TUC Limited. Tetiana Shevchuk, a lawyer from the Anti-Corruption Action Center, a non-governmental organization, has been helping journalists to make sense of the financial reports. “Nearly 6 million euros were received by [TUC Limited] as a loan from a shareholder,” she explained. The shareholder was not identified in the reports. “This is a very simple operation on the part of the shareholder – you transfer the money so that the company can spend it. To avoid taxation, the money is transferred as a loan. From the report, we see that this loan was used to buy some property.” The only property mentioned in the TUC financial report was a motor yacht named Santa Maria T, raising the possibility that Prygodskyy transferred the € 5.6 million to his own firm’s account to help pay for the yacht’s construction. It is unknown where the rest of the money came from. “This is a kind of a de-personification of funds, if you will. Now, it is the company that supposedly owns the money and the company buys certain assets,” Shevchuk said. “This, in particular, could have been a desire to conceal the investment from the Ukrainian state and regulators.” Buying a vessel through a Maltese company using a specific leasing arrangement allows the buyer to reduce the VAT for yachts that are 24 or more meters long from 30 percent to 5.4 percent – a significant savings. The scheme usually works like this: A client registers a company in Malta.

The company buys a yacht from a shipyard.

The yacht is brought to Malta.

The company leases the yacht to a third party – this is the yacht’s actual owner or his representative.

Once the lease agreement ends, the third party buys the yacht for 1 percent of its purchase price.

The buyer pays the minimum VAT and the yacht can now move freely within the EU. In the financial reports filed by Prygodskyy’s Maltese companies, it says that in July 2015, Santa Maria T was leased by TUC Limited to a third party, Ala Int. Limited, through a leasing agreement. It appears that Prygodskyy took advantage of this opportunity to reduce taxes. Given that a yacht like Santa Maria T would cost over €13 million without VAT, using such a scheme with his Maltese companies could have saved Prygodskyy around € 3.25 million. These actions are perfectly legal under Maltese law, but are limited to wealthy persons with very large boats.