Hong Kong could damage its reputation as a financial center if it provides sanctuary dodgers, the United States warned on Saturday after the city said it would not crack down on a superyacht reportedly owned by a Kremlin ally.

The Nord — a 142-metre, $500 million luxury ship linked to Russian billionaire Alexei Mordashov — docked in the waters of Chinese territory this week.

Mordashov is among the oligarchs close to Russian President Vladimir Putin who have been the target of Western sanctions following Moscow’s invasion of Ukraine.

Some of them have had their luxury yachts confiscated in places like Spain and Fiji, but Hong Kong said on Friday that while it implements UN sanctions it cannot enforce those “unilaterally” imposed by countries or blocs.

“The potential use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment,” a US State Department spokesman told AFP.

“Hong Kong’s reputation as a financial center depends on compliance with international laws and standards.”

Yachts owned by people close to Putin have become targets for Ukraine’s western allies, who are looking for the assets of sanctioned figures to punish Moscow for invading Ukraine.

In March, Italy seized the Lady M, a yacht owned by Mordashov, citing European Union sanctions.

China has notably not condemned the invasion of Ukraine, saying it has a “borderless” relationship with Russia.

A spokesman for Mordashov told Bloomberg News this week that the billionaire was in Moscow and declined to comment on the yacht’s movements.

The Nord – which has two helipads, a cinema and more than a dozen luxury cabins – changed its flag from the Cayman Islands to Russia in June.

It was anchored in the eastern Russian port of Vladivostok before making its way to Hong Kong.