Bangladesh, June 11 -- Cypriot tax authorities have acknowledged they are unable to recover over $15 million in unpaid taxes linked to a now-defunct company allegedly used by Russian billionaire Roman Abramovich to dodge value-added tax (VAT) on his luxury superyacht operations. The case has sparked intense political scrutiny in Cyprus and raised broader questions about the countrys vulnerabilities to financial manipulation by sanctioned oligarchs.

The company at the heart of the controversy, Blue Ocean Yacht Management, was reportedly used by Abramovich to manage and lease his $1.2 billion fleet of superyachts through a network of offshore firms. Despite a Cypriot Supreme Court ruling earlier this year that Blue Ocean was liable for unp...