More than 600 days after Russia began its full-scale invasion to destroy Ukraine’s sovereignty, the West continues to look for ways to stifle its war economy. Now, after months of blockades, the European Union is moving to ban diamonds of Russian origin, which supply a third of global demand. To be effective, the Community Club links its veto to that of the G-7, the group of most developed countries. And that support from the group consisting of Germany, Canada, the United States, France, Italy, Japan and the United Kingdom (the EU is not a listed member) is already on the table. According to several community sources, Brussels is currently finalizing its twelfth package of sanctions against Russian companies and individuals and is working to include Russian diamonds in it – or at least in a later annex.
“In order to reduce Russia’s revenue from its exports, we will accelerate our consultations on energy, metals and all non-industrial diamonds, including diamonds mined, processed or produced in Russia,” say the G-7 foreign ministers and EU high representatives -Foreign Affairs Policy, Josep Borrell, in a joint statement after their meeting a few days ago in Japan. However, technical details still need to be clarified to implement the ban on Russian diamonds in Western markets, which account for 70% of global demand for jewelry with these gemstones. The key is to determine the origin of the stones (primarily these are rough gemstones of one carat or more). And it’s not easy.
A team of G-7 experts will visit Belgium this week to analyze traceability proposals that guarantee and document that incoming gems do not come from Russia. The team will meet with representatives of the European Commission and travel through Antwerp, the historic center of the wholesale and rough diamond trade, where they will speak to companies in the sector. His multi-day visit, which coincides with the meeting of the 27 foreign and European ministers in Brussels, follows a similar trip to India, where for years 90% of the world’s rough diamonds have been cut and polished.
Yellow diamonds at one of the diamond markets in Antwerp, October 30th. JOHANNA GERON (Portal)
Russian oil and gas is already subject to G7 and EU sanctions. However, these penalties have exceptions and loopholes that allow the Kremlin to circumvent the ban and reach Western markets. After months of pressure and doubts about the effectiveness of the veto, Brussels is now also preparing to focus on diamonds, which bring the Kremlin more than 3.7 billion euros a year, mainly through Alrosa, a state-owned majority.
As EL PAÍS reported, the Community Executive tried to add Alrosa to its list of Russian companies subject to sanctions as early as September 2022; However, this occasion involved supporting the Russian Navy through financial support for the submarine Alrosa. This proposal was not implemented because the sanctions require the unanimous consent of Member States.
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Belgium asks not to damage the market
In the EU, one of the partners, Belgium, is involved in the diamond trade through the large port of Antwerp. However, the Belgian government, which initially did not support the proposal, assures that it supports the veto on Russian gems, but also that a tracking system is necessary that does not harm the rest of the market. And he made a technical suggestion. The current system, which is based on documents certifying the origin of gemstones – such as the “Kimberley Process”, which uses documents certifying that they are not blood diamonds – and which can be changed, is no longer working.
A few days ago, Belgian Prime Minister Alexander de Croo assured that the blockade of Russian diamonds was “closer”. However, it could still be months before the sanctions come into force once they are approved at the European level – which will likely wait for the technical fit to be refined. Belgium is considering the deadline of the first quarter of 2024. For the veto to come into force, the most modern tracking system must be introduced, which will X-ray the stones (raw and of a certain size) so that they can be tracked throughout the entire period. Chain.
The United States has already imposed sanctions on Russian diamonds (rough diamonds and diamonds cut and polished in Russia). However, trade in these gems has hardly suffered in Russia, where, according to experts and analysts, it has managed to circumvent the US veto (the largest consumer of diamonds for jewelry) and sanctions by bringing the gems to the market through other routes were brought countries and the indication of other origins.
Some of the world’s leading sellers of diamond jewelry say they have not bought Russian gems since the full-scale invasion of Ukraine began, but gaps in documents proving the diamonds’ origins mean they continue to rely on the market, they say diplomatically, sources aware of the debate over European sanctions. It is now a matter of ensuring that the European measure does not have these gaps.
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