Russian diamonds forgotten on European sanctions list

Russian diamonds forgotten on European sanctions list

In Europe, the heart of the diamond industry lies in Antwerp, Belgium. On three downtown streets that are among the best guarded in the country. “In this district alone, 1,600 companies are registered,” says Hans Merket. This researcher from the NGO IPIS, which documents the diamond trade, is one of the best experts on the European market. “In Antwerp, he specifies, 25% of diamonds come from Russia”. According to him, the war in Ukraine did not change the volume of transactions. According to the latest official figures from the Belgian National Bank, diamond exchanges with Russia even reached record levels four months after the start of the war. “This year, in June, Russian diamond imports reached 393 million euros. Last year it was only 175 million euros in the same period. That is an extraordinary number,” emphasizes the seeker.

Imports that are not weakening and have benefited a large Russian company called Alrosa. The company, which is based in Myrni in eastern Siberia and specializes in the extraction of diamonds in huge open-pit mines, is 33 percent owned by the Russian state. The head of the company, Sergei Ivanov, is even regularly received by Vladimir Putin, as here in 2020. Alrosa representatives in Russia refused to answer our questions when asked. According to our information, teams of the Russian company still work from Antwerp, but it is not possible to know either the number of employees present or the reality of their work. With many sectors of the Russian economy being hit by European sanctions, how can Alrosa be spared despite its ties to the Kremlin? In the Brussels Parliament, more and more MPs are openly asking the question. “Russian diamonds are blood diamonds,” denounces Kathleen Van Brempt, MEP from the Progressive Alliance of Socialists and Democrats group in the European Parliament. “So far we have swept diamonds under the carpet with every wave of sanctions. I regret it because in the United States, for example, they sanctioned Alrosa from the start of the war,” adds the MEP.

According to several elected officials, the fact that no European sanctions have been imposed so far is because the influential diamond dealer lobby has managed to make its voice heard even in the corridors of the European Parliament. The argument is well-established: “It would take the Russians less than 48 hours to load their diamonds on planes and sell them in India. So the impact for Russia would be zero and for Antwerp it would be catastrophic,” specifies Tom Neys, spokesman for AWDC, the Association of Antwerp Diamond Dealers. Thousands of jobs are at stake by the way, but ahead of the Flemish city’s diamond bourse, the prospect of European sanctions doesn’t seem to spook everyone. “Embargoes don’t work,” slips anonymously to one of the diamond dealers we meet. Another of his colleagues tells us that some diamond traders have even found a solution to implement possible sanctions: “Now Russian diamonds are coming in via Dubai. There they receive a kind of virginity certificate”. By transiting through third countries, Russian companies could complicate the traceability of gemstones and thus limit the effectiveness of potential European sanctions.

Among our sources (non-exhaustive list):

Russian rough diamond import statistics (Belgian National Bank)

Hans Merket, researcher at IPIS (Antwerp)

Tom Neys, AWDC Spokesman (Antwerp)

Kathleen Van Brempt, MEP of the Progressive Alliance of Socialists and Democrats in the European Parliament.

Belgian delegation to the European Union.