“Russian diamonds are not forever”. Charles Michel, the President of the European Council was ironic in front of the press by announcing this Friday, May 19 at the G7 summit in Hiroshima, Japan, that the European Union was going to “limit the trade in Russian diamonds” within the framework of the sanctions against the invasion of Ukraine.
Charles Michel thus confirmed an upcoming European measure after the embargo already announced this Friday by the United Kingdom on these precious stones. London sanctions also target British imports of Russian aluminium, copper and nickel. For the Western powers, it is a question of restricting Russia’s ability to finance the war. Until now, the gems had always escaped the sanctions packages, despite repeated requests from human rights organizations.
Russia is a major producer of gold, precious metals and diamonds. It is the world’s largest producer of rough diamonds. Diamonds are the country’s third-largest export product, after oil and gas. Russia exported nearly $5 billion worth of diamonds in 2021, according to the Observatory of Economic Complexity, an international trade data visualization site created by the Massachusetts Institute of Technology (MIT).
A very strong diamond industry in India
According to the US Treasury, the mining company Alrosa, which specializes in diamonds, alone accounts for 90% of the diamonds mined in Russia, and 28% of the world market.
The United Arab Emirates, India and Belgium are among the main importers of diamonds. The United States is also an important market for finished products. As reported The echoes, India alone accounts for 95% of the world’s diamond cutting and polishing activity, which represents several hundred thousand jobs and supports millions of families.
For its part, The world recalls for its part that India, a country which does not apply sanctions against Moscow, cuts Russian diamonds before exporting them under the label Made in Indiawhich results in particular in circumventing the embargo decreed by the United States, where half of the world sale of jewelery takes place.
A European official told AFP on Thursday (May 18th) that India’s membership would be essential to guarantee the impact of any sanctions regime in this area. “We would like to engage with them because the diamond industry is very important in India, not necessarily in terms of numbers, but in terms of politics and symbolism,” the source added.
Indian Prime Minister Narendra Modi has been invited to the Hiroshima summit along with the leaders of other major developing economies that the wealthy G7 democracies hope to win over against Russia and China. India also maintains close military ties with Russia and has never condemned Moscow’s invasion of Ukraine.
The resolution of the Belgian deputies
Belgian deputies voted on April 26 for a resolution advocating a ban on imports of Russian diamonds into the European Union, a text intended as “a strong signal” in response to a wish expressed in March 2022 by Ukrainian President Volodymyr Zelensky.
A month after Russia launched the war in Ukraine, Volodymyr Zelensky, aware that the Belgian city of Antwerp is a major platform for the world trade in rough diamonds, had called on Belgium to hit Moscow on the wallet by ceasing its imports. “I think peace is much more valuable than diamonds […] so help us”, had launched the Ukrainian president on March 31, 2022 during a videoconference speech before the Belgian Parliament.
The text voted in committee by the Belgian deputies argues that, on the one hand, Antwerp sees transit “about 85% of rough diamonds” from around the world, “half of polished diamonds and 40% of industrial diamonds”. And on the other, Russia, the world’s largest producer, receives “some 4 billion dollars in revenue each year from its exports of rough diamonds”.
Antwerp is a stronghold for the cutting and refining of rough diamonds and these Russian companies have sold their products there for an estimated turnover in 2021 of 1.8 billion dollars, according to Belgian environmentalists.
In particular, the responsibility of the Russian company Alrosa, led by a close associate of Russian President Vladimir Putin and accused of using its profits to “finance the war in Ukraine”, is targeted. Before Covid-19, Alrosa had been supplying around 25% of the market for this epicenter of the world diamond market for several centuries, specifies The echoes. So far the Belgian authorities have expressed reservations about a possible ban on diamond imports, fearing that the trade will move to other strongholds such as Dubai to the detriment of Antwerp.