As part of a broader sanctions package, the EU imposed sanctions on Russian diamond giant Alrosa and its CEO Pavel Marinychev on Wednesday. The powerful Alrosa, located in the northern Siberian republic of Yakutia (Sakha), is the largest producer of rough diamonds in the world. The 44-year-old CEO of the company has been added to the European blacklist, which means that his assets will be frozen and he can no longer obtain a visa for EU countries.
The ban on the import, export and transit of natural and synthetic diamonds from Russia is part of the twelfth sanctions package against Russia, which EU countries agreed in December. Alrosa controls an estimated 90 percent of Russia’s diamond production, generating “significant revenue” for the Russian government, according to the European Council’s statement on the sanctions, published on Wednesday. Russia, with Botswana, has the largest supply of diamonds in the world. Last year, Russian diamond exports were estimated at more than 3.5 billion euros. Industrial diamonds (of low quality) and individual jewelry are exempt from the measures.
Months of negotiations
The EU sanctions are the result of months of negotiations with the G7, which also introduces a ban, with the common goal of cutting off the Russian economy from an important source of income. There is a lot of international resistance to the measures. Within the EU, Belgium in particular, one of the world’s largest diamond markets and a major importer of Russian diamonds, insisted on the introduction of an effective system to enforce the ban. This is to prevent trade from simply moving elsewhere. From March 1, the trade of Russian diamonds via third countries will be restricted, and from September a “robust” system should come into effect to monitor compliance with sanctions within the EU and G7.
The sanctions also impact India, the country where the vast majority of diamonds are processed, providing income to millions of Indian diamond cutters. Last year it temporarily halted imports from Russia to prevent a surplus of diamonds on the shaky market and price drops.
India hopes to be relatively unaffected by the sanctions, because it mainly processes smaller Russian diamonds. According to instructions published on the European Commission’s website, Russian diamonds cut in a third country weighing 1 carat (0.2 grams) or more will be banned from March. From September 1, 2024, this ban will be extended to industrially produced diamonds, jewelry and watches containing diamonds with a weight of 0.5 carats or more.
The Kremlin is furious about the measures and announced last month that it would do everything it could to circumvent the sanctions. “Those possibilities exist and will certainly be found,” said Kremlin spokesman Dmitry Peskov.
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