Editor’s Note
The EU has expanded its sanctions against Russia by targeting diamond producer Alrosa and its CEO, reinforcing the G7-led embargo on Russian diamonds that began in January.
The European Union announced on Wednesday that it has placed the Russian diamond giant Alrosa and its CEO on the list of sanctioned entities, in response to Russia’s attack on Ukraine. This measure aims to complement the embargo on Russian diamonds that came into effect on January 1st as part of the G7, which was included in the EU’s twelfth package of sanctions adopted in mid-December.
Russian diamond sales are estimated at $4 to $5 billion annually. Alrosa accounts for 90% of this production. It is also the world’s largest producer, with about one-third of global sales volume, ahead of De Beers.
The company, controlled by the Russian state, is involved in all stages of the value chain: extraction of rough diamonds from several mines, industrial diamonds, and the cutting and sale of gemstones. By targeting the company, the European Union seeks to
clarified its High Representative for Foreign Affairs, Josep Borrell.
The name of Alrosa’s President, Pavel Marinitchev, has been added to the list of nearly 2,000 individuals and entities sanctioned since the start of the war in Ukraine, whose foreign assets can be seized and frozen.
Moscow dismisses these measures, claiming it can easily circumvent them.
reacted Finance Minister Anton Silouanov on Tuesday during a trip to Beijing.
The war in Ukraine has reshuffled the cards of the global diamond industry. A unilateral embargo was implemented by the United States as early as March 2022. Some Russian diamonds, boycotted by Western jewelers, have since found buyers in Chinese markets, the United Arab Emirates, or India. Alrosa has reportedly hardly suffered from these disruptions, with its production falling by only 3% in 2023 compared to the previous year.
The implementation of an embargo by the G7 and the European Union was extensively negotiated. Belgium had to overcome the reluctance of Antwerp’s diamond traders, who feared a collapse of their business. Over $200 million worth of diamonds are traded there daily, and 86% of the world’s rough diamonds pass through. A stone traceability system has been decided upon, but its implementation details remain unclear.
Belgian Prime Minister Alexander De Croo finally acknowledged in early December. Russian stones polished in third countries are expected to be subject to an embargo in a second phase, starting in September. India, which performs 90% of the world’s diamond cutting and polishing, fears being an indirect victim of the G7’s decisions targeting Russia.
