Editor’s Note
This article outlines the G7’s phased sanctions on Russian diamonds, beginning with direct import bans and culminating in a new traceability system. The measures aim to disrupt revenue streams while increasing supply chain transparency for consumers.
The G7 has imposed a ban on direct imports of Russian rough diamonds effective from January 1, 2024. Subsequently, a ban on indirect imports of Russian gemstones will be implemented from March 1, 2024.
By September 1, 2024, the G7 will introduce a “robust traceability-based verification and certification” mechanism for rough diamonds.
Traceability-based verification will mean that a diamond will be tracked from the time of mining throughout the entire supply chain to the end consumer to ensure it is not of Russian origin.
The G7 countries include the United States, the United Kingdom, France, Germany, Italy, Japan, and Canada.
Russia produces one-third of the world’s diamond supply.
The ban on Russian diamonds is raising concerns for the Indian gem and jewelry trade.
The ban on diamonds processed by third countries from March 1, 2024, is the biggest concern.
Following Russia’s invasion of Ukraine, the United States imposed sanctions on diamonds from Alrosa.
Alrosa is the second-largest diamond producer by revenue after De Beers.
Surat polishes eight out of ten of the world’s diamonds. More than 90% of these diamonds are sourced from Russia’s Alrosa.
Over 30% of rough diamonds imported into India for cutting and polishing come from Russia.
These diamonds are polished or made into jewelry and exported to other countries.
The major consumers of polished diamonds are the United States and Hong Kong, followed by Thailand, Israel, the UK, the UAE, Belgium, Singapore, Switzerland, and the Netherlands.
India exported polished natural diamonds worth USD 24,433.75 million between April 2021 and March 22, 2022.