Editor’s Note
The EU has expanded its sanctions regime to include Russian diamonds, marking a significant escalation in economic pressure. This analysis examines the strategic implications and potential impact of this latest measure.
The EU Council adopted a twelfth package of sanctions against Russia on Monday, prohibiting it from exporting a new series of products to Europe, including diamonds, which represent a windfall of $5 billion for the country.
After gold and jewelry, diamonds are now the target of the European embargo against Russia. The 27 member states hope to deal a severe blow to the Russian economy through the new restrictions voted on Monday, December 18.
This new measure comes as, since February 2022, the EU has already “banned imports of Russian goods worth 91.2 billion euros.” This represents 58% of imports of Russian products.
Mireille Clapot, a member of parliament from Drôme aligned with the presidential majority and vice-president of the Foreign Affairs Commission, further explained that the enacted measures demonstrate that the EU “has made a significant effort – in addition to opening accession negotiations with Ukraine – and is sending a strong signal to Russia.”
This is the first time the European Commission has included this diamond import ban in its proposal, whereas last February Belgium estimated that such a measure “would make no economic sense.”
Starting in January 2024, the direct ban will initially apply to “non-industrial natural and synthetic diamonds as well as diamond jewelry” originating from Russia. The sanctions will also apply to Russian stones cut in other countries starting in September 2024.
For while the minerals are extracted in Russia, it appears that 95% of them are cut and polished in India before being exported under the “made in India” label to various markets.
The precious stone trade earned Moscow – which is the world’s leading exporter by volume – approximately $5 billion in 2021. In Europe, the precious mineral is sold in Antwerp (Belgium). Diamond dealers thus achieved a turnover of $1.8 billion that same year. This is why Belgium long showed reluctance to implement this ban.
The action taken therefore aims to “develop an internationally coordinated diamond ban” that would deprive Russia of this significant source of income. The Russian company Alrosa, which controls about 90% of the volume in the territory, risks seeing its revenue drop by 30%.
To circumvent the system, the MP assures that “the Russians must constantly find other ways to do (business). The goal is not to collapse the country’s economy, but to hinder the war effort.”
