How a G7 ban on Russian diamond imports will not be a game-changer, but may well complicate compliance for EU operators.

There is increased talk of the G7 announcing a new ban on the import of Russian diamonds, which would further harmonise a number of countries’ sanctions regimes.

The US, UK, Canada and Australia already have a form of diamond import ban in their regulations, but fully expanding this to the EU and Japan as well would significantly increase the reach of the sanctions – not just because of the size of the domestic markets affected, but also due to the critical role played by cities such as Antwerp in the global market.

“Russian diamonds are not forever and I am delighted that this ban on Russian diamonds is now materialising,”

Charles Michel, President of the European Council

But what would a ban mean in practice? 

Firstly, the largest player in the market, PJSC Alrosa, is already subject to blocking/asset freezes in US, UK, Canada & Australia yet sales in H12023 appear largely unaffected by sanctions according to IDEX.

Secondly, cutting, polishing and rules of origin mean that it is hard to identify where a particular stone was mined, as a well-researched article on France 24 identified.

Thirdly, countries such as India, China and the UAE are of significant importance in the global diamond trade and are unlikely to follow the lead of the G7 in such sanctions.  In fact, recent experience indicates those countries are likely to seek opportunities to profit from remaining outside the sanctions net.

Overall, and bearing in mind we don’t know any details yet, a G7 ban on diamonds is unlikely to disrupt significantly Russia’s position in the global diamond mining market, but those designing new sanctions programmes do not (and arguably should not) “let the perfect be the enemy of the good”.

That said a common G7 approach to a ban is likely to make compliance harder for EU and Japanese operators who are not aligning with the non-EU sanctions already in place.

Subscribe to new posts: