The trade in precious stones has thus far largely avoided sanctions
The G7 and EU are set to unveil sanctions on the import of gemstones mined in Russia, including those cut and polished in other countries, the New York Times reported this week.
According to the newspaper, the G7 is expected to formally announce sanctions in September. The terms for tracking and tracing individual gemstones are reportedly being finalized, as well as the details for the accompanying customs paperwork. The restrictions could come into effect in January after the holiday retail season, the NYT noted, warning that jewelry shoppers could see prices rise.
G7 countries have been debating sanctions on Russian diamonds for more than a year. The step is strongly opposed by major gem importers such as Belgium, which is home to the world’s biggest diamond trading hub in Antwerp. In May, G7 leaders pledged to restrict trade in diamonds mined, processed or produced in Russia in an effort to further cut Moscow’s revenues, claiming they would curb the $4.5 billion Russian diamond trade by using methods including high-tech tracing.
Experts, however, say diamonds can change hands 20 to 30 times before reaching the market, making it difficult to trace their origin. “It will be important to find the right balance between ambition and realism,” Hans Merket, a researcher with the International Peace Information Service, told the NYT. He claimed it could take “years rather than months to get all noses in the right direction and reorganize this complex global supply chain.”
The US and UK have already banned imports of Russian rough diamonds, although Washington still allows the import of gems extracted in Russia if they have been substantially altered in other countries. Canada and New Zealand have adopted similar measures against Russian mining giant Alrosa.
“The current US sanctions only covered rough Russian diamonds or those cut and polished inside Russia,” said diamond industry analyst Paul Zimnisky. “Given 90% of diamonds are cut and polished in India, and can therefore be classed as Indian gems, the current regulations aren’t as strict as you might think.”
Meanwhile, Moscow has reoriented its diamond supplies. China, India, the UAE, Armenia, and Belarus have all seen a significant increase in rough and cut stones from the sanctioned country.
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