G7 and EU to track and sanction trade of Russian diamonds
02/22/2023 / By Arsenio Toledo
The Group of Seven nations (G7) and the European Union (EU) are discussing ways to track the trade of Russian diamonds outside the country’s borders. If successful, the West could soon implement sanctions against the Russian gem trade.
According to the Kimberley Process Certification Scheme, established in the early 2000s, a diamond’s origin must be clear from the very start of the supply chain when it is issued a certificate. This process was designed to end the sale of so-called blood diamonds mined during conflicts to continue financing wars. However, these diamonds can still be very difficult to track.
Cut and polished diamonds can often intermingle at trading houses, and the certificates that clearly state their origin can be replaced with “mixed origin” documentation, disguising their true origin and making it nearly impossible to keep track of where Russian diamonds eventually end up.
Insiders with knowledge about possible Russian diamond sanctions said a solution is not imminent because tracing polished diamonds in a global market is extremely complicated, if not nearly impossible.
But the G7 could still issue some kind of statement on the matter in the next few days as part of an approach by the West to keep international economic pressure on Russia for continuing its special military operation in Ukraine, especially as the conflict approaches the one-year mark.
Furthermore, the latest data show that Russian diamond sales in the EU have increased since the beginning of the conflict.
“The numbers – which have not yet been made public – reveal that … Russia sharply increased diamond exports to the EU,” noted Rob Bates of the gem and jewelry industry-focused news website JCK Online.
In the second quarter of 2022, Russian rough diamond exports surged to $1.11 billion from $1.01 billion in the previous quarter, and $1.09 billion during the second quarter of 2021.
Previous attempts to sanction Russian gems have failed due to difficulty in tracking diamonds
The attempt to track Russian diamonds comes as previous Western attempts to sanction the Russian gem trade have run into resistance from major importer nations such as Belgium, which is home to the world’s biggest diamond trading hub in Antwerp.
Around 85 percent of the world’s rough diamonds pass through Antwerp before making their way to consumers all over the world. An estimated 10,000 people rely on the diamond trade for their employment. Belgian officials have repeatedly blocked EU embargo plans, warning that the move could cost the nation thousands of jobs.
Furthermore, Brussels has argued that the effort to sanction Russian diamonds would be futile because transactions for these precious stones will simply shift to other nations, like China and India, without a proper mechanism to trace them. (Related: Russia boosts gold stock to cushion impact of US, EU sanctions.)
As an example, the United States has already sanctioned the Russian mining giant, Alrosa PJSC, which accounts for about a third of the $80 billion global trade in rough diamonds. The effectiveness of this sanction has been very limited at best because much of the diamond trade flows only start in Russia before flowing through multiple other markets, including nations not participating in anti-Russian sanctions like India, and Western-allied nations like Belgium.
Brussels even noted that the only way to properly sanction companies like Alrosa would be if every single allied Western nation – including those outside of the G7 and the EU – signed up for a ban and supported a watertight traceability system. Such a prospect would be near impossible to achieve.
Watch this clip from “Tucker Carlson Tonight” on Fox News as host Tucker Carlson discusses how anti-Russian sanctions have not negatively affected the country at all.
This video is from the Son of the Republic channel on Brighteon.com.
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Belgium, bubble, chaos, conspiracy, diamond trade, diamonds, economic riot, economy, European Union, finance riot, g7, gemstones, international trade, jewels, money supply, precious stones, products, risk, Russia, sanctions, supply chain, trade
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