The Group of Seven (G7) countries will announce a ban on the import of Russian diamonds in the next 2-3 weeks in an effort to further reduce revenues that help finance Russia's war against Ukraine.
Source. Belgian officials told reporters on Friday, Reuters reports.
The embargo, proposed by Belgium, whose city of Antwerp is the world's first diamond trading center, will come into effect in January.
If the ban on the multimillion-dollar trade is announced, it will split the global diamond market, as the G7 accounts for about 40% of the market.
"We are talking about restructuring the global market," the official said, acknowledging that the system would not work perfectly right away.
"Russia is the largest supplier in the world. With this system, we cut them out, leaving them in a lower market with lower prices. We are reducing financial flows from this sector," he emphasized.
According to Eurostat, the EU bought 1.4 billion euros worth of Russian diamonds last year because it did not ban the import of gems and did not blacklist their producer Alrosa.
The EU had previously put forward its own ban, but Belgium was concerned that it would divert trade to other centers and away from Antwerp. In addition, the EU alone accounts for only 15% of the global market.
About 90% of the world's diamonds are cut in India.
Belgium proposes three levels of control system that will generate two G7 certificates for rough and polished diamonds, and only after that the goods will be able to move freely in the G7 countries.
"Indian polishers can polish anything, but Russian gems must be separated... At the point when a polished diamond is offered for export, a link will be made to the original diamond, again using a combination of physical verification and provenance data," the second official said.
Belgium said that the trade in Russian diamonds in Europe has already fallen by 95-98% and is no longer commercially significant.
In August 2022, Bloomberg reported that Russia had found a way to circumvent the sanctions imposed on the sale of its diamonds. This allows the country to earn hundreds of millions of dollars every month. The relevant transactions are conducted through Indian banks.
According to an international agency, the Russian company sells more than $250 million worth of diamonds every month, which is only 20-30% less than pre-war sales, and controls a third of the global rough diamond market.
In May 2023, the United Kingdom announced an embargo on Russian diamonds and metal.
The United Kingdom announced this on the day of the G7 meeting in Hiroshima. Russian diamond exports reached $4 billion in 2021.
Belgian Antwerp is the world's largest diamond trading center. Belgium has long blocked the introduction of sanctions against Russian diamonds in the EU. The authorities explained that this would move the lucrative gem trade to other places.
In May, it was reported that Belgium would support the G7 and EU sanctions aimed at limiting Russia's revenues from the diamond trade.