2023-11-16 13:30:45
WORLD – A delegation of G7 experts is meeting this week in Antwerp, the historic cradle of the diamond industry, to discuss tracking and tracing strategies for Russian precious stones.
More than 600 days after the start of the war in Ukraine, the West continues its efforts to hamper the Russian economy. After months of blockade, the European Union is considering banning the import of Russian diamonds, which represent a third of global demand.
To ensure the measure is effective, the EU is seeking the support of the G7, the group of nations made up of Germany, Canada, the United States, France, Italy, Japan and the Kingdom -United. This support is currently under discussion. Brussels is also finalizing its twelfth sanctions pact against Russian entities and individuals, with the intention of including Russian diamonds, at least in a later annex, according to several EU sources.
“To reduce Russia’s export revenues, we will accelerate our consultations on energy, metals and all non-industrial diamonds, including those mined, processed or produced in Russia”said G7 foreign ministers and EU foreign policy chief Josep Borrell in a joint statement issued following their meeting in Japan a few days ago.
However, technical details remain to be worked out to implement the veto on Russian diamonds in Western markets, which represent 70% of global demand for diamond jewelry. The main thing is to know how to trace the stones to know their origin.
Belgium calls for preserving the integrity of the market.
A team of G7 experts will travel to Belgium this week to discuss proposals relating to traceability, to ensure, with supporting documents, that imported precious stones do not come from Russia. The team will meet representatives of the European Commission and will pass through Antwerp, the historic heart of the rough and large diamond trade, where they will meet with companies in the sector.
Within the EU, one of the partners, Belgium, is interested in the diamond trade via the large port of Antwerp. The Belgian government, which initially did not support the proposal, now says it is in favor of banning Russian precious stones, but believes that a traceability system is needed that does not harm the rest of the market. The current system, based on documents certifying the origin of stones, such as the “Kimberley process” (international negotiation forum) guaranteeing the absence of conflict diamonds should then be subject to adjustments.
A few days ago, Belgian Prime Minister Alexander de Croo said that the blockade of Russian diamonds was imminent. However, once the sanctions are approved at the European level, their implementation could still take several months. Belgium is considering this measure for the first quarter of 2024. In order to make the veto operational, the establishment of a highly technological tracking system is therefore crucial. This system must allow the radiography of stones (particularly rough ones and certain sizes) to ensure traceability throughout the chain.
Sanctions loopholes on Russian oil, gas and diamonds
Russian oil and gas are already subject to sanctions by the G7 and the EU. However, these sanctions have exceptions and loopholes that allow the Kremlin to access Western markets.
The United States has already imposed sanctions on Russian diamonds, whether rough or cut and polished in Russia. However, according to experts, Russia would have circumvented the American veto, the world’s largest buyer of diamonds for jewelry, by introducing the gems to the market through other countries, claiming a different origin.
Some of the world’s leading diamond jewelry retailers claim not to have purchased Russian stones since the start of the war in Ukraine. However, according to diplomatic sources, gaps in the original documents persist, allowing these diamonds to be placed on the market. The current objective is to ensure that European measures do not have similar flaws.
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