2023-05-21 05:09:43
“Russian diamonds are not forever,” quipped European Council President Charles Michel. The G7 countries and the European Union unveiled new sanctions against Russia on Friday, on the sidelines of an international meeting of member countries in Hiroshima (Japan). They want to “deprive Russia of G7 technologies, industrial equipment and services that support its war enterprise”, according to a joint statement from member states.
Among the package of measures, a potential diamond embargo is under discussion, a major economic issue that had so far been spared from international sanctions.
Westerners united on the issue
After several months of dithering on the issue, the G7 has posted a common position in Japan: Washington’s announcements on a new sanctions package have prompted other countries to follow suit, with London in the lead. The United Kingdom has indeed unveiled new measures targeting the Russian mining sector, in particular imports of aluminium, diamonds, copper and nickel, with the aim of restricting Moscow’s ability to finance the war.
These sanctions show that “the G7 remains united in the face of the threat from Russia and firm in its support for Ukraine”, declared British Prime Minister Rishi Sunak.
On the European side too, we are aligned, as Charles Michel announced. For many months, Belgium, which imports and exports 12 billion euros worth of diamonds each year, remained the main opponent within the EU to sanctions against Russian diamonds since the start of the war. The Antwerp World Diamond Centre, federation of the Belgian diamond sector, feared in particular that this would cut 30% of its activity, recalls Reuters.
But at the end of April, Belgian MPs voted for a resolution advocating a ban on imports of Russian diamonds into the European Union. “After such a strong signal from the Belgian Parliament, I do not really see how diamonds could be ignored in the eleventh sanctions package”, reacted the ecologist deputy Samuel Cogolati at the time.
A sector that brings in almost 5 billion a year in Moscow
Why target the mining trade and particularly diamonds? Because it is an ultra-prolific sector for Moscow: according to the Observatory of economic complexity, an international trade data visualization site created by the Massachusetts Institute of Technology (MIT), Russia exported 4.7 billion dollars (4.35 billion euros) worth of diamonds in 2021, which in makes it the 8th largest exporter in the world. To cut off the ore tap is to hit a colossal source of income for Moscow.
The Alrosa company, run by a close friend of Vladimir Putin and accused of using its profits to “finance the war in Ukraine”, is one of the main targets. The main trading partner of Antwerp’s diamond industry, it guarantees the influx of a quarter of all imports of rough diamonds into Antwerp each year, notes American radio NPR.
India’s membership needed
The United Arab Emirates, India and Belgium make up the top three diamond exporters. A European official said on condition of anonymity on Thursday that India’s buy-in to the process would be key to ensuring the impact of any sanctions regime in this area.
Indeed, around 95% of the world’s rough diamonds are destined for India. This is where the Russians could then escape the embargo, as Indian manufacturers import stones from mines around the world. They are often mixed to fill an order and thus, Russian rough stones could end up alongside precious stones from Botswana or Canada, notes on NPR Hans Merket, a researcher specializing in the diamond trade.
“We would like to engage in a dialogue with them, because the diamond industry is very important in India, not necessarily in terms of figures, but in terms of policy and symbol”, justified a European official, still on condition of anonymity. . India also maintains close military ties with Russia and has never condemned Moscow’s invasion of Ukraine.
No doubt that this subject will be discussed first during the meeting of the members of the G7 with the Indian Prime Minister Narendra Modi, invited to the summit, just like the Ukrainian President Volodymyr Zelensky who has confirmed his presence in the coming hours. .
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