The European Union announces a formal ban on imports of Russian diamonds in December 2023.
Context
On December 18, 2023, the European Union announced a formal ban on member states’ imports of diamonds from Russia. The implementation of the ban, which included both natural and synthetic diamonds, was to come in three stages: an initial ban on direct imports from January 1, 2024, and a ban on indirect imports of Russian diamonds processed in third countries from March 1, 2024, to be fully implemented by September 1, 2024. Minor exemptions applied only to diamonds intended for industrial purposes. On January 3, 2024, it was further reported that the European Union had specifically targeted diamond market-leading Russian firm Alrosa (and its CEO, Pavel Marinychev with a travel ban and an assets freeze) which the European Union said “constitutes an important part of an economic sector that is providing substantial revenue” for the Russian economy. Alrosa’s main shareholders reportedly include Russia’s federal and provincial governments.
This was part of the 12th round of economic measures announced by the European Union following Russia’s invasion of Ukraine in 2022. A quote attributed to the European Union’s Josep Borrel, High Representative for Foreign Affairs and Security Policy, asserted that “[w]ith this 12th package, we (the European Union) are putting forward a robust set of new listings and economic measures which will further weaken Russia’s war machine. Our message is clear. . . we remain steadfast in our commitment to Ukraine and will continue to support its fight for freedom and sovereignty.” The move against Russia’s diamond industry was part of a larger coordinated G7 campaign to target this industry with sanctions.
Impact
At the time this measure was announced, the European Union reportedly estimated the diamond industry to be worth approximately US$4.5 billion per year to the Russian economy. Belgium had reportedly previously been reluctant to agree to the ban, due to the potential impact on its Antwerp diamond trading hub. Some reports have suggested thatDubai has benefited from this ban, because it offers an alternative route to Antwerp.
Responses
i) Russian Industry Responses
According to Russian state media, the largest diamond firm targeted by this measure, Alrosa (which produces 95% of Russia’s diamonds) did not provide immediate comment on this ban.
ii) Russian Government Responses
Russia’s Deputy Minister of Finance, Minister Alexey Moiseev, described Russian diamonds as being ‘cancelled’ for political reasons:
“the [Russian diamond] industry attempts to enter a sustainable development trajectory amid a difficult macroeconomic situation can be completely undermined by the destructive “sanctions” policy of the United States and its allies in the Group of Seven (G7) against the Russian diamond industry – the key factor in the strong development of the global diamond trade over the past 10 years – due to American geopolitical attitudes. In pursuit of “cancelling” of Russian diamonds, which account for a third of the world’s production, as part of the overall goal of inflicting economic damage on Russia and subordinating it to their ideas about how the world should be organized, the collective West can eventually “cancel” the entire global diamond industry, causing irreparable damage to it.”
Russian government spokesperson, Dmitry Peskov, was cited in Russian state media as saying that “Russia has been long prepared for restrictions on its diamond industry and has tools to circumvent them” which included redirecting diamond exports to alternative markets such as China and India. Consequently, Peskov told reporters that “[o]n the whole, the 12th package shows that, perhaps, the pool of sectors where sanctions can be imposed is being exhausted.” In September 2024, Russian President Vladimir Putin threatened to impose retaliatory sanctions on Western states, partly in response to this measure.
(iii) European Union Responses
In June 2024, the European Union delayed full implementation of the ban until March 1, 2025 – citing the need for additional time to implement a traceability program to manage the ban. This delay reportedly followed lobbying and discussions with industry stakeholders including the Antwerp World Diamond Centre (AWDC) and the De Beers Group.Following the announcement of this delay, the AWDC told press that “[w]e are extremely pleased that, after months of intense negotiations, we have succeeded in pushing the needle to allow regularisation of so-called grandfathered stock(diamonds produced in Russia in the past)… Sanctioning these goods and prohibiting their trade would impose an unfair and severe financial burden on diamond companies without significantly impacting Russia’s revenues.”
Status
At time of writing (September 2024) this measure is currently awaiting a full implementation date of March 1, 2025. It is unclear if Russia will follow through on recent threats to implement its own retaliatory sanctions.
References & Further Information
AFP. 2023. “Kremlin Says Russia Will Circumvent EU Diamond Import Ban.” The Moscow Times. December 19. Available at: https://www.themoscowtimes.com/2023/ 12/19/kremlin-says-russia-will-circumvent-eu-diamond-import-ban-a83476
AP News. 2024. “EU targets world’s biggest diamond miner as part of Russia war sanctions.” AP News. January 3. Available at: https://apnews.com/article/eu-russia-ukraine-sanctions-diamonds-72528753e5ed242e4662ff4999ea613f
Aris, B. 2024. “Sanctions on Russian diamonds see traders flee Antwerp for Dubai.” BNE Intelligence. March 28. Available at: https://www.intellinews.com/sanctions-on-russian-diamonds-see-traders-flee-antwerp-for-dubai-318702/
Associated Press. 2023. “The European Union targets Russian diamond industry in latest round of Ukraine war sanctions.” PBS. December 18. Available at: https://www.pbs.org/newshour/politics/the-european-union-targets-russian-diamond-industry-in-latest-round-of-ukraine-war-sanctions
Bryanski, G., D. Korsunskaya and G. Stolyarov. 2024. “Putin’s commodities ban threat puzzles Russian firms and officials.” Reuters. September 14. Available at:
Council of the EU. 2023. “Russia’s war of aggression against Ukraine: EU adopts 12th package of economic and individual sanctions.” Press Relase, European Council, Council of the European Union. December 18. Available at: https://www.consilium. europa.eu/en/press/press-releases/2023/12/18/russia-s-war-of-aggression-against-ukraine-eu-adopts-12th-package-of-economic-and-individual-sanctions/
European Commission. 2023. “EU adopts 12th package of sanctions against Russia for its continued illegal war against Ukraine.” European Commission. December 18. Available at:https://ec.europa.eu/commission/presscorner/detail/%20nl/ip_23_6566
Freedman, J. 2024a. “EU to Exempt Pre-2024 Diamonds from Russia Sanctions – Report.” Rapaport. May 12. Available at: https://rapaport.com/news/eu-to-exempt-pre-2024-diamonds-from-russia-sanctions-report/
Freedman, J. 2024b. “EU Adds Key Exemptions to Russian Diamond Sanctions.” Rapaport. June 24. Available at: https://rapaport.com/news/eu-adds-key-exemptions-to-russian-diamond-sanctions/
Kyiv Post. 2023. “European Council Targets Russian Diamonds and More in New Round of Sanctions.” Kyiv Post. December 18. Available at: https://www.kyivpost.com/ post/25656
Liboreiro, J. 2023. “EU agrees new sanctions on Russia, with an import ban on diamonds.” Euro News. Available at: https://www.euronews.com/my-europe/2023/12/18/eu-agrees-new-sanctions-on-russia-with-an-import-ban-on-diamonds
Ord, S. 2024a. “De Beers requests changes to diamond sanctions timeline.” Jeweller. June 11. Available at: https://www.jewellermagazine.com/Article/13126/De-Beers-requests-changes-to-diamond-sanctions-timeline
Ord, S. 2024b. “European Union delays sanctions against Russian diamonds.” Jeweller. June 27. Available at: https://www.jewellermagazine.com/Article/13201/European-Union-delays-sanctions-against-Russian-diamonds
Restelica, B. 2024. “EU Targets Russia’s Leading Diamond Producer in New Sanctions.” Schengen News. January 4. Available at: https://schengen.news/eu-targets-russias-leading-diamond-producer-in-new-sanctions/
Russia Today. 2023. “Diamond industry takes radical steps to stem price decline – Bloomberg.” Russia Today. November 2023. Available at: https://www.rt.com/business/587099-diamond-industry-steps-plunge-prices/
Russia Today. 2024. “EU sanctions Europe’s top diamond producer.” Russia Today. January 3. Available at: https://www.rt.com/business/590067-eu-sanctions-russia-alrosa/