The Group of Seven (G7) nations will ban direct imports of Russian diamonds starting next year as a punitive measure against Moscow’s invasion of Ukraine.
There will be phased-in restrictions on indirect imports of Russian gems from March, a joint statement on Wednesday after the G7 nations’ meeting said. The measures were announced as Joe Biden and leaders of the G7 countries met Volodymyr Zelensky virtually in a show of solidarity.
The new measures will ensure a ban on non-industrial diamonds from Russia by 1 January and on third-party nations which sell Russian diamonds from March.
The move was being mulled as a part of fresh sanctions by the European Union last month. The G7 will phase in restrictions on indirect imports from a targeted date of March and introduce a “robust traceability-based verification and certification” mechanism for rough diamonds within the G7 by 1 September 2024. The ban excludes diamonds for industrial use.
Russia is the biggest producer of rough diamonds, which are taken from swathes of mines beneath the Siberian permafrost. The trade of precious rock has helped Russia stop from bleeding under economic sanctions after the invasion of Ukraine in February last year.
An employee inspects rough diamonds at Alrosa Diamond Cutting Division in Moscow— (AFP via Getty Images)
For months, the Group of Seven advanced economies and the EU have been working on a way to trace and restrict the trade in Russian diamonds to prevent it from skirting the sanctions. Russia exports about $4bn worth of rough diamonds a year, nearly a third of the world’s total, according to various estimates.
Russia’s Alrosa, the world’s biggest diamond producing company, has not issued a comment so far.
The G7 announcement, however, does not mention tracing of polished stones or the carat size, which can likely help Russia evade the ban. The tracing of polished stones was included in the proposals, including one designed by Belgium on the EU’s behalf.
Diamonds represent an important sector of Belgium. Antwerp has the world’s main diamond hub and most of the world’s rough stones transit through the city even though they are now mostly cut in India.
"I am pleased that the G7 applied the central principles of the Belgian proposal," Belgium’s prime minister Alexander de Croo said.
He added: "The traceability system launched today is another step in the pioneering work Belgium started 25 years ago in the fight against blood diamonds. The G7 declaration offers the Antwerp diamond sector a unique opportunity to further develop into the trading centre of ‘clean’ diamonds."
The meeting of G7 nations also included Mr Zelensky who rallied for continued support from allies.
"Russia believes that America and Europe will show weakness and will not maintain support for Ukraine at the proper level. Putin believes that the free world will not fully enforce its own sanctions," he said, according to remarks posted to the president’s website.
"The free world vitally needs to maintain its consolidation, maintain interaction, maintain support for those whose freedom is being attacked," he said.
There are also plans to tighten controls on Russia’s use of the international financial system and to impose more sanctions to enforce a price cap on Russian oil.
