"Russian diamonds are not eternal," European Council President Charles Michel quipped. 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 embargo on diamonds is under discussion, a major economic issue that had hitherto been spared by international sanctions.
Westerners united on the issue
After several months of dithering on the issue, the G7 has displayed a common position in Japan: Washington's announcements on a new sanctions package have pushed other countries to follow suit, led by London. The UK has unveiled new measures targeting Russia's mining sector, including imports of aluminum, diamonds, copper and nickel, in a bid to restrict Moscow's ability to finance the war.
The sanctions show that "the G7 remains united in the face of the threat from Russia and firm in its support for Ukraine," British Prime Minister Rishi Sunak said.
On the European side too, we are aligning, as Charles Michel announced. For many months, Belgium, which imports and exports €12 billion worth of diamonds each year, remained the main opponent within the EU of sanctions against Russian diamonds since the beginning of the war. The Antwerp World Diamond Centre, the federation of the Belgian diamond sector, feared that this would cut 30% of its activity, recalls Reuters.
But at the end of April, Belgian MPs voted on a resolution advocating a ban on Russian diamond imports 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 package of sanctions," said Green MP Samuel Cogolati.
A sector that brings nearly 5 billion a year to Moscow
Why target the mining trade and especially diamonds? Because it is an ultra-prolific sector for Moscow: according to the Observatory of Economic Complexity, a data visualization site on international trade created by the Massachusetts Institute of Technology (MIT), Russia exported $ 4.7 billion (4.35 billion euros) of diamonds in 2021, making it the 8th largest exporter in the world. To turn off the ore tap is to hit a colossal source of revenue for Moscow.
The company Alrosa, 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 lines of fire. The main trading partner of Antwerp's diamond industry, it guarantees the influx of a quarter of all rough diamond imports into Antwerp each year, notes the American radio NPR.
India's accession needed
The United Arab Emirates, India and Belgium make up the top three diamond exporters. An EU official said on Thursday on condition of anonymity that India's adherence to the process would be essential to ensure the impact of any sanctions regime in this area.
Indeed, about 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 fulfill 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 dialogue with them, because the diamond industry is very important in India, not necessarily in terms of numbers, but in terms of policy and symbol," said a European official, still on condition of anonymity. India also has 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 G7 members with Indian Prime Minister Narendra Modi, invited to the summit, as well as Ukrainian President Volodymyr Zelensky who confirmed his presence in the coming hours.
