EU Expands Sanctions to Include World's Largest Diamond Producer Alrosa Over Russia's Actions

The European Union (EU) has extended its sanctions against Russia, adding Alrosa, the world's largest diamond producer, and its CEO Pavel Alekseevich Marinychev to its list of sanctions. This move is part of the EU's import bans imposed in response to Moscow's actions in the war on Ukraine. Josep Borrell, the EU's foreign policy chief, announced the decision, stating, "In line with the diamond ban we have introduced with the 12th package of sanctions, the EU today lists Alrosa, the largest diamond-mining company in the world, and its CEO." Both Alrosa and its CEO will face visa bans and asset freezes within the EU.

Alrosa, responsible for 90% of Russia's diamond production, has been targeted by the EU due to its significant role in an economic sector that contributes substantial revenue to the Russian government. The EU's diamond ban, which came into effect on January 1, prohibits the export of natural and synthetic diamonds from Russia. The ban, coordinated with the G7, is part of the EU's efforts to tighten sanctions, limiting revenue that could fund the Kremlin's military activities.

The EU plans to phase in a prohibition on Russian diamonds processed in third countries by September. The decision to implement the ban followed extensive negotiations between EU member states and G7 countries, focusing on establishing a system to trace Russian diamonds. Originating certificates issued under the Kimberley Process, designed to prevent the sale of conflict diamonds, determine a diamond's origin at the beginning of the supply chain. Despite this, tracking the stones can become challenging afterward.

The diamond industry, anticipating the decision, engaged in lobbying efforts with G7 decision-makers, expressing concerns about the ban's practicality and potential negative impacts on the global diamond trade. Belgium, home to the world's largest diamond trading hub in Antwerp, emphasized the necessity of an effective system to make the embargo successful. Antwerp has faced a decline in influence compared to rival hubs in India and the United Arab Emirates in recent years.

By fLEXI tEAM