Brussels/London, May 20, 2024 – The United States is calling into question the toughest elements of the G7 ban on Russian diamonds, creating tension among Western allies. According to multiple sources, Washington is hesitant to fully support diamond tracking, risking to render the sanctions ineffective and frustrating proponents of a hard-line approach.
The G7 ban on Russian diamonds, approved in December 2023, represents one of the most significant interventions in the diamond industry in decades. It aims to target Russia’s revenue from the war in Ukraine, even though diamonds account for only a small portion of Russia’s energy profits.
A key component of the ban is a traceability system that requires diamonds over 0.5 carats to undergo certification in Antwerp, Belgium’s diamond trading hub, starting in September 2024. However, according to available information, the US has cooled on enforcing this requirement and discussions about its implementation have stalled.
Without US engagement, Russian diamond sanctions will be ineffective.
The US stance is raising concerns among sanctions advocates, who argue that without a strong traceability mechanism and full US commitment (the US represents 50% of the G7 diamond jewelry market), the ban will be ineffective. They criticize the influence of the diamond industry, which fears greater market transparency.
Relaxing the ban could open loopholes and allow Russian diamonds to flow into markets in New York, London, and Tokyo. This would threaten the effectiveness of the sanctions and undermine efforts to isolate Russia.
Talks about the future of the diamond ban are ongoing, with Belgium remaining a strong advocate for strict controls and seeking compromises that would satisfy all parties.
Source: Reuters
