Beautiful Virgin Islands

Sunday, May 11, 2025

Will a Russian diamond ban be effective?

Will a Russian diamond ban be effective?

The UK has announced a ban on Russian diamonds as it tightens sanctions over Russia's war in Ukraine.

Countries in the G7 bloc also want to be able to trace the gemstones to block Russian exports as they try to limit cash flowing into Russia's war chest.

But how effective will these schemes be, and could there be unintended consequences?


How important are Russian diamond exports?


Russia's diamond trade, worth about $4bn (£3.2bn) per year, makes up a small proportion of its overall exports.

Before the invasion of Ukraine, Russia's total exports reached $489.8bn in 2021, according to the central bank, with oil and gas making up $240.7bn of that.

Nevertheless, Russia is the world's biggest diamond exporter by volume, followed by African countries.

A state-owned company called Alrosa dominates Russian diamond mining - and it mined almost a third of the world's diamonds in 2021.

Profits from Alrosa do flow into the Kremlin war chest, according to Hans Merket, a researcher with the International Peace Information Service - but it is nowhere near as important as oil and gas.



Why does the G7 want to track Russian diamonds?


Western countries want to cut off this revenue stream as part of efforts to hamper Russia's war.

However, the world's diamond trade is complex, and lacks transparency.

Diamonds can change hands 20 to 30 times between mine and market, Mr Merket said.

Typically the gemstones pass through the main global hubs of Antwerp, Dubai, Mumbai and Ramat Gan, which is near Tel Aviv.

Traders grade the stones for carat (weight), colour, clarity and cut - with different traders looking for different attributes.

They then take the remaining gemstones, mix them up, and sell them on - and the process is repeated.

Traders and firms jealously guard where they source their diamonds - it's their "secret sauce", according to Tobias Kormind, managing director of online jeweller 77 Diamonds.

But the major industry players could restrict the trade of Russian diamonds if they pulled together, he said.


How could the flow of Russian diamonds be restricted?


The US has already brought in sanctions to try to ban Russian diamond exports.

However, there is a "massive loophole" here, Mr Kormind said.

The restrictions apply to rough diamonds - but once they have been cut and polished, the country of origin no longer matters.

People in G7 countries buy about 70% of the world's diamonds - so a G7 ban could have an effect, if the diamonds can be traced, Mr Merket said.

However, a G7 ban would mean diamonds are likely to flow to other markets in China and India, Mr Kormind said.

Tracing the diamonds would make restricting that flow easier.


How could diamonds be traced?


There is already a scheme to try to restrict "blood diamonds" used to fuel conflict, called the Kimberley Process, where states certify that diamonds are "conflict free".

However, this does not allow the diamonds to be traced to the country of origin.

Mr Merket said the simplest way of tracing diamonds would be to extend this process to include documentation of where the stones come from.

There are also technologies that mark stones, and one is being developed that can scan them to check their geographical origin.


What effects would a ban have?


The majority of Russian diamonds end up in India, where there is a major cutting and polishing centre in Surat.

Smaller diamond businesses in the city have already suffered, in part due to the US ban.

In Africa, local mining operations benefitted after US sanctions hit Russian exports. However, many African mining producers are not ready to feed into a traceability scheme, Mr Merket said, and could be excluded if one is brought in.

In Angola, Russia's Alrosa has a significant stake in mining, and tightening sanctions could hit local firms.

For Europe, traceability needs to be "watertight, scientific, [and] international", said Tom Neys, head of media relations at the Antwerp World Diamond Centre.

If not, Europe risks losing $40bn in trade annually to places that don't have the frameworks to deal with money laundering and terrorism, he said.

He added that UK sanctions "will have no impact on the sale of Russian diamonds" because the UK represents less than 1% of the global diamond trade.

A UK government spokesperson said it would work with key partners to help restrict the Russian diamond trade, "including through tracing technologies".

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Cardinal Robert Prevost Elected as Pope Leo XIV, Marking a Historic Papacy
Newark Mayor Ras Baraka Arrested at ICE Facility Amid Congressional Visit
India-Pakistan conflict may be first test for Chinese military tech
Bill Gates Announces Plan to Wind Down Philanthropic Foundation and Disperse Wealth
Historic Papal Conclave Set to Commence in Rome
Huge Copper, Gold, and Silver Discovery in Argentina and Chile — But the Profits Go Abroad
Prince Harry is pleading for reconciliation — but the royals are just as sick of his victimhood as everyone else
The Road to Freedom: She Protested Putin, Escaped House Arrest, and Survived a 2,800-Kilometer Journey
OpenAI's Flip-Flop: No Longer Going Commercial, Back to Nonprofit, After Musk Lawsuit and Backlash
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
First From China: Zhao Xintong Wins the Snooker World Championship
Nvidia Faces Billion-Dollar Losses – Warns: China Is on Its Way to Becoming an AI Superpower
Trump Rules Out Third Term, Names JD Vance and Marco Rubio as Potential Successors
Mexico Says ‘No’ to U.S. Troops: President Sheinbaum Rejects Trump’s Offer to Fight Cartels
Nigel Farage’s Reform UK Storms the Map, Wrecking the Two-Party Monopoly
DOGE: Reimagining Government Operations with AI
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
U.K. Court Rejects Prince Harry’s Final Appeal Over Police Security
Prince Harry’s Heartfelt Outburst Rocks the Royal Family
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Transgender Swimmer Secures Five Gold Medals at U.S. Masters Championship
Prince Harry: “I Want Reconciliation with My Family”
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Reform UK Surprises in British Elections, Challenging Traditional Two-Party System
180-Year-Old Christian University in South Carolina Announces Closure Due to Unmet $6 Million Fundraising Goal
Brazilian Woman Jailed for Fourteen Years for Writing “You Lost, Idiot” on Statue During Protest
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
Dutch Politician Eva Vlaardingerbroek Receives Spyware Threat Alert from Apple
Paramount Board Considers Settlement in Trump’s $20 Billion Lawsuit Over "60 Minutes" Interview
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
Deadline Looms for RTS Meter Replacement: Hundreds of Thousands at Risk of Heating Disruption
Sweden Grapples with Deadly Gun Violence: Suspect Arrested After Three Young Men Killed in Uppsala Hair Salon
Walz Reveals Why Harris Chose Him as Her Running Mate and Reflects on Democratic Losses
Spain Restores Power After Unprecedented Nationwide Blackout
Carney Secures Liberal Mandate in Canada’s Federal Election
Death Penalty Sought as Luigi Manion Pleads Not Guilty in CEO Murder Case
President Trump contacts Jeff Bezos after reports of Amazon considering listing tariff surcharges; company clarifies no such plan for main platform
Spain and Portugal Recover from Massive Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
Singapore Politicians Warn Against Foreign Interference in Election
Driver Ploughs into Vancouver Festival Crowd, Killing Nine
Depression, Fear of Defamation, and a Tragic End: New Details on Virginia Giuffre’s Suicide
“Sharia for UK, Allah Akbar!”
Massive Explosion at Iran's Bandar Abbas Port Linked to Suspicious Chemical Shipments
Incident Reflection: A Harsh Reality Check
×