Diamonds Might Be Forever, But Russian Diamonds Might Be for Never

The G-7 nations are expected to announce a ban on imports of Russian diamonds in the next few weeks, unnamed Belgian officials told Reuters reporters in Brussels Friday.

Russia is one of the world’s largest suppliers of diamonds, exporting about 30% of global supply. Exports were worth about $4.5 billion in 2021, according to the U.S. Department of Treasury, and one company, Alrosa, is responsible for mining about 90% of the country’s diamonds.

As global leaders have looked to punish Russia for launching its war in Ukraine that’s killed or injured a total of about 500,000 soldiers and cut off its funding sources, Western countries have issued sweeping sanctions on Russian companies and business leaders. Those actions have caused the Russian currency to plummet to below 100 rubles to the dollar, and further sanctions imposed by the U.S. Thursday could pinch the country’s economy even further.

Alrosa is already under sanctions by the U.S., UK, Canada, New Zealand and the Bahamas. The Group of Seven nations — Canada, France, Germany, Italy, Japan, the UK and the U.S. — made moves to restrict Russia’s diamond trade in May, and exports of the gems to Europe dropped a whopping 95%, according to Bloomberg. 

But diamonds are notoriously hard to track. The Kimberley Process forum established in 2000 to restrict the trade of “blood diamonds” began a certification process for rough diamonds in 2003, but the gems often go to different countries to be cut and polished. Diamonds can “change hands 20 to 30 times between mine and market,” the BBC previously reported. Diamonds mined in Russia usually go to India to be refined, and the Belgian city of Antwerp is the top global diamond trading hub.

The G-7 is planning a new system to trace the diamonds, according to Bloomberg. The group is planning a restriction on both direct and indirect purchases of Russian diamonds, the outlet reported. The move was proposed by Belgium, according to Reuters. The direct ban would begin on Jan. 1, while the indirect ban would be implemented more slowly, Bloomberg reported. 

“With this system, we are cutting them out, leaving them in an inferior market with lower prices. We are slashing the financial flows from this sector,” a Belgian official told Reuters.