The EU has not included the import of diamonds from Russia in the sanctions. In 2021, the country exported over 48.6 million carats of rough diamonds abroad.
We are in front of a shop window in the Belgian city of Antwerp. The shop owner places diamonds on velvet. The Belgian port has been one of the key trading cities with precious stones since the 15th century. Discreetly and confidentially, according to the Antwerp World Diamond Center, the trade turnover from the precious stone amounts to 37 billion euros every year. When asked where the diamonds come from, the jeweler replies with a smile: “I prefer not to ask.” His reluctance has some basis. Rough diamonds come from Angola, Congo, Sierra Leone, South Africa and also from Russia, as explained by Sigal Wajowski, owner of Binson Diamonds in Antwerp. Transported to factories in Belgium to be polished, they are then made into jewelery and sold, including in her shop.
Which side is Belgium on?
This is a very niche market for luxury tastes, with billions in sales, which Russia, despite the war in Ukraine, continues to profit from. Since the start of the war, the EU has imposed numerous sanctions on Moscow. For example, the import of certain goods such as gold, vodka and caviar has been stopped, but Russian diamonds have been spared for some reason. According to the Russian Finance Ministry, in 2021 Russia exported more than 48.6 million carats of rough diamonds abroad – the highest volume since the start of the observation period in 2007. The turnover has not been quantified. The most important export destinations: The United Arab Emirates and Belgium. So Belgium, the country where the EU is based, plays a key role in the diamond industry and even lobbied in the negotiations to keep Russian diamonds out of the measures. “Economically, Europe will hurt itself with the sanctions,” says Koen Vandenbebt, dean of the University of Antwerp’s School of Economics.
In case of interruption of imports of Russian rough diamonds, an entire industry will be lost and it will be moved to Dubai or Mumbai — places that place far less emphasis on transparency or sustainability than Antwerp,” he says. “Because many countries, such as India, Israel or the United Arab Emirates, did not participate in the sanctions, Russian gems have finally found their way onto the world market,” explains Joachim Dinkelmann from the German Association of Jewelers and Watch Shops (BJV). “Any tightening of regulations or laws against Russia would not affect that at all.” However, the Kremlin is likely benefiting from the diamond frenzy. One of the biggest producers is the Russian diamond giant Alrosa, which it claims is “partially” state-owned. Experts estimate the state’s stake at around 33%. Alrosa accounts for 95% of Russia’s diamond production – about 27% of the world’s. This means that at least one in four gems on markets around the world comes from Russia. The giant operates several mines in the Republic of Sakha, in northeastern Russia , and Arkhangelsk, in the northwest, while it also has interests in mines abroad, such as in Angola.
How Russian diamonds are after all
In contrast to Fadenbebt, commodities expert Larissa Stancio points out that a ban on the import of Russian rough diamonds would mean that less money flows in to state funds through Alrosa. “This would have both direct and indirect effects on the war support budget, although the income from the diamond trade is significantly less than the income from the gas and oil trade.” Alrosa CEO Sergey Ivanov is also no stranger. He was among the first oligarchs from Putin’s circle to be sanctioned by the US. While the EU hesitates, the US government already imposed and subsequently tightened sanctions on Alrosa shortly after the outbreak of war. “I always get a little cynical about it,” says Fadenbebt, noting critically that Europeans are naïve when they think Americans are doing something that hurts their own economy. According to him, jewelry sales in the US make up 50% of the world market. There is also a loophole in the US sanctions regulation thanks to wording that leaves a lot of room for interpretation.
That is, when a diamond is significantly altered in another country through processing, it can claim that country as its place of origin. Consequently, Russian gems polished in India, for example, could continue to be imported into America and hide their origin. “It’s technically almost impossible to determine the country of origin of a gemstone,” says expert Fadenbebt. However, there are certification procedures for rough diamonds, such as the so-called Kimberley Process, which according to customs sources is intended to prevent the importation of so-called “blood” diamonds, that is, those coming from war-torn areas, in the EU. In Germany, according to BVJ CEO Dinkelmann, the industry has a very strong interest in not buying any goods from Russia, “and this includes diamonds in particular.” spring, many suppliers have assured that their gems do not come from Russia. “Neither retailers nor consumers want goods from Russia, and we are doing everything possible to ensure that.”
DW: Louise Evers/ Irini Anastasopoulou
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With a wealth of experience honed over 4+ years in journalism, I bring a seasoned voice to the world of news. Currently, I work as a freelance writer and editor, always seeking new opportunities to tell compelling stories in the field of world news.
