Ian Smillie, a frontrunner within the marketing campaign to finish blood diamonds, is the creator of Blood on the Stone: Greed Corruption and Conflict within the International Diamond Commerce and Diamonds.
The more and more robust financial sanctions positioned on Russia and its oligarchs are designed to ship highly effective messages to President Vladimir Putin in regards to the barbaric invasion of Ukraine. However one space has to this point escaped severe consideration: the Russian diamond commerce.
Russia is one the world’s largest producers of tough diamonds. Most are exported, incomes Russia about US$3-billion yearly within the overseas alternate that’s changing into scarcer as sanctions begin to chew. Greater than 90 per cent of its diamonds are mined and exported by Alrosa, a publicly traded firm that’s one-third owned by the Russian authorities. Russian oligarchs are additionally closely concerned, together with its CEO, Sergei Sergeyevich Ivanov, whose father is a everlasting member of the Safety Council of the Russian Federation and an in depth ally of Mr. Putin.
Alrosa has already caught the eye of the White Home, which on Feb. 24 positioned restrictions on its capability to boost cash in the USA and imposed journey restrictions on its CEO. This can be a very small first step. The following step needs to be to focus on Antwerp, the place 80 per cent of the world’s tough diamonds, together with these of Alrosa, are traded. The Alrosa workplace there needs to be closed, and Antwerp’s public sale and bourse services denied. The 61 firms which have buying contracts with Alrosa by way of 2024 needs to be pressed to droop or cancel them.
Diamonds are invaluable and they’re small. They’re, in a way, like water, with a singular capability to search out their manner by way of cracks to locations of least resistance. To be efficient, an embargo in Antwerp would require an embargo in Dubai, an up-and-coming diamond hub, and lesser buying and selling centres in Israel and New York.
After Antwerp is India, which imports US$10-billion value of tough diamonds yearly for its huge chopping and sprucing trade. India, apparently no good friend of Ukraine, produces 70 per cent of the world’s polished diamonds. Alrosa has already assured India of a gentle provide of diamonds and India is about to revive its rupee-ruble commerce preparations, bypassing SWIFT banking restrictions, because it has up to now. India should be persuaded to hitch the embargo and to show that none of its diamond exports have began their journey in Russia.
India should assure that it’s not sprucing and re-exporting Russian diamonds, in any other case an embargo on its diamonds would develop into important. The USA, the place half of the world’s gem diamonds are bought, might start by invoking CAATSA (Countering America’s Adversaries By means of Sanctions Act).
There’s additionally Angola, which mines and exports US$1-billion yearly in tough diamonds. Alrosa owns a couple of third of the nation’s Catoca operation and can also be a significant investor within the new Luaxe mine, tapping one of many largest diamond deposits on earth. Alrosa’s entry to Angolan diamonds and their proceeds should be halted as a part of a common embargo, and up to date offers in Zimbabwe and the Democratic Republic of Congo must also be suspended.
As well as, Alrosa needs to be suspended from worldwide our bodies involved with good practices within the diamond trade: the World Diamond Council, the Accountable Jewelry Council and the Kimberley Course of.
In taking such measures, the fallout should be thought of. Giant elements of the worldwide diamond buying and selling and sprucing enterprise can be negatively affected and Alrosa would nearly actually search loopholes in locations like China, one other nation whose ambivalence towards Ukraine has been demonstrated. However China’s capability for an Alrosa bailout is proscribed, and as with India, a Western embargo may very well be utilized to unidentified Chinese language items.
Diamonds have lengthy been symbols of affection, magnificence and dedication. Nothing may very well be extra apt than a world embargo on these from a supply that promotes the other. The purpose is to hit exhausting and rapidly with a message that may be heard and felt within the Kremlin, not solely by Mr. Putin however by these round him who profit from Russia’s commerce with the West.
Diamonds, as they are saying, are without end, and when Russia has come to its senses, the glittering showrooms of London, Paris and New York will be opened to them as soon as once more.
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