Western countries are working on plans to hit Russia’s diamond exports with sanctions and are hoping to seal a deal as soon as May, according to officials from European states involved in the talks.
The European Union has repeatedly debated banning imports of Russian diamonds over the past year — but held off amid fears this would only divert trade away from the Belgian city of Antwerp, a global diamond hub, without actually harming Vladimir Putin’s war finances.
For months, the Belgians have lobbied the European Commission and the G7 on an alternative to a ban: an international system for tracing diamonds. This would potentially stop sanctioned Russian stones being traded elsewhere in the world, addressing the Belgian concerns and paving the way for an international ban on sales.
The proposal resulted in a commitment from G7 leaders on February 24 to “work collectively on further measures on Russian diamonds, including rough and polished ones.” There are no concrete proposals from the G7 on timing for when the next steps will be taken. But the summit of G7 leaders in Japan in May is being seen as a potentially good target for landing a deal.
A spokesperson for the U.S. mission to the EU said the Americans will be working “in the coming months with G7 partners to take concrete steps.” The spokesperson added that “industry is already developing and implementing a number of approaches and programs that will enable compliance with an eventual restriction.”
Imports of Russian diamonds have gone down since the beginning of the war — apart from a temporary spike which seemed to be linked to Valentine’s Day. Last month, Belgium imported Russian diamonds worth €61 million. Before the war, Russian diamonds amounted to about 25 percent of diamonds coming into Antwerp.
For staunch Ukraine supporters such as Poland, restrictions can’t come soon enough. Asked whether Poland would be happy with sanctions being adopted at G7 level in May, Poland’s ambassador to the EU Andrzej Sadoś said “absolutely.”
“Of course we want more and we want faster, but — always — the third element is unity,” Sadoś said, adding that maintaining agreement about how to target Russia among the EU’s 27 member countries is vital. “This is the value, this is the strength.”
Traceable and waterproof
The timing also depends on how ambitious the new system will be.
The main goal is to stop sanctions being circumvented, for example by importing Russian diamonds which have first been processed and relabelled elsewhere in the world. An EU official said this would only be effective with “a coordinated G7 approach.”
The Belgian diamond sector agrees. “With controlled access to 70 percent of the market, the G7 has the power to create a fully traceable and waterproof system that has real impact on the market,” said Tom Neys, a spokesperson for the Antwerp World Diamond Centre, adding that the Antwerp diamond industry supports the effort.
Neys added the participation of India will be key in the enforcement of a watertight system, accusing India of selling Russian diamonds as Indian diamonds on the American market. A G7 statement said the group will be working “closely to engage key partners” on diamond measures.
A potential next step is to implement a traceability system for all diamonds — not just goods from Russia — that enter the G7, and even other markets. But this is likely to be a lower priority, because moving quickly against Moscow’s exports is the more urgent task, another European official argued. “No one wants to let this drag on for another year.”
Once there is an agreement among the G7, the EU will follow the U.S. in banning the import of Russian diamonds, the official said.
Rattle your jewelry
For the Belgians, a G7 crackdown would be a major victory.
For generations, Antwerp has served as the main hub for diamonds arriving in Europe. Since the start of the full-scale Russian invasion of Ukraine a year ago, the city’s diamond industry has warned an EU import ban on Russian diamonds would be an economic blow for Belgium and simply divert trade toward India and the United Arab Emirates.
Rough Russian diamonds account for around 30 percent of the global diamond trade.
With an international traceability plan, allied to an import ban, the Belgians can keep their own diamond industry alive while positioning themselves as world leaders in transparent and ethical trade.
“I am very pleased that the G7 is putting its weight behind this issue,” Belgian Prime Minister Alexander De Croo said in a statement to POLITICO.
“The traceability approach is the right one: it will increase consumer confidence in the sector by ensuring that conflict diamonds will no longer be available in our shops. Belgium and its diamond industry will bring the necessary expertise to the table to make the Russian shop ban happen as soon as possible.”
But critics, including in his own government, argue the current approach is too slow. Within De Croo’s seven-party coalition, the greens and the socialists have been pushing him to move faster.
Belgian MEP Kathleen Van Brempt, who is from the city of Antwerp, said G7 cooperation on traceability is positive, but stressed that much will depend on enforcement. The G7 discussion is “not a reason to postpone the inclusion of diamonds in European sanctions,” she said.
Leonie Kijewski contributed reporting.