US Closes Loophole in Russian Diamond Sanctions
February 12, 24
(IDEX Online) - The US says it will close the loophole that has allowed the importation of Russian diamonds that have been "substantially transformed" in another country.
The Treasury Department's Office of Foreign Assets Control (OFAC) has announced that it will outlaw rough diamonds of 1.0-ct or above from 1 March, and those weighing 0.5-cts of more from 1 September.
In a statement on 8 February the department said sanctions will now apply to "diamonds that were mined, extracted, produced, or manufactured wholly or in part in the Russian Federation, notwithstanding whether such diamonds have been substantially transformed into other products outside of the Russian Federation."
The US imposed sanctions on Russian diamonds in the weeks after Ukraine was invaded, almost two years ago. But with well over 90 per cent of the world's diamonds cut and polished in India, the restrictions proved largely ineffective.
Alrosa, Russia's state-controlled miner reported first half sales last year ($1.9bn) were slightly increased, despite attempts to prevent it funding the war through diamond revenue.
The US move brings it into line with other G7 countries, which imposed sanctions on Russian diamonds from 1 January.
Pic shows US Treasury Department.