PUBLICATION

Russian diamonds and the war in Ukraine 

In this Insight, IPIS provides background and analysis on several aspects of the Russian diamond sector, what links it has to Russia’s invasion of Ukraine, and how the international business and political community is seeking an adequate response to the challenges this raises.  

The Russian invasion of Ukraine, that started on 24 February 2022, has led to international outrage. Russia’s targeting of civilians and civilian infrastructure, causing widespread loss of live, human suffering and the destruction of schools, hospitals and residential areas, was condemned by 141 United Nations (UN) member states in a March 2 General Assembly Resolution. This outrage has led to an unprecedented wave of economic and financial sanctions designed to hurt Russia’s economy and drain the resources of the Russian regime. 

Against this background, the importance of Russia in the global diamond sector, more specifically of its diamond mining giant Alrosa, has been drawing increased attention with governments, businesses and industry associations reacting in diverging and constantly shifting ways. Combined with the complex and closed nature of this international industry, this has made it difficult to get and keep a clear picture of how the diamond and jewelry industry is affected by and responding to this matter. 

This report starts with a brief presentation of what kind of actor Alrosa is, followed by its responsible sourcing track record. The report subsequently analyses the various direct and indirect linkages between the Russian diamond sector and the invasion of Ukraine. The state of affairs with regard to the governmental and corporate response to this situation is presented in the following two sections. This IPIS Insight ends with an analysis of how this crisis will considerably impact the Kimberley Process, the international conflict diamond certification scheme, even though this body is unlikely to take any action on the matter.

In the past weeks, IPIS provided background information to several newspapers

Bellow is a selection of some recent articles:

Belgium braces for Zelenskyy’s fury over Russian diamonds | 29 March 2022 | Politico

Diamonds are not Belgium’s best friend. In fact, the precious stones are putting the country in line for a tongue-lashing from Ukrainian President Volodymyr Zelenskyy…

Jewellery industry accused of silence over Russian diamonds | 19 March 2022 | The Guardian

In the photographs, Vladimir Putin stands with a faint smile on his face. Behind him, the enormous cavern of a mine stretches out, the earth ringed red and ochre. In other photographs from his visit to the Siberian mining city of Mirny, the Russian president is pictured meeting local miners and inspecting one of the dark stones they cut from the earth…

From Russia with diamonds: How Antwerp has evaded sanctions so far | 31 March 2022 | RTE

Starving the Russian state of the revenues it needs to pursue the invasion of Ukraine has focused mostly on oil and gas. However, there is another Siberian resource which is coming under scrutiny and is currently embarrassing the Belgian government: Diamonds…

How Russia’s diamonds can avoid U.S. sanctions | 24 March 2022 | Greenwire

Officially speaking, it’s now verboten to import Russian diamonds into the United States. But even with sanctions imposed after Russia’s invasion of Ukraine, diamonds from Russia are certainly for sale in jewelry stores across this country — and likely will be for some time…

Russia’s invasion of Ukraine has befuddled the Kimberley Process | 22 March 2022 | JCK

For a group comprising more than 80 countries, the Kimberley Process (KP) has generally operated apart from global politics…That’s not true anymore. Following Russia’s invasion of Ukraine, international politics has poked its dysfunctional nose into the KP’s already-dysfunctional tent…

Een geslepen lobby: hoe een Russische diamant-oligarch zaken kan blijven doen | 19 March 2022 | De Morgen

Hoewel Rusland hofleverancier is van de diamanthandel in Europa, blijft de sector gespaard van Europese sancties. Waarom kan oligarch Sergej Ivanov verder doen vanuit Antwerpen, terwijl Biden hem wel viseert?

Sanctions on Russia affecting diamond trade in the Belgian city of Antwerp | 30 March 2022 | France24

FRANCE 24’s Alix Le Bourdon and Dave Keating report on how the sanctions on Russia are affecting the diamond trade in the Belgian city of Antwerp.

Russische diamanten in Antwerpen | 11 April 2022 | Terzake (VRT)

Al sinds de Russische inval in Oekraïne zijn de Russische diamanten die naar Antwerpen geëxporteerd worden onderwerp van debat. Volodimir Zelenski vroeg het Belgisch parlement twee weken geleden nog om die import te stoppen en zo de Russische oorlog niet te financieren. Verschillende regeringspartijen zijn voor een boycot, maar ondertussen worden nog steeds diamanten geïmporteerd naar de Antwerpse diamantwijk. Heeft een boycot zin? En wat zouden de gevolgen voor ons land en de economie zijn?

Ukraine seeks $50 billion from the G7 | 17 April 2022 | BBC World Business Report

Ukraine is asking the G7 for $50 billion to plug a huge hole in its war torn economy. It comes as countries continue to enforce sanctions on Russia as the conflict in Ukraine continues, but several industries have so far avoided efforts to close them down. One of the world’s biggest diamond trading centres in the Belgian city of Antwerp is still selling Russian diamonds, marketed by Alrosa, despite pressure to stop. Hans Merket, a researcher who studies links between natural resources and conflict for IPIS, which is coincidentally based in Antwerp, explains how important Alrosa is to the global diamond trade.

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