Important revenue for Moscow
G7 wants to stop Russia’s diamond trade
05/18/2023, 1:35 p.m
Russia is the world’s largest diamond exporter. Trade in gemstones brings Moscow several billions into the state coffers every year. So far, the EU has also stuck to the deal – Belgium in particular is opposed to restrictions. But that should now be the end of it.
The group of leading democratic industrial nations wants to restrict the export of rough diamonds from Russia, which is worth billions. A corresponding declaration is to be decided at the G7 summit in Hiroshima, Japan, as several diplomats said. The move is another G7 response to Russia’s war of aggression against Ukraine. The aim is to reduce the country’s income and thus limit its warfare capabilities.
The diamond trade is an important industry for Russia and a significant source of income. In 2021, the last year in which the state-owned diamond miner Alrosa disclosed its figures, the company generated 332 billion rubles (around 4 billion euros) in revenue. Russia is the world’s largest producer of rough diamonds.
So far, however, the EU has not restricted trade. One of the reasons has so far been resistance from Belgium. The Flemish port city of Antwerp has been considered the diamond center of the world since the 16th century.
“You can’t replace us”
The USA, Canada and Great Britain had imposed sanctions on Alrosa. According to the outgoing Alrosa CEO Sergei Ivanov – son of the former defense minister of the same name and close confidante of Russia’s ruler Vladimir Putin – this has hardly damaged the company’s business. The plan for 2022 was exceeded, and the first quarter of 2023 also went well. Ivanov was optimistic that new sanctions will not take effect. “You can’t replace us,” after all, Alrosa’s share of the global diamond trade is around 30 percent, Ivanov said in an interview with the daily newspaper “Kommersant”. Alrosa countered the previous restrictions, for example on the purchase of western conveyor technology or banking services, by switching to other service providers.
The diplomats did not initially give details of the new G7 plans. A senior representative only admitted that details still had to be clarified. For example, it is unclear how India is to be persuaded to at least participate indirectly. According to information from Moscow, a lot of diamonds are cut there and the country has not yet participated in the sanctions of the G7.
The “Group of Seven” (G7) is an informal alliance of leading democratic industrial nations. The members are Germany, France, Great Britain, Italy, Japan, Canada and the USA as well as the EU. The summit of heads of state and government begins on Friday. In addition to the Russian war of aggression against Ukraine, the focus is also on dealing with China and climate protection.