Diamonds typically pass through dozens of hands before becoming part of a necklace, and it is quite difficult to know which stone is from Yakutia and which, for example, is from Botswana. Photo: Yuri Smityuk/TASS
THREE STAGES OF NEW SANCTIONS
Western girls are shocked. His best friends, and as you know, they are diamonds, can get girls off. The fact is that the G7 countries, which include Germany, Great Britain, Italy, Canada, the United States, France and Japan, agreed to ban the import of non-industrial diamonds from Russia. We are specifically talking about diamond jewelry, including watches and other items, as well as products made from natural and cultured pearls.
The ban will take effect from January 1, 2024, the G7 said in a statement after a meeting that took place virtually on December 6.
Well, haven’t we learned to evade sanctions? Easily. Let’s say, through India, the world’s main cutter. But hostile foreigners also foresaw this. They have already agreed on the second stage: the ban on the import of Russian diamonds from third countries, which will come into force on March 1, 2024.
Diamonds typically pass through dozens of hands before becoming part of a necklace, and it is quite difficult to know which stone is from Yakutia and which, for example, is from Botswana. For this reason, the G7 also plans to launch the third stage: starting in September 2024, a control and certification mechanism for rough diamonds will begin to operate. So that every pebble is registered, so that Russian carats do not reach Western girls. However, analysts at BKS Investments believe that “introducing a tracking mechanism is complex and expensive, especially for small diamonds, and its effectiveness may be limited, as a diamond changes 20 to 30 hands before reaching the consumer.” .
WE FIND PATHS
What are all these jewelry sanctions threatening us with?
“This is an expected measure, it has been discussed for a long time and will lead to a redistribution of our export flows, as is the case with other sanctioned products,” economist Denis Raksha told kp.ru. – The part that went to Belgium, was resold and cut there, will now go a different route; for example, to India, it will be cut and resold there. It won’t work across India; there will be another route. World practice over the past 50 years shows that countries against which sanctions are applied somehow find ways to circumvent them. And the fact that we, for example, despite the sanctions, continue to trade in oil, shows that everything will be fine with diamonds: there will be other buyers.
THIS IS NOT CRITICAL
However, it is still impossible to do without losses, the expert believes.
“Those who buy Russian diamonds will pay more for them, and in the first place are the population and companies of the G7 countries,” says Raksha. – Europeans paid hundreds of billions of euros for oil sanctions against Russia, removing them from their economy. The same will happen with diamonds, although to a lesser extent, since the market is smaller and diamonds themselves are not an essential good. Yes, there will be costs for us too. I foresee a slight drop in import volumes and an increase in costs to find new ways to deliver goods to foreign markets and find new buyers. But this is not critical either for the economy or for the industry.
A decline in exports began already in 2022, when Russia sold 24% fewer diamonds than in 2021.
Earlier, Deputy Finance Minister Alexey Moiseev warned the West that the artificial limitation of the supply of Russian diamonds could not be offset by other sources. In the future, this will lead to an increase in the production of synthetic (lab-grown) diamonds.
Top 5 countries with diamond production in 2022
Country / Production, million carats / Share in world production, %
Russia 41.9 / 35
Botswana 24.5 / 20.4
Canada 16.3 / 13.6
Congo 9.9/8.3
South Africa 9.7 / 8.1
World total 120/100
Top five diamond exporting countries in 2022
Country / Export volume, million carats / World market share, %
United Arab Emirates* 89./ 4 27
EU* 75.2 / 22.7
Russia 36.7 / 11.1
Botswana 27.1 / 8.2
India* 26.1 / 7.9
Total 331/100
* – countries that do not have their own production
Source: KPCS is an international organization for the coordination of diamond producing countries.
