Sanctions and embargoes imposed by the West are intended to finally deplete Vladimir Putin’s war chest. However, diamond exports from Russia have not been impacted. Belgium was the source of the opposition because it wanted to defend its industry. Now the country could give in.
Nine different sets of sanctions have already been imposed by Europe on Russia. Numerous products are no longer allowed to be imported into the nation. For example, coal, oil, steel, cement, wood, cigarettes Russian vodka, gold, and caviar. The many embargoes aimed at Vladimir Putin’s war chest should have finally dried up. However, diamond exports from Russia have not been impacted. And it’s because of a town in northern Belgium.
The Russian state-owned company Alrosa mines diamond far in eastern Russia, between the forests and glaciers of the Siberian region of Yakutia, and sells them to Europe. Even though Putin’s war against Ukraine has almost been ongoing for a year. And even though the West appears to be doing everything in its power to isolate Russia from the global economy. How is this possible?
The EU has to make a unanimous decision on its sanctions. According to diplomats in Brussels, 26 member states supported a ban on the importation of Russian diamonds during the most recent rounds of negotiations. One country has always been against it. Belgium. The reason: Antwerp. One of the largest and most beautiful cities in the country.
For more than 500 years, it has served as the hub of the world diamond trade. Nowhere else are so many gems processed as there. 85 percent of all rough diamonds in the world and half of all cut diamonds pass through Antwerp at some point on their long journey between mines and customers.
About 30,000 people work in this industry in Belgium. As a result, the country’s government may have little interest in imposing sanctions on gemstones. Pressure from other EU countries in the past seems to have had little effect, and calls from Ukrainian President Volodymyr Zelenskyy have gone unheeded. “Peace,” Zelenskiy said during a video call with the Belgian parliament in March, “is more expensive than all the diamonds.” But trade through the Antwerp hub continued anyway.
Diamonds are not as important to Putin as oil and gas. A European jewelry embargo would not have hit the Russian economy as hard as a ban on fossil fuel imports. But it would be a symbol. Now things are moving. The EU is preparing a new, tenth round of sanctions
Many member states want to stop importing Russian diamonds again, especially Poland and Lithuania. And in the last few days, the Belgian government has signaled for the first time that it can envision measures. Probably not an immediate ban on imports. Imports are also likely to be unrestricted in terms of quantity. But perhaps a new system will make it easier to trace the origin of diamonds.
For instance, it’s possible that Russian diamonds were polished and cut in Mumbai before being imported into Europe as Indian diamonds. The Belgians believed that if one could better comprehend the journey that gems take around the globe, the market would take care of it. with no mention of the sanctions against Russia.
America has a different viewpoint. The country banned Russian diamonds almost a year ago. Alrosa allegedly assisted Putin in financing his war, according to the Treasury Department in Washington. Together, the Yakutia region and the Russian state control 66% of the group. Its owner was among the first oligarchs to receive US sanctions because the US views him as a close ally of Putin.
Belgium feels US sanctions more than European ones
Alrosa’s ties to the Kremlin are undeniable. It is said that 30 years ago, the group financed the B-871 Alrosa diesel-electric submarine for the Russian navy. It has been modernized several times and equipped with cruise missiles it is still in service with the fleet. The fact that Europe bans coal, oil, and steel from Russia but not jewelry seems even harder to understand.
Belgium may have resisted European sanctions, but it has felt the American ones. Nearly one-third of the rough diamonds traded in Antwerp before Russia invaded Ukraine came from Alrosa mines. In 2021, Belgium will import 1.8 billion euros worth of Russian diamonds.
Imports decreased by about 80% in the previous year. Because one of the biggest buyers from the USA broke away The Antwerp trade in jewelry from Yakutia must soon stop completely.