EU broadens sanctions on Russia, targets Alrosa’s diamond exports over Ukraine conflict

The decision to prohibit the import of diamonds from Russia was initially made in December, signalling the EU’s commitment to tightening sanctions aimed at financially squeezing the Kremlin.

In a significant escalation of economic measures against Russia, the European Union (EU) announced on Wednesday the imposition of sanctions on Alrosa, the state-run diamond giant, and its CEO Pavel Marinychev. This move is part of the EU’s comprehensive ban on the import of Russian diamonds as a response to the ongoing conflict in Ukraine.

The decision to prohibit the import of diamonds from Russia was initially made in December, signalling the EU’s commitment to tightening sanctions aimed at financially squeezing the Kremlin. Alrosa, as the world’s largest diamond mining company responsible for 90% of Russia’s diamond production, was deemed a crucial target by the EU.

Alrosa and its CEO have now been added to a blacklist, subject to both a visa ban and asset freeze within the EU. The EU justified its actions by stating that the company played a significant role in an economic sector that contributed substantial revenue to the Russian government. In 2022, Russia’s diamond exports amounted to around $4 billion, and the sanctions on Alrosa are expected to have a notable impact on the country’s economy.

The EU’s ban officially came into effect on January 1, with a focus on natural and synthetic diamonds exported directly from Russia. Additionally, a phased-in prohibition on diamonds processed in third countries is set to be implemented by September. The complexity of the situation prompted months of meticulous negotiations with G7 countries to establish a robust system for tracing the origin of Russian diamonds.

Belgium, home to the world’s largest diamond trading hub, played a pivotal role in these discussions, insisting on the implementation of a traceability system to ensure the effectiveness of the embargo. The involvement of Belgium underscores the importance of international cooperation in enforcing economic sanctions, particularly in sectors where a global supply chain is prevalent.

The EU’s latest measures against Alrosa represent the 13th round of sanctions imposed on Russia since the full-scale invasion of Ukraine by Russian President Vladimir Putin in February 2022. The persistent escalation of sanctions reflects the EU’s commitment to applying pressure on Moscow and addressing the ongoing geopolitical crisis.

As the EU continues its efforts to isolate Russia economically, the impact on Alrosa, a key player in the global diamond industry, is expected to resonate beyond national borders. The move also signifies the importance of targeted sanctions in disrupting specific sectors of a country’s economy while minimizing collateral damage.