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EU Adds Key Exemptions to Russian Diamond Sanctions

June 24, 2024  |  Joshua Freedman
Alrosa rough diamond image

The European Union has extended the “sunrise period” for sanctions on Russian diamonds by six months and added an important concession for goods that predate the rules. 

The traceability program for imports of rough and polished natural diamonds will become mandatory on March 1, 2025, and not on September 1, 2024, the EU said in a statement Monday.

The extension’s purpose is “to allow more time to set up the G7 traceability scheme,” the EU said in its questions and answers.

This follows calls by De Beers and other industry figures to extend the interim period, during which importers may use other documentation to show that diamonds are not Russian. 

Once that period is over, importers into the EU must use a traceability-based certification scheme to verify imports of diamonds over 0.50 carats. 

The EU has also added a “grandfathering” clause to exempt diamonds that were located in the EU or a third country other than Russia — or were manufactured in a third country — before the rules went into effect. The EU ban on direct imports of diamonds from Russia began on January 1, 2024, while the ban on goods transformed outside Russia started on March 1. 

These diamonds no longer provide revenue to Russia, the EU pointed out.

Reuters reported last month that this concession was under consideration. 

“We are extremely pleased that, after months of intense negotiations, we have succeeded in pushing the needle to allow regularization of so-called ‘grandfathered stock,’” the Antwerp World Diamond Centre (AWDC) said. “Sanctioning these goods and prohibiting their trade would impose an unfair and severe financial burden on diamond companies without significantly impacting Russia’s revenues.” 

Furthermore, temporary imports or exports of jewelry, for example for trade fairs or repairs, will not fall under the ban. In addition, the EU has delayed the prohibition on jewelry incorporating Russian diamonds processed in third countries until the European Council, the EU’s executive arm, “decides to activate” it, the EU statement said. 

The EU said the update — part of its 14th package of sanctions on Russia since the Ukraine war began — “fine-tunes” the import ban on Russian diamonds, which it initially implemented in its 12th package.  

Earlier this month, De Beers called for a one-year extension to the sunrise period for the Group of Seven (G7) sanctions on Russian diamonds. It is up to individual G7 members — Canada, France, Germany, Italy, Japan, the UK, and the US, as well as the EU — to impose any rules. The EU is an important element because it contains Belgium, which is historically the number-one destination for rough diamonds from Russian miner Alrosa. 

The US currently requires self-certification for diamonds of 1 carat or lower, falling to 0.50 carats on September 1. A recent jewelry-industry delegation to Washington, DC, called for a “grandfathering” clause similar to the EU’s. 

Image: A Russian rough diamond. (Alrosa)

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