Rapaport Trade Alert: Russian Sanctions

RAPAPORT… The invasion of Ukraine has resulted in significant sanctions against Russia by the US, the European Union and other governments. On February 24, 2022, the US Office of Foreign Assets Control (OFAC) added Alrosa to a list of menu-based sanctions and added its CEO, Sergey S. Ivanov, to its Specially Designated Nationals (SDN) list, with higher levels of restrictions.

The initial focus of the sanctions is on capital markets, making it very difficult to move money into or out of Russia. The US’s Jewelers Vigilance Committee (JVC) reports that the “action bans US businesses and persons from entering into debt transactions longer than 14 days with Alrosa but does not impose the harsher sanctions of an asset freeze and outright prohibition of all business.”

We expect trade with Russia to be severely disrupted. The invasion and sanctions will have political and economic consequences impacting the diamond markets. Rough-diamond supply will be disrupted, as will the global financial markets. At this early stage, the impact on diamond demand is unclear.

Readers are advised to read the full JVC member alert and visit Diamonds.net for Rapaport updates. Rapaport will host a webinar on Monday, March 7, at 12 noon EST, entitled “Politics, Economics, and Diamond Prices: Dealing Diamonds Amid a New World Order.” Register here.