US Imposes Further Sanctions on Alrosa

RAPAPORT… The US has blocked assets belonging to Alrosa in the government’s latest action against the Russian miner.

The Office of Foreign Assets Control (OFAC) has “designated” the company in an effort to cut off funding for Russia’s war in Ukraine, the US Department of the Treasury announced Thursday. This means Alrosa has joined a list of companies with which business is prohibited.

“These sanctions will continue to apply pressure to key entities that enable and fund Russia’s unprovoked war against Ukraine,” said Brian Nelson, Treasury undersecretary for terrorism and financial intelligence. “These actions, taken with the Department of State and in coordination with our allies and partners, reflect our continued effort to restrict the Kremlin’s access to assets, resources, and sectors of the economy that are essential to supplying and financing [President Vladimir] Putin’s brutality.”

The measure, which builds on earlier sanctions, prohibits Americans or people situated in the US from carrying out transactions involving property of Alrosa unless there is a specific license or exemption, according to a Treasury statement. It also bans US entities from giving funds, goods or services to Alrosa, and from receiving them from the miner.

Alrosa, in which the Russian state owns a 33% stake, has been subject to US sanctions since February 24, when the invasion of Ukraine took place. While the latest actions are more stringent, details of how they will affect the diamond trade are still unclear.

President Joe Biden’s administration banned the import of Russian diamonds last month; however, the prohibition did not include goods mined in Russia and polished in other locations.

Alrosa’s share price on the Moscow Exchange dropped 11% on Friday.

Image: A rough diamond. (Alrosa)