Rapaport Warns G7 Leaders of Russian Sanctions Loophole

RAPAPORT PRESS RELEASE, November 16, 2023, Las Vegas… The Rapaport Group supports sanctions against Russian diamonds. Rapaport has now sent an open letter to the G7, leaders encouraging them to implement effective sanctions and warning them against fake “loophole” sanctions.

The letter highlights the risk that rough diamonds purchased from Russia will be cut in India and then exported onwards to the US as “Indian Origin” polished diamonds. The flow of money from the US to India to Russia continues unabated despite existing US sanctions, that include the “Russian Origin” loophole. Alrosa’s revenues from exports of diamonds for the first half of 2023 were the same $1.9 billion as the first half of 2022, proving that current US “loophole” sanctions are ineffective.

Rapaport expressed concern that the World Diamond Council (WDC) G7 Diamond Protocol contains the same loophole, enabling Russian diamonds to be imported into the US and other G7 countries after being polished outside of Russia. The letter also warns against implementing the WDC protocol that harms small companies in favor of big companies, by requiring unnecessary and highly burdensome tracing and auditing requirements. It also enables large companies to restrict the flow of auditable diamonds to select customers, thereby restraining trade and reducing competition.

The letter provides an alternative Rapaport US Diamond Protocol that effectively and efficiently restricts the import of Russian diamonds, regardless of where they are polished. It places responsibility on government agencies to control diamond imports through blockchain technology that traces the supply chain of diamonds from rough to polished import. It also removes all documentation and auditing requirements on companies once a diamond is in the US or G7 country.

“Governments must honestly restrict the flow of Russian and other sanctioned diamonds. It’s time to stop the optical illusion of fake sanction. We oppose efforts by governments and the World Diamond Council to whitewash sanctioned diamonds from Russia and Zimbabwe by using terms like ‘Russian origin’ or ‘conflict diamonds.’ Buyers have an ethical responsibility to ensure the diamonds they buy come from legitimate sources like Botswana, whose diamonds fund sustainable development,” said Martin Rapaport, Chairman of the Rapaport Group.

To learn more about sanctioned diamonds please visit Rapaport.com/sanctions.

Rapaport Press Contacts: [email protected]
US:  Sherri Hendricks +1-702-893-9400
India: Sathi Nair +91-22-6628-6500

About the Rapaport Group: The Rapaport Group is an international network of companies providing added-value services that support the development of ethical, transparent, competitive, and efficient diamond and jewelry markets. Established in 1976, the group has more than 20,000 clients in over 121 countries. Group activities include Rapaport Information Services, providing the Rapaport benchmark Diamond Price List, as well as research, analysis and news; RapNet, the world’s largest diamond trading network, with daily listings of over 1.7 million diamonds valued at more than $9 billion; and Rapaport Trading and Auction Services, the world’s largest recycler of diamonds. Additional information is available at rapaport.com.

Image: Russian diamonds. (Alrosa)