G7 to Restrict Imports of Russian Diamonds Starting January 1

The Group of Seven (G7) nations have announced plans to curtail the import of Russian diamonds in a staggered process throughout next year.

“We will introduce import restrictions on non-industrial diamonds, mined, processed, or produced in Russia, by January 1, 2024, followed by further phased restrictions on the import of Russian diamonds processed in third countries,” G7 leaders said in a Wednesday statement, giving March 1, 2024, as the target date for the latter move. “To further the effectiveness of these measures, those G7 members who are major importers of rough diamonds will establish a robust traceability-based verification and certification mechanism for rough diamonds within the G7 by September 1, 2024.”

The countries will consult with producing and manufacturing nations about how to design and implement the mechanism, aiming for “comprehensive controls for diamonds produced and processed in third countries,” the document continued.

The statement did not refer to the restrictions as a “ban,” though media reports have used that term to describe them. Earlier on Wednesday, Reuters — citing an anonymous source — said that between March 1 and September 1, companies would be able to use a self-declaration system similar to the World Diamond Council (WDC) plan.

The G7 members — Canada, France, Germany, Italy, Japan, the US and the UK, as well as the European Union — also made no mention of the diamond sizes the rules would cover; the industry had expected the sanctions to apply only to 1-carat and larger diamonds at first.

The power to introduce import bans lies with the individual countries rather than the G7 as a bloc. The US already sanctioned Russian diamonds last year, but it still allows polished diamonds that come from Russian rough to enter the US if they were manufactured in a different country, since these fall under the loophole of “substantial transformation.”

Wednesday’s announcement followed a virtual meeting of G7 government leaders earlier in the day, which Ukraine President Volodymyr Zelensky also attended.

India’s Gem and Jewellery Export Promotion Council (GJEPC) said it had outstanding questions about the plans, including how the G7 defines “major importers of rough diamonds,” and how the sanctions will be executed.

“We have reservations on the timelines announced for the implementation of restrictions,” said GJEPC chair Vipul Shah in a statement Thursday. “Recognizing the diversity of our industry, we believe there should be more flexibility in these timelines.”

BRON: Rapaport 7-12-2023