Sanctions: G7 targets Putin’s diamonds

Sanctions: G7 targets Putin’s diamonds

Proposals and disagreements – The role of Antwerp

Of particular interest is next month’s G7 summit, which is expected to include a deal banning the sale of Russian diamonds, with the help of new technology that will allow authorities to track gemstones around the world.

The European Union has so far backed away from plans to impose sanctions on Russian diamonds, fearing an embargo could hit the Belgian city of Antwerp, a major international hub for the diamond trade. Instead, G7 governments are preparing an international ban on the sale of these gemstones.

Preparations are on track to announce more details at the summit in Japan starting May 19, a European government official involved in the negotiations told Politico. One of the main goals of this coordinated G7 push is to prevent the circumvention of sanctions, for example by importing Russian diamonds that have first been processed and labeled elsewhere in the world.

trace the diamonds

The Swiss company Spacecode now claims to have a solution to this problem: a new device capable of determining which region of the world individual diamonds come from.

Spacecode is already known for its surveillance work in the global diamond industry. At the same time, the company is working on a next step to determine “diamond DNA” because knowing the exact origin of diamonds is key to the industry, said Pavlo Protopapa, president and CEO of Spacecode.

According to him, Spacecode now has the technology to trace the origin of diamonds by understanding morphology – the chemical composition and optical properties of a diamond – because stones from certain regions have similar characteristics.

By understanding these unique characteristics, Spacecode’s device would instantly determine the origin of a stone, even if it had not been recorded earlier in the supply chain. “The diamonds are constantly mixed up,” he said, adding, “The only way to control that is to use Spacecode technology.”

Cracks in the front of the G7

EU and Japanese diplomats have spoken out against a US proposal to freeze G7 exports to Russia as part of negotiations ahead of the group’s Hiroshima summit next month.

The G7 leaders’ joint statement drafted for the meeting includes a commitment to replace the current regime of sectoral sanctions against Russia with a comprehensive export ban with few exceptions, according to documents cited by the Financial Times. Exemptions, according to the same documents, include agricultural products and medical supplies, among others.

According to officials familiar with the matter, the proposal was made by the United States because the White House seems unhappy with the way the sanctions have been applied so far, which leaves loopholes for Russia to continue importing. western technology.

“It’s not doable”

However, officials from Japan and EU countries sounded cautious at a preparatory meeting last week, arguing that a blanket export ban was not feasible. “From our perspective, it’s just not feasible,” the official said on condition of anonymity.

May 19 summit

G7 leaders will meet in Hiroshima on May 19 for a three-day summit that will focus on the impact of the war in Ukraine, economic security, green investments and the Indo-Pacific region.

The EU, which is a member of the G7 along with the US, UK, France, Germany, Italy, Japan and Canada, demands that its 27 members agree on sanctions policy .

He agreed to 10 sanctions packages against Russia from February 2022, but only after weeks of consultations and confrontations between member states, some of which won cuts and exemptions for critical domestic industries by threatening to oppose their veto to the restrictions.

The victory of the Belgians

For generations, Antwerp served as the main hub for diamonds arriving in Europe. Following Russia’s invasion of Ukraine a year ago, the city’s diamond industry warned that an EU ban on Russian diamond imports would deal an economic blow to Belgium and would only divert trade to India and the United Arab Emirates.

Russian rough diamonds make up around 30% of the world’s diamond trade.

With an international traceability system, linked to the import ban, Belgians can keep their own diamond industry alive while positioning themselves as world leaders in transparent and ethical trade.

“I am very happy that the G7 weighs its weight on this issue,” Belgian Prime Minister Alexandre De Croix told POLITICO.

“The traceability approach is the right one: it will gain consumer confidence in the sector by ensuring that ‘conflict’ diamonds are no longer available in our stores. Belgium and its diamond industry will provide the necessary know-how. »

But critics, including his own government, argue that the current approach is too slow. Within De Croo’s seven-party coalition, the Greens and Socialists urged him to move faster.

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