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Sunday, February 9, 2025

The Blood Diamonds: Limiting Russia’s Access to the Global Markets

— Tell me, Commander. How far does your expertise extend into the field of diamonds?

— Hardest substance found in nature. They cut glass. Suggest marriage. They’ve replaced a dog as a girl’s best friend. That’s about it.

Had that dialog, generously laced with the trademark British humor, taken place in our time, and not in the 1971 Bond film Diamonds Are Forever, the main character could have certainly added another sinister twist. In the movie, the world’s greatest thief Blofeld steals a huge batch of South African diamonds and tries to use them to create a powerful space laser gun capable of blowing up all nuclear stockpiles, thus blackmailing the world for ransom.

Today, however, a courageous British 007 could’ve pointed out that a new global thief, Russia, is once again trying to blackmail the international community with nuclear weapons, while seeking to use the diamond exports proceeds to support its aggression against Ukraine and finance an array of subversive activities around the world.

Meanwhile, the global community has been consistently attempting to control the dark side of the rough diamond trade for years now within the framework of the Kimberley Process — an international voluntary agreement, or rather a multilateral understanding that brings together 85 states, industry and civil society representatives and covers 99.8% of global rough diamond production. The movement aims to introduce a system of international certificates that would prevent illicit transactions of the so-called conflict diamonds, while also facilitating the legitimate trade of those girls’ best friends the magnificent Marilyn Monroe so eloquently sang about in the Gentlemen Prefer Blondes.

To get an idea of how that extremely dangerous business is organized, it’s enough to see the Blood Diamond drama starring Leonardo DiCaprio

At the same time, the Kimberley Process is currently neither an international organization nor a multilateral agreement in the legal sense. And to get an idea of how the extremely dangerous diamond business is organized, one may look no further than the Blood Diamond drama starring Leonardo DiCaprio.

In 2004, as a member of the official Ukrainian delegation, at the Kimberley Process Plenary closing banquet, I found myself at one table with a representative of one of the former Soviet republics, who very insistently began to ask for my forecast on Ukraine’s upcoming presidential elections in October.

In response to my suggestion that everything would be decided by the public vote, he smiled and cynically remarked that when the presidential power is being transferred: «in the post-Soviet space, we have only three options: a third term, an official successor, or a son or daughter.»

At the end of 2004, Ukraine for good turned off the well trodden by some CIS countries political path

It was obviously then, at the end of 2004, that Ukraine for good turned off the well trodden by some CIS states’ political path to the East, choosing instead a treacherous and tortuous, but clearly its own majority-approved path to the West. So it’s no accident that on November 8, 2023, the President of the European Commission Ursula von der Leyen, assessing our country’s progress towards EU membership stated: «The protests on Maidan started now ten years ago…And now, ten years later, today is a historic day because today the Commission recommends that the Council opens accession negotiations with Ukraine and Moldova.»

Russia is actively trying to grow its diamond exports

Returning to the diamonds, however. It’s no secret that Russia is actively trying to grow its diamond exports, primarily to countries with wealthy prospective buyers, and thus, earn hard currency, much coveted by the aggressor state against the backdrop of the declining oil and gas EU exports.

In January of 2023 alone, the value of Russian diamond exports to Belgium amounted to 132 million euros, compared to 97 million in January 2022, although according to some reports, there was a gradual decline by the end of the year. Not coincidentally Belgium’s Antwerp is considered the world’s largest center of diamond cutting and trade. According to various estimates, about 1,600 companies and up to 30,000 people in the city are engaged in this labor-intensive but lucrative business.

Author: Getty
Russia is actively trying to grow its diamond exports, primarily to countries with wealthy prospective buyers, and thus, earn hard currency, much coveted by the aggressor state against the backdrop of the declining oil and gas EU exports. 

Naturally, in view of Russia’s large-scale aggression against our country, many in the world began to insist on sanctioning on Russian diamonds, rightly labelling them as bloody. In particular, such proposal within the framework of the Kimberley Process has been put forward by Ukraine, US and a number of other states well aware of the danger Moscow’s bellicose policy poses to the world order and therefore, of the need to limit its resource capabilities, including those used for war.

Russia hypocritically considers that a «politization» of the Kimberley Process

Not surprisingly, Russia hypocritically considers that a «politization» of the Kimberley Process and, with the support of Belarus, China, Kyrgyzstan, Mali and the CAR to name a few, is desperately trying to prevent it. One would clearly see why — according to some reports, Russia controls about 35% of the global diamond market which makes it one of the world’s leading diamond producers and suppliers. In particular, in 2022, the value of all Russian diamond exports was estimated at about $4.5 billion, and Moscow clearly wants to keep those considerable revenues. It should be noted here that the diamond exports revenues are, if not the key, then at the very least, one of the key sources of replenishing the aggressor country’s foreign currency reserves, used, in turn, to fund smuggling in the sanctioned Western electronics, buy the loyalty of foreign politicians and businessmen, and facilitate subversive operations.

US, Canada, UK and New Zealand added Russia’s largest diamond producer to the sanctions list

Back in 2022, the US, Canada, UK and New Zealand added Russia’s largest diamond producer ALROSA to the sanctions list, thereby prohibiting their legal entities and individuals from doing business with it.

In the second half of 2023, that course of action gained an even wider support among the G7 countries — home of 70% of the world’s buyers — also beginning to gradually gain popularity in the EU. Finally, after the world famous Cartier and Tiffany, protecting their reputations, refused to buy Russian diamonds, it seems that Belgium’s position has also changed.

The main venue of Russian diamond imports from Yakutia has already moved from Antwerp to Dubai

There is certain evidence, though, that at present, the main venue of Russian diamond imports, 77% of whose deposits are located in Yakutia with the remaining 23% — in the Arkhangelsk region, has already moved from Antwerp to Dubai. It is there that resourceful dealers are now mixing those with other diamonds into the sale lots, thus, going far and beyond to ensure that it’s impossible to identify the source.

Meanwhile, the EU does not give up attempts to seriously hamper Russia’s access to the international diamond market, inviting leading global players, including India and South Africa’s De Beers, to the negotiating table.

During the 2023 Kimberley Process Plenary, the RF tried to prevent its diamonds from being recognized as «blood diamonds» and strongly opposed the imposition of any restrictions on them. Moscow’s main argument was that that would undermine the global diamond trade and cause severe damage to the global mining industry. However, obviously, the underlying reason is a clear desire to continue receiving significant amounts of foreign currency that would continue to fund Russia’s shady operations. And by pulling in its submissive satellite Belarus, Russia has managed to successfully sabotage even the final communiqué that according to the current procedure, must be adopted only by consensus.

Russia’s defiant behavior also poses a danger to those who seek to profit from its blood diamonds

Despite the above, all conscious Kimberley Process participants should obviously continue putting pressure on those who undermine the international order and ignore the fundamental norms of the UN. After all, Russia’s defiant behavior also poses a danger to those who seek to profit from its blood diamonds, as they too may find themselves in a situation where the disregard for the rights of one has a domino effect on others.

What’s positive is that the European Commission and EU member states have recently agreed to impose strict sanctions on Russian diamonds. In early November, the press reported that Europeans planned to establish a unique marking for all diamonds larger than the set size, that should cover 80% to 90% of all world’s diamonds. The marking would contain the precise data on their origin, which will allow to cut Russia’s dirty diamonds out of the legal market. According to the information available today, starting January 1, 2024, Europe will also enact a ban on imports of Russian natural and synthetic diamonds to the EU, and, later — even on any jewelry made with them, including pearl items and precious watches.

That should really deal a hefty blow to the aggressor’s exports

If the ban also applies to those Russian diamonds that have been processed in third countries, that may be introduced on September 1, 2024, that should really deal a hefty blow to the aggressor’s exports. It is expected that this joint decision of the EU countries will be included in the twelfth package of sanctions against Russia to be finally approved at the December 14-15, 2023 EU summit.

Needless to say, it’s crucial that after the likely approval of the sanctions package, an effective mechanism for their effective implementation, both at the national and European levels, is promptly developed and agreed upon.

Ever since the Cold War, Kremlin has always had up its sleeve a variety of the tried and true subversive tools

One doesn’t need to be a James Bond, however, to predict that Russia will make every effort to circumvent those, involving complex schemes, powerful lobbyists, overt and covert agents, and all sorts of old and new sympathizers. Active special operations in the media also shouldn’t be excluded. After all, ever since the Cold War, Kremlin has always had up its sleeve a variety of the tried and true subversive tools that in more recent times, have been supplemented by the influence operations via social media.

So, in the near future, in coordination with its partners, Ukraine should make a focused effort to organize effective and multi-layered pressure, including media one, on those countries — possibly India and the Middle East — that seem to be the largest centers of Russian rough diamond imports and their subsequent processing. We need to remind the world that after all that the Russian aggressors have done in Ukraine, those diamonds are literally bloody and no girl should ever get them as a gift for they most certainly can never bring happiness or good luck.


by Oleh Bielokolos, Director of the Center for National Resilience Studies

Our mission is to formulate and promote the Ukrainian vision of national resilience: the interconnection with democratic values, human rights, international cooperation, regional and global security.

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