Toward the end of February 2024, the Gem & Jewellery Export Promotion Council (GJEPC), World Federation of Diamond Bourses (WFDB), World Diamond Council (WDC), and International Diamond Manufacturers Association (IDMA) sent the following letter to the G7

We the undersigned, representing all segments of the diamond and jewellery industry, including organizations that are based in the G7 jurisdictions, call upon the G7 member states to hear our concerns over the proposal being developed by its experts to restrict diamonds of Russian origin (natural or synthetics) rough, polished or set in jewellery, from the G7 member states.

While strongly agreeing that the time has come for the industry to be able to trace the origin of their diamonds, we should be working together to meet these objectives but feel that the process, that has been suggested, will cause irreparable harm to the non-Russian industry.

As of 31st January, G7 member states have published high-level statements, with only the EU sharing limited details as to how this proposal intends to be enforced.

On Thursday 8th of February, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) confirmed that its new sanctions on Russian Diamonds will start in 2 weeks. (1st March 2024)
This sanction being the prohibition on diamonds of 1.00ct and greater that have been “mined, produced or manufactured wholly or impart in the Russian Federation, notwithstanding that such diamonds have been substantially transformed outside of the Russian Federation.”

  1. Considering the complexity of the pipeline and the looming date of the slated prohibition, the industry is seriously concerned as no guidance has been issued on the evidence required to comply. With just two weeks to go, the silence is extremely concerning. The trade requires clarity of process to secure their business.
  2. The G7 is not a Customs Union, and all goods would have to be checked crossing borders and their ‘non- Russian’ status verified and retained, to facilitate further trade.
  3. The details shared by the EU on the twelfth package to restrict Russian diamonds, which requires all non-Russian diamonds to be shipped to Antwerp to be certified as non-Russian, does more to restrict non-Russian Diamonds. This will not meet the objectives of the G7 and may create irreparable damage to the non-Russian Diamond Industry.
  4. The effect on the cost, of both rough and polished diamonds, from non-Russian sources being forced into one node has not been factored into the calculations. The increased costs of shipping the diamonds to Belgium, which include extra financing terms for the diamond traders, insurance, freight etc. will add a significant cost to the price of the diamonds. Over and above the time taken in shipping back and forth (and its non-eco-friendly narrative) there would be an extra charge for the inspection, certification, and registration of the diamonds, which would create a competitive is advantage for non-Antwerp dealers. The margins in the ‘mid-stream’ are small and these increases would seriously affect those involved and the price increase to the G7 consumer would be substantial and in fact, would make Russian diamonds far more desirable as they would be more accessible.
  5. We urge the G7 to support a global solution and any technology that is being made available to the EU, to register, certify and track rough diamonds and the subsequent polished diamonds produced from that rough, should be made available to all non-Russian producer countries, trading countries, manufacturing countries as well as consumer countries and allow legitimate and sovereign governments to certify the origin of their diamonds. This technology could easily be linked using the existing KP framework (Diamond Office) of those countries wishing to participate. Furthermore, the technology must be inclusive and accessible, and not destroy the trade in non-Russian diamonds.
  6. Artisanal and small-scale miners must have free access to the technology and should be able to send their rough into any cutting centre. The diamond trade is an important livelihood for millions in the artisanal trade, and although informal, artisanal mining is legal and legitimate. Any restriction that isn’t accessible to this important sector of the industry will create room for exploitation and disproportionally impact the sector.
  7. We stand united against forcing all participants who wish to sell their polished diamonds in the G7 markets, to send their rough to Belgium first. As diamond experts, we know that this would add no value to the objectives of the G7 member states and would result in a major restriction for all non-Russian diamonds, with terrible impacts on the industry. It would also force, a functioning trans-global trade into one centralised point that would create bottlenecks in supply and give unwarranted power and advantage to one participant at the detriment of all others.
  8. One must remember that the upcoming ban is on polished diamonds, the node in Belgium certifying rough diamonds, does nothing to comply with a polished ban. The manufacturing turnaround time of rough diamonds, from rough to polish and then to jewellery set with diamonds, takes on average 3-6 months. An advance notice of less than 6 months to start to implement a new regime (whatever it will be), means instant shut off many industrial processes in the diamond manufacturing pipeline in many countries around the world, bringing havoc to those whose livelihoods depend on the diamond trade.
  9. The process detailed by the EU, as it stands, undermines Sovereign African Governments to send their diamonds directly to the market of their choosing. It also undermines legitimate local industry beneficiation and could encourage smuggling, which would be counterproductive.
  10. Special attention must be given to protect restricted propriety trade information belonging to private companies, uploaded to the blockchain system.
  11. There is no information on what happens to pre-existing stock – both rough and polished;
    There is no information on second-hand diamonds and jewellery;
    There is no information on jewellery and watches.

Signed:

The Gem & Jewellery Export Promotion Council (GJEPC)
The World Federation of Diamond Bourses (WFDB)
The World Diamond Council (WDC)
The International Diamond Manufacturers Association (IDMA)