By Julia Payne
BRUSSELS, Sept 15 (Reuters) – The Group of Seven countries is expected to announce a ban on Russian diamonds in the next 2-3 weeks, a Belgian government official revealed.
Efforts to reduce Russia’s revenue from diamond exports and to build on Washington’s existing sanctions on Russia’s Alrosa, the world’s largest producer, have been subject to discussions among leaders of the G7 nations.
The system will come into effect in January, the official, who asked not to be named, told reporters in Brussels.
“G7 has decided on the principle of linking origin to quality but is still deciding the details,” the official said. Belgium has proposed a plan on tracing the rough diamonds and referencing them to the polished gem.
“The traceability burden is on traders and manufacturers so India does that already. They will have to able to provide verification in order to sell into the G7. You need the rough reference and prove the link to the polished.”
Belgium’s Antwerp is the world’s No. 1 one diamond trading hub. As of now, once the Russian diamonds are cut and polished outside of Russia, they are considered originating from the nation that “transformed” them.
“We’re talking about restructuring a global market,” the official said, acknowledging that it will not immediately work perfectly.
“Russia is the biggest supplier globally. With this system, we are cutting them out leaving them in an inferior market with lower prices. We are slashing the financial flows from this sector.”