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EU sanctions Alrosa, Russia's largest diamond producer

by Nate Ostiller and The Kyiv Independent news desk January 3, 2024 3:52 PM 2 min read
A diamond is held up for examination at a store run by Brilliant Earth, which uses conflict-free diamonds from Canadian mines, in San Francisco, California on June 5, 2009. (Chip Chipman/Bloomberg via Getty Images)
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The EU announced on Jan. 3 that it was adding Alrosa, Russia's largest diamond producer, to its sanctions list. The company's CEO Pavel Marinychev was also sanctioned.

The move was connected to the larger EU effort to crack down on the export of Russian diamonds, said the EU's top diplomat, Josep Borrell. Measures to ban the trade of Russian diamonds, including those processed or refined in third-party countries, was instituted as part of the 12th round of EU sanctions against Russia adopted on Dec. 18.

Russia is the world's largest diamond producer, earning around $4 billion from the diamond trade last year. Alrosa, partly owned by the Russian state, comprises 90% of Russia's diamond production and is the largest diamond-mining company in the world.

In the document detailing the sanctions against Alrosa and its CEO, the EU said that the company is "involved in an economic sector providing a substantial source of revenue" for Russia and "has a long-standing partnership with the Russian Armed Forces."

The company was sanctioned by the U.S., the largest market for diamond imports in the world, in April 2022. An investigation by the Kyiv Independent in October 2023 found that Alrosa nonetheless continued to sell diamonds to the West, including to the U.S. market, and even was able to increase its profits in 2023.

That diamond ring? It may have helped pay for Russia’s war
Editor’s note: This story uses sources who are speaking on condition of anonymity since revealing their identities would heavily damage their careers and expose them to legal and personal risks in the diamond industry. Their identities are known to the Kyiv Independent. Top findings: * Despite th…

The new EU measures to crack down on Russia's use of third-party countries to obfuscate the true origin of Russian diamonds may be complicated by corresponding actions from diamond sellers to bypass sanctions.

The U.S. sanctions against Alrosa initially impacted the Russian diamond market, particularly concerning direct exports to the EU and the U.S., but trade with other markets, namely the UAE, increased.

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