Sanctions against Russian diamonds: what impact does this have on the financial markets?

Sanctions against Russian diamonds: what impact does this have on the financial markets?

According to a report from www.businessinsider.de,

The potential of Russian diamonds as a billion-dollar industry is at the center of the discussion surrounding the EU's recent sanctions against Russia. Experts estimate that Russia exported over 48.6 million carats of rough diamonds in 2021, with the main export destinations being the United Arab Emirates and Belgium. Belgium plays a key role in the global diamond industry and has long advocated for Russian diamonds to remain exempt from sanctions. Nevertheless, the planned boycott poses economic risks for Europe, according to Koen Vandenbempt, dean of economics at the University of Antwerp. He warns that a halt to imports of Russian rough diamonds could lead to the industry moving to Dubai or Mumbai, India, where there is less emphasis on transparency or sustainability. The European Parliament and the G-7 of the major Western industrialized countries have decided that Russian diamonds should also be subject to sanctions. However, Russia continues to be one of the biggest beneficiaries of the diamond boom, with Alrosa, the largest producer, accounting for 95 percent of Russian diamond production and 27 percent of global production.

The planned sanctions boycott therefore raises the question of which country will ultimately be most affected by the sanctions - Russia or Belgium. Experts disagree, but it is obvious that this issue will have a far-reaching impact on the global market and the financial industry. Many suppliers in Europe have already declared that their stones do not come from Russia, showing that the industry is committed to not sourcing from Russia. Although the EU is trying to implement such a sanction, there are still loopholes that could allow Russian diamonds to continue to enter the global market. It is therefore crucial to closely monitor and analyze the economic impact of these sanctions.