While Western sanctions haven't led to the collapse of Russia's economy, the Group of Seven (G7) nations remain determined to roll out the next round of sanctions in a matter of weeks. According to Reuters, this round aims to reshape the global diamond supply chain, shifting it away from Moscow's influence.
Reuters said, "The plan could transform the global diamond supply chain, but implementation will depend heavily on India, whose diamond industry employs millions of people who cut and polish 90% of the world's diamonds."
A Belgian official told reporters the new trade restriction will go into effect on Jan. 1. They said the ban was proposed by Belgium, where Antwerp, home to all major diamond mining companies, is located.
Reuters noted the restriction would fracture the global consumer diamond market in half as G7 countries would no longer be able to accept diamonds from Russia, the world's largest producer of rough diamonds.
"We're talking about restructuring a global market," the official said, admitting trade restrictions won't perfectly work right away.
The official continued, "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."
We pointed out last year that Russian mining giant Alrosa PJSC's diamonds were still flowing onto global markets despite the US Department of the Treasury's Office of Foreign Assets Control hitting the company with sanctions.
Anglo American Plc's De Beers said the diamond industry supports G7 efforts:
"The question is how we can do this collectively and effectively so that all parts of the industry – large and small – are represented."
Before the Russian invasion of Ukraine, De Beers and Alrosa were responsible for nearly 60% of all rough diamond sales worldwide, with De Beers accounting for 33% and Alrosa for 24%.
The challenging part will be getting India, the mecca of diamond cutting and polishing, on board with trade restrictions.
Another Belgian official said:
"The Indian polishers can polish whatever they want but (Russian gems) need to be segregated ... At the point when the polished diamond is offered for export, the reference will be made to the original rough, again using a combination of physical inspection and traceability data."
Despite all the sanctions that Western officials, US and European corporate media outlets, and neoconservative think tanks said would implode the Russian economy, the International Monetary Fund expects the Russian economy to grow by 1.5% this year. Remember, President Biden once vowed to "turn the ruble into rubble."
We must ask the difficult question: Why The Economic War Against Russia Has Failed?