US lawmakers call for a ban on the trade in Russian-origin diamonds
Washington:
A bipartisan group of US lawmakers has sought the Biden administration’s help in restricting international trade and the sale of Russian-origin diamonds in the wake of major sanctions imposed on Moscow by the US and its European allies.
In a letter to Secretary of State Tony Blinken and Treasury Secretary Janet Yellen, lawmakers expressed concern that the sanctions issued by the Treasury Department to target Russia’s diamond industry could lead to Alrosa and its CEO Sergei Ivanov’s work independently on a global scale. will have minimal impact on the ability to
Alrosa is the largest diamond mining company in the world.
The company, which reported sales of $4.2 billion last year, accounts for 90 percent of Russia’s diamond mining capacity, up from 28 percent globally.
It is one-third owned by the Russian government, and until recently, had an office in New York City.
Mr. Ivanov is the son of one of Mr. Putin’s closest aides, Sergei Borisovich Ivanov, who previously served as Chief of Staff of the Executive Office of the President, Deputy Prime Minister and Minister of Defense of Russia and became a permanent member of the Security Council. are. of the Russian Federation, stated in the letter.
According to congressmen, the February 24 sanctions listing Alrosa only blocked debt and equity transactions, making a small dent in Russia’s large stake in the global diamond trade.
Although a significant initial step, with Alrosa’s position as CEO, these have yet to disrupt the business and revenues that eventually reach the Kremlin.
The administration also announced an import ban on March 11, which would ban “products of Russian Federation origin”, including non-industrialized diamonds, from entering the United States.
They wrote, “Experts note that there remains a “major loophole” in the sanctions regime, which is due to the explanation provided in the Foreign Asset Control Office’s frequently asked questions, allowing imports of manufactured diamonds in India or elsewhere. gives.”
That is, the term “origin of the Russian Federation” does not include goods “substantially converted in a third country”, and it has long been the view of customs and border protection to cut or polish diamonds in a third country. would qualify as a significant change.
“A recent report on the diamond industry indicated that around 95 percent of the world’s diamonds are cut and polished in India. Thus, as it stands at this time, a diamond may be mined by a subsidiary of Alrosa, polished or cut in India or any other country, and sold to the United States without restriction. , which benefits the Russian government,” the Congressmen wrote.
The lawmakers asked the Treasury Department to reconsider the interpretation of origin that allows the import of diamonds from countries that cut or polish Alrosa’s diamonds.
“Second, the United States must work with its Indian counterparts, as well as business hubs such as Dubai, to ensure that they are not used to pocket the pockets of those closest to Vladimir Putin,” They said.
Finally, State and Treasury departments should provide guidance to Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) to ensure they prohibit imports of Russian diamonds into the United States.
The lawmakers said Putin’s unprovoked and brazen invasion of Ukraine’s sovereign territory should be met with a vigorous response from the United States and its allies.
“Luxury goods, especially items such as diamonds that are primarily used for export to wealthy countries, should be among the first ones the Treasury and State Departments consider for future action.
“We call on the consideration of additional actions that would impede the Kremlin’s ability to access revenue from its diamond industry that could fund the invasion of democratic and sovereign Ukraine,” the letter said.