EU sanctions against largest Russian diamond manufacturer
The European Union has extended the sanctions against the Russian diamond industry. With Council Implementing Regulation (EU) 2024/196 of December 21, 2023, the assets of Russia's largest diamond manufacturer, PJSC Alrosa, and the private assets of its managing director Pavel Marinychev were frozen in the EU as of January 3, 2024. The managing director is also banned from entering the EU. The Council of the European Union cites the following reasons:
"Alrosa is a state-owned company operating in Russia, which is specialized in the exploration, mining, manufacture and sale of diamonds. Alrosa is the largest diamond-mining company in the world. The diamond industry is strategically important for the economy of the Russian Federation, as it is the top non-energy export of the country. Alrosa accounts for over 90 % of all Russian diamond production. Alrosa also has a long-standing partnership with the Russian Armed Forces, as it has sponsored a submarine of the Russian Navy since 1997. Therefore, Alrosa is involved in an economic sector providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilization of Ukraine. Alrosa is also supporting financially the Government of the Russian Federation. "
With Council Regulation (EU) 2023/2878 of 18.12.2023 amending Regulation (EU) No 833/2014 concerning restrictive measures against Russia (Twelfth Sanctions Package), the EU had already introduced a ban on the export of Russian diamonds to Europe.
According to estimates, Russia earns around 3.7 to 4.6 billion euros annually from the diamond trade, making it the world's largest producer of rough diamonds. It is remarkable that it took the EU almost two years to come to terms with the sanctions that have now been introduced. Although diamonds were sanctioned in the USA shortly after the outbreak of the war, the difficulties of implementing the regulations were also evident there. This is because diamonds have to travel a long way to reach customers and the stones often change hands in the meantime. This makes it difficult to determine the origin of the goods and makes it easier to conceal them.
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