The diamond industry is facing significant challenges following the implementation of bans by both the G7 and EU on the import of unpolished Russian diamonds. Concerns abound regarding potential supply disruptions, trade dynamics, and price fluctuations. Stakeholders worldwide are under pressure to adapt their business strategies amidst a lack of clarity and procedural complexities.
The bans, phased in over time, have progressively restricted the importation of Russian diamonds. Beginning January 1, 2024, the ban encompassed all natural, non-industrial rough or polished diamonds originating from Russia. This included diamonds mined, processed, or produced in the country, extending to non-industrial diamonds of all sizes.
Moreover, as of March 1, 2024, the restrictions were heightened to include Russian diamonds above 1 carat that had undergone processing in third countries. This extension effectively barred the indirect import of Russian diamonds into G7 and EU markets, regardless of their transformation elsewhere.
The impact of these bans is substantial, given that the G7 and EU collectively represent nearly 70% of global diamond consumption. Industry players are now compelled to navigate a complex landscape, anticipating the implementation of a traceability mechanism by September 1, 2024. This mechanism aims to establish the provenance of diamonds, as outlined in a December 6, 2023, statement from the G7.
As the industry grapples with these developments, stakeholders are urgently seeking solutions to mitigate the effects of the bans and adapt to the evolving trade environment.
