Russian Diamond Sanction Plan Likely to Be Delayed, Again

By Rob Bates | January 24, 2025

Industry members and government officials involved in the discussions over Russian diamond sanctions expect that a full traceability regime won’t be implemented by the current March 1 deadline, sources tell JCK.

The European Union (EU) had already postponed its plan to require origin information for every diamond of 0.5 ct. or more from Sept. 1, 2024, until March 1, 2025. And now it looks like the plan won’t be ready by March 1 either.

Sources say the process has become jammed up with technological issues, knotty policy debates, and a new administration in the United States.

It’s generally agreed that the technology for full traceability isn’t there yet, at least on the scale envisioned by the G7. Trials have shown it’s possible to track rough diamonds; however, implementing a global system that offers true rough-to-polished traceability remains a challenge, sources say. A number of producing countries, including Botswana and Namibia, have been tapped to set up “rough nodes,” but that’s very much a work in progress.

In addition, the G7 is still deliberating on a number of policy questions, including how to handle the import-and-export ledger that will result from the tracking system. Sources say it’s still not clear who will store the information, and who will have access to it. (One person gives this example: Could U.S. authorities use the data to investigate money laundering?)

While the sanctions planning process has largely been driven by the EU, it’s hard to imagine sanctions being effective without solid barriers to Russian diamonds entering the United States. Yet with a new administration taking office—and giving mixed signals regarding the sanctions—U.S. foreign policy is in a state of flux.

Although Vice President J.D. Vance has in the past criticized U.S. support for Ukraine, President Trump said on Thursday that he will expand current sanctions if Russia doesn’t end the war. (Sources point out that the United States never endorsed the March 1 deadline and has generally been quiet on diamond sanctions since last year.)

Concerns have also been raised over the EU’s decision to provide an $85 million grant for Diamond Foundry’s lab-grown diamond factory in Extremadura, Spain. Though that grant was issued by a different department from the one handling sanctions, it made some involved in the sanctions talks feel the EU wasn’t looking out for African producer nations.

Full traceability requirements may be stalled, but it has been illegal since last September to import Russian rough and polished diamonds of half a carat and above into the United States, with certain exceptions.

(Photo: Getty Images)