A bipartisan group of American lawmakers has sought the assistance of the Biden administration in proscribing the worldwide commerce and sale of Russian-origin diamonds, in view of the huge sanctions that the US and its European allies have imposed on Moscow.
In a letter to Secretary of State Tony Blinken and Treasury Secretary Janet Yellen, the lawmakers expressed concern that the sanctions issued by the Treasury Department to focus on Russia’s diamond trade can have a minimal influence on Alrosa and its CEO Sergei Ivanov’s skill to function freely globally.
Alrosa is the world’s largest diamond mining firm.
The firm, which reported gross sales price USD 4.2 billion final yr, is answerable for 90 per cent of Russia’s diamond mining capability, which accounts for 28 per cent globally.
It is owned one-third by the Russian authorities, and till lately, had an workplace in New York City.
Ivanov is the son of certainly one of Putin’s closest allies, Sergei Borisovich Ivanov, who beforehand served because the Chief of Staff of the Presidential Executive Office, the Deputy Prime Minister and the Defense Minister of Russia and stays a everlasting member of the Security Council of the Russian Federation, the letter stated.
According to the Congressmen, the February 24 sanctions that listed Alrosa solely blocked debt and fairness transactions, making a small dent in Russia’s outsized stake within the world diamond commerce.
Although an necessary preliminary step, together with the designation of Alrosa’s CEO, these have but to impede commerce and revenues that ultimately attain the Kremlin.
The administration additionally introduced an import ban on March 11 which might ban “products of Russian Federation origin,” together with non-industrial diamonds, from coming into the United States.
“Experts note a “main loophole” remains in the sanctions regime that allows for importation of diamonds manufactured in India or elsewhere because of the interpretation provided in the Office of Foreign Assets Control’s frequently-asked questions,” they wrote.
Namely, the time period “Russian Federation origin” excludes items “substantially transformed into a third country,” and it has lengthy been the view of Customs and Border Protection that the slicing or sprucing of diamonds in a 3rd nation would qualify as a considerable transformation.
“A recent report on the diamond industry indicated approximately 95 per cent of the world’s diamonds are cut and polished in India. Thus, as it stands at this time, a diamond can be mined by an Alrosa subsidiary, polished or cut in India or another country, and sold to the United States without any prohibition, making a profit for the Russian government,” wrote the Congressmen.
The lawmakers requested that the Treasury Department rethink the interpretation of origin that permits for the importation of diamonds from international locations which will reduce or polish Alrosa’s diamonds.
“Second, the United States should work with its Indian counterparts, as well as those in trading centers such as Dubai, to ensure they are not being used to line the pockets of those closest to Vladimir Putin,” they stated.
Finally, the State and the Treasury Departments ought to present steerage to Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) to make sure they prohibit the importation of Russian diamonds into the United States.
The lawmakers stated that Putin’s unprovoked and brazen invasion of the sovereign territory of Ukraine ought to be met with a forceful response from the United States and its companions.
“Luxury goods, especially items like diamonds that are used mainly for export to wealthy nations, should be among the first that Treasury and State Departments consider future action.
“We ask to your consideration of extra actions that will constrain the Kremlin’s capability to entry income from their diamond trade which may fund the invasion of democratic and sovereign Ukraine,” the letter added.