Russian Diamonds Are Belgium's Best Friend — But For How Much Longer?
Belgium has lobbied hard for the past year to keep Russian diamonds off the list of sanctioned goods. Indeed, there would be a huge impact on the economy of the port city of Antwerp, if Europe finally joins with the U.S. and others in banning sale of so-called "blood diamonds" from Russia. But a 10th package of EU sanctions arriving this month may finally be the end of the road.
Since Vladimir Putin's invasion of Ukraine, the European Union has agreed to nine different packages of sanctions against Russia. With the aim to punish Moscow's leadership and to cripple the war economy, European bans and limits have been placed on imports of a range of Russian products from coal, gas and steel to caviar and vodka — were successively banned over the past 11 months.
Still, one notable Russian export is a shining exception to the rule, still imported into Europe as if nothing has changed: diamonds.
Russian state conglomerate Alrosa, which accounts for virtually all of the country's diamond production (95%) and deals with more than one-fourth of total global diamond imports, has been chugging along, business as usual.
But that may be about to change, ahead of an expected 10th package of sanctions slated to be finalized in the coming weeks. During recent negotiations, with 26 of the 27 EU members agreeing on the statement that ALSROA’s diamonds should no longer be imported, the one holdout was not surprisingly Belgium.
The Belgian opposition to the ban is explained by the port city of Antwerp, where 85% of the rough diamonds in the world pass through to get cut, polished, and marketed. There are estimates that 30,000 Belgians work for Alrosa.
Officials say the EU's new package of sanctions against Russia may be announced on Feb. 24 — one exact year after the start of the invasion.
2022, Belgium. Pieces of jewelry in the window of a store in Antwerp's diamond district.
Luise Evers / dpa via ZUMA Press
Price of peace
After an exceptional European summit to be held on Feb. 9-10, the EU will have to state what the new sanctions against Russia will be. And we can now expect that the subject of Russian diamonds — which some have dubbed "blood diamonds" — will be catching the world's eye.
Ukrainian activists have consistently accused Belgium of financing Russia’s war. And the Belgian government’s position on the situation has been ambiguous, with the Belgian government arguing that a ban would have a drastic effect on Europe's economy.
But after countries such as Poland and Lithuania insisted that this trade with Russia should cease, momentum has grown to include diamonds in the list of banned products. In response Belgium has proposed a system to the European Commission that it says would allow for the tracing and identification of diamonds of Russian origin.
“The revenue for Russia from diamonds can only stop if the access of Russian diamonds to Western markets is no longer possible..” Prime Minister Alexander De Croo told the Brussels-based website Politico.
Tracking blood diamonds
Belgium says tracking Russian diamonds on the market will allow Europe to penalize the Russian economy without undermining the European diamonds market, Brussels-based daily Le Soir reports. Tom Neys, of the Antwerp World Diamond Center, argues that “an international framework of global transparency” is the wise alternative to a blanket ban.
Yet other Western partners are skeptical. German daily Die Weltargues that tracing “blood diamonds” wouldn’t be a solution — because Russian diamonds couldn’t be polished in Mumbai before being sold in Europe again. Meanwhile, Politico fears that there would be a risk of diverting the goods to other markets where traders are less diligent.
The U.S., which included diamonds in its list of sanctioned goods in April, is convinced that Alrosa has been helping Putin to finance his war, as stated by the United States Department of the Treasury almost a year ago. And, as proclaimed by Ukrainian President Volodymyr Zelensky in March, just weeks after the invasion: “peace is worth all the diamonds in the world.”
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