Alrosa: Sources in the business said on Friday that the United States’ decision to impose tougher sanctions on Alrosa of Russia, a significant player in India’s gems and jewelry industry, was being reviewed.
On Friday, US Secretary of State Antony Blinken issued “blocking measures” against the world’s largest diamond mining enterprise. “The US has imposed blockade sanctions against two Russian state-owned firms. “We will continue to increase the price of President Putin’s unjust war and atrocities against Ukraine,” he stated.
In recent years, diamonds have become a substantial component of India-Russia commerce, and the sector has gained attention from the highest levels of government.
The largest provider
The latest sanctions on Russia’s largest diamond supplier to India were announced just hours after India and the US announced a “2+2” ministerial meeting on April 11 in which Mr. Blinken and Defense Secretary Lloyd Austin will meet with External Affairs Minister S. Jaishankar and Defence Minister Rajnath Singh.
During the early stages of the crisis in Ukraine, US authorities targeted Alrosa, which has been designated as a state-owned enterprise (SOE) by the US Department of the Treasury. Alrosa is the “world’s largest diamond mining enterprise,” according to the Treasury Department, supplying “90 percent” of Russia’s raw diamonds. Because of its alleged ties to top Russian authorities, Western capitals have referred to Alrosa’s shipments as “conflict diamonds.” Alrosa’s deliveries to India had been halted earlier this year, but they were restored last month, despite the Indian gems and jewelry industry’s difficulties in making payments through German banks.
Alrosa’s CEO has given his approval
The US Treasury sanctioned Alrosa’s Chief Executive, Sergei Sergeevich Ivanov, shortly after the start of the Russian military assault. He is the son of Sergey B Ivanov, one of President Vladimir Putin’s closest aides.
According to the US notice on Friday, the new restrictions are “extending earlier sanctions by naming Alrosa.” According to the order, all Alrosa property in the possession of American persons is “blocked and must be reported” to the Treasury Department’s Office of Foreign Assets Control (OFAC). As a result, any India-Russia diamond trade involving American nationals is likely to be affected.
The Treasury Department tightened the sanctions even more by saying that “…any entities owned, directly or indirectly, by one or more prohibited persons are also barred.” All transactions involving property or interests in property of designated or otherwise blocked people by U.S. persons or within (or transiting) the United States are banned unless approved by a general or special license provided by OFAC, or otherwise exempt.”
Mumbai has a special customs zone
In 2015, the Bharat Diamond Bourse in Mumbai established a separate customs zone to handle rough diamonds from Russia, giving the diamond trade between India and Russia a new lease on life. During this time, India showed a keen interest in reaching out to Russia’s Astrakhan area, which serves as a basis for an Indian community that has long been involved in the diamond trade. On December 12, 2014, Mr. Putin was the chief guest at the World Diamond Conference, which was inaugurated by Prime Minister Modi.
The gems and jewelry industry in India employs a considerable number of people who have been affected by the outbreak. The diamond industry employs a large share of the country’s overall workforce of 4.64 million people.