The UK has announced a ban on Russian diamonds as it tightens sanctions over Russia’s war in Ukraine. Countries in the G7 bloc also want to be able to trace the gemstones to block Russian exports as they try to limit cash flowing into Russia’s war chest. But how effective will these schemes be, and could there be unintended consequences?
How important are Russian diamond exports?
Russia’s diamond trade, worth about $4bn (£3.2bn) per year, makes up a small proportion of its overall exports. Before the invasion of Ukraine, Russia’s total exports reached $489.8bn in 2021, according to the central bank, with oil and gas making up $240.7bn of that.
Nevertheless, Russia is the world’s biggest diamond exporter by volume, followed by African countries. A state-owned company called Alrosa dominates Russian diamond mining – and it mined almost a third of the world’s diamonds in 2021.
Profits from Alrosa do flow into the Kremlin war chest, according to Hans Merket, a researcher with the International Peace Information Service – but it is nowhere near as important as oil and gas.
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