Gujarat traders embarrassed as US buyers ‘ban’ diamonds from Russia – Reuters
Express press service
AHMEDABAD: Following US sanctions against Russia following the latter’s invasion of Ukraine, diamond traders in Gujarat face a blow as US customers demand a declaration that cut stones exported from state do not come from Russia. Around 30% of all rough or rough diamonds imported into India come from Russia, with the lion’s share coming to Surat for further processing.
Naimesh Pachhigar, a diamond dealer, said: “The US government has issued a circular to local US traders asking them to verify the origin of diamonds before buying or selling them. He said the circular advised US dealers not to accept diamonds if they came from Russia.
“Because of this circular, there are many difficulties in the diamond market. Rough diamonds were originally supplied by the Russian company Alrosa, which accounted for 28% of global diamond mining. It is the largest diamond mining company in the world. The diamonds were sold by various Gujarat diamond traders to foreign markets after polishing them in India. This US government circular will cause problems for all diamond dealers in India as there is a shortage of rough diamonds after the outbreak of war,” he added.
According to the United States Treasury Department’s Office of Foreign Assets Control (OFAC) press release, “The United States Treasury Department’s Office of Foreign Assets Control (OFAC) has designated Alrosa, a company State Department (SOE) and the world’s largest diamond producer mining company, which is also responsible for 90% of Russia’s diamond mining capacity.The State Department has also renamed Joint Stock Company United Shipbuilding Corporation (USC), together with its subsidiaries and board members USC is a Russian state-owned company that develops and builds the majority of warships for the Russian military, including likely many of those used for bomb Ukrainian cities and harm Ukrainian citizens These actions were taken pursuant to Executive Order (EO) 14024. By these designations, the Treasury cuts off additional sources of support and revenue for the government of the Russian Federation (GoR) to wage its unprovoked war against Ukraine.”
“These sanctions will continue to put pressure on key entities that enable and fund Russia’s unprovoked war on Ukraine,” said Brian Nelson, Treasury Undersecretary for Terrorism and Financial Intelligence. “These actions, taken with the State Department and in coordination with our allies and partners, reflect our continued efforts to restrict Kremlin access to assets, resources, and sectors of the economy that are essential to supply and finance Putin’s brutality,” he added. added.
Now US customers are demanding that Gujarati traders provide certification to show that the stones they purchased did not come from Russia. This affected business, as local traders were forced to close shop and give employees an unscheduled two-day break, despite growing demand for ‘finished’ or polished diamonds.
“American buyers refused to buy finished diamonds that were originally rough diamonds mined in Russia. They wrote to Indian traders threatening to ‘ban’ anyone found selling such stones,” Dinesh said. Navadiya, Gujarat Region Chairman of the Gem Jewelery Export Promotion Council (GJEPC).