The U.S. government wants the diamond industry to know it hasn’t forgotten about its sanctions against Russian goods.
On Oct. 24, the U.S. Department of State invited 50 leading diamond manufacturers, retailers, and labs to discuss the efficacy of U.S. sanctions against Russian diamonds.
“The meeting focused on the importance of the diamond industry’s robust implementation of Russia-focused sanctions and broader due diligence standards,” said a State Department statement.
One attendee, who wished to remain anonymous, says that the meeting included “some very high-level people from the government.
“Their thesis question was, ‘We put on these sanctions, which should have disrupted your supply chain, but it doesn’t seem like it’s had the effect of shutting down 30% of the market.’
“The meeting didn’t have an aggressive or threatening tone,” this person continues. “They went out of their way to say we don’t have any big plans to change current regulations. But it’s a sign that they’re watching us, and counting on us to be their partners.”
Says a second attendee: “They were taking the pulse of the industry and getting a sense if the sanctions have been effective. Melee is the challenge.”
A third adds: “They were very curious whether anyone had any information of pricing of goods. If Alrosa goods were priced lower, they looked at that as a sign of success.”
There were also questions about the Kimberley Process (KP). Industry representatives said the government should continue to press for a change in the KP’s definition of “conflict diamonds.”
Following the meeting, the Jewelers Vigilance Committee sent out a statement, noting that there are currently sanctions against Alrosa, the leading Russian diamond producer, and that even dealing with a company that does business with Alrosa—as most major Indian cutters do—could require “enhanced due diligence.”
“Businesses could be at risk for derivative sanctions by contributing funding to a company that does direct business with Alrosa,” the statement said.
It also noted that while there are currently no sanctions against diamonds mined in Russia, if they are cut and polished elsewhere, the “safest course of action for all U.S. businesses remains to decline purchasing any goods that originated from Alrosa or Russia.”
The head of the Office of Sanctions Coordination, Ambassador James O’Brien, oversaw the hour-long virtual meeting, which was attended by a wide range of officials from across the government, including the deputy assistant secretary for counter threat finance and sanctions, Erik Woodhouse.
One attendee, David Bouffard, vice president of corporate affairs for Signet Jewelers, says he stressed the importance of jewelers, both large and small, joining the Responsible Jewellery Council, which he currently chairs.
He adds that any retailer who sells diamonds can learn more about the steps it can take to maintain a conflict-free supply chain by visiting Signet’s open-source guidance here.
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