A bipartisan group of American lawmakers has sought the assistance of the Biden administration in proscribing the worldwide commerce and sale of Russian-origin diamonds, in view of the large sanctions that the US and its European allies have imposed on Moscow.
In a letter to Secretary of State Tony Blinken and Treasury Secretary Janet Yellen, the lawmakers expressed concern that the sanctions issued by the Treasury Department to goal Russia’s diamond business can have a minimal influence on Alrosa and its CEO Sergei Ivanov’s skill to freely function globally.
Alrosa is the world’s largest diamond mining firm.
The firm, which reported gross sales value USD 4.2 billion final yr, is answerable for 90 per cent of Russia’s diamond mining capability, which accounts for 28 per cent globally.
It is owned one-third by the Russian authorities, and till just lately, had an workplace in New York City.
Ivanov is the son of one of Putin’s closest allies, Sergei Borisovich Ivanov, who beforehand served because the Chief of Staff of the Presidential Executive Office, the Deputy Prime Minister and the Defence Minister of Russia and stays a everlasting member of the Security Council of the Russian Federation, the letter mentioned.
According to the Congressmen, the February 24 sanctions that listed Alrosa solely blocked debt and fairness transactions, making a small dent in Russia’s outsized stake within the world diamond commerce.
Although an necessary preliminary step, together with the designation of Alrosa’s CEO, these have but to impede commerce and revenues that finally attain the Kremlin.
The administration additionally introduced an import ban on March 11 which might ban merchandise of Russian Federation origin, together with non-industrial diamonds, from coming into the United States.
Experts observe a significant loophole stays within the sanctions regime that enables for importation of diamonds manufactured in India or elsewhere as a result of of the interpretation offered within the Office of Foreign Assets Control’s frequently-asked questions, they wrote.
Namely, the time period Russian Federation origin excludes items considerably remodeled in a 3rd nation, and it has lengthy been the view of Customs and Border Protection that the reducing or sprucing of diamonds in a 3rd nation would qualify as a considerable transformation.
A latest report on the diamond business indicated roughly 95 per cent of the world’s diamonds are reduce and polished in India. Thus, because it stands at the moment, a diamond might be mined by an Alrosa subsidiary, polished or reduce in India or one other nation, and bought to the United States with none prohibition, making a revenue for the Russian authorities, wrote the Congressmen.
The lawmakers requested that the Treasury Department rethink the interpretation of origin that enables for the importation of diamonds from nations that will reduce or polish Alrosa’s diamonds.
Second, the United States ought to work with its Indian counterparts, in addition to these in buying and selling facilities equivalent to Dubai, to guarantee they aren’t getting used to line the pockets of these closest to Vladimir Putin, they mentioned.
Finally, the State and the Treasury Departments ought to present steering to Customs and Border Protection (CBP) and the Department of Homeland Security (DHS) to guarantee they prohibit the importation of Russian diamonds into the United States.
The lawmakers mentioned that Putin’s unprovoked and brazen invasion of the sovereign territory of Ukraine ought to be met with a forceful response from the United States and its companions.
Luxury items, particularly objects like diamonds which can be used primarily for export to rich nations, ought to be among the many first that Treasury and State Departments contemplate future motion.
We ask to your consideration of further actions that will constrain the Kremlin’s capability to entry income from their diamond business which might fund the invasion of democratic and sovereign Ukraine, the letter added.
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