In response to Russia’s ongoing conflict with Ukraine, Prime Minister Rishi Sunak has declared a ban on the import of Russian diamonds into the UK.
This move was announced at the recent G7 summit in Hiroshima, Japan, with the Prime Minister stating that he wants to ensure “Russia pays a price” for its actions in Ukraine.
Russia is the world’s largest diamond producer, with an output of 35,958kct for 2022, albeit an 8.08% decline from 2021. Russia’s diamond industry was worth approximately $4bn (£3.2bn) in exports in 2021.
The Size of The Impact in the UK
Russia is not directly a significant importer of diamonds in to the UK.
Britain imported $4.1 million worth of diamonds from Russia in 2022 compared with $188,794 in 2021.
Overall, Britain imported $1.628 billion worth of diamonds last year with 76% coming from Belgium, Israel, India and the United States.
There were no diamond imports from Russia in the three months to end-March 2023.
Russia, despite the sanctions, remains a major producer of diamonds. Kremlin spokesman Dmitry Peskov has stated that “the global market is fluid, rich in alternative destinations,” indicating that Russia may seek other markets for its diamonds than the G7.
It should be noted that the UK’s sanctions are set to become law later this year, implying that the ban is not immediate and that there may still be some room for manoeuvre in the short term. The UK government also plans to target sanctions against 86 more individuals and companies connected to Russian President Vladimir Putin, expanding on the existing sanctions that have targeted more than 1,500 individuals and companies and frozen more than $18bn worth of Russian-related assets.
Meanwhile, other countries including the US and Canada have imposed their own sanctions on Russia, with US President Joe Biden announcing last year that the US would ban imports of Russian diamonds, along with seafood and vodka. As global efforts to strangle Russia’s trade revenues tighten, the landscape of the diamond market continues to evolve.
The ban on Russian diamonds is a significant move, and its full implications will only become clear over time. As the situation unfolds, UK jewellers should stay informed about the developments and be prepared to adapt their sourcing strategies accordingly.