EU delays traceability scheme to block Russian diamonds

The European Commission has said it will extend the transition period before a mechanism for tracing imports of rough and polished natural diamonds into the EU becomes mandatory until March 1, 2025.

The traceability programme is part of a package of sanctions targeting Russia as a result of its invasion of Ukraine in February 2022 that are designed to reduce its sources of revenue and capacity to wage war.

The six-month delay from the earlier deadline of September 1 on full traceability “fine-tunes” an import ban on Russian diamonds that came into effect at the start of this year, and had been widely expected as the industry does not have a traceability system in place and supply chains in the sector are long and complex.

Some diamond companies have already developed traceability systems for diamonds to tackle the illicit trade in conflict or blood diamonds, which are mined in war zones. De Beers, for example, has a blockchain-based system called Tracr that gives each diamond a unique identity as it is mined and activated it in response to the Russian invasion. However, as yet there is no platform ready to be deployed across the industry at scale.

The EC’s update also clarifies that the ban imposed earlier on imports of Russian diamonds does not apply to diamonds that were located in the EU or in a third country other than Russia, or were polished or manufactured in a third country, before this ban entered into force.

Countries including the US and UK banned direct imports of rough diamonds from Russia shortly after the war began, but that did not apply to gems that were cut and polished elsewhere in the world.

At the same time, the EU has decided to postpone a ban on jewellery incorporating Russian diamonds processed in third countries other than Russia until the Council of the EU rules on that issue and in the meantime will allow ‘temporary’ imports or exports of jewellery for trade shows or repairs.

Photo by Tahlia Doyle on Unsplash