The European Union (EU) has announced significant changes to its sanctions on Russian diamonds, extending the transition period and introducing key exemptions that will affect importers and the wider jewellery industry.
Extension of the Sunrise Period
The EU has extended the “sunrise period” for its traceability requirements on Russian diamonds by six months. This means the mandatory traceability program for rough and polished natural diamonds will now commence on March 1, 2025, instead of the previously set date of September 1, 2024. This extension follows calls by major industry players, including De Beers, for more time to comply with the new rules.
Traceability Requirements
Under the new regulations, after the sunrise period ends, importers into the EU will need to use a traceability-based certification scheme for diamonds over 0.50 carats to prove that they are not of Russian origin. This requirement aims to enhance transparency and ensure that diamonds entering the EU market comply with the sanctions.
Grandfathering Clause
A significant change introduced by the EU is the “grandfathering” clause. This clause exempts diamonds that were already in the EU or another third country (excluding Russia) before the new rules were enforced. It also covers diamonds manufactured in third countries before the regulations took effect. The Antwerp World Diamond Centre (AWDC) welcomed this development, stating, “We are extremely pleased that, after months of intense negotiations, we have succeeded in pushing the needle to allow regularization of so-called ‘grandfathered stock.’”
Temporary Imports and Exports
The updated sanctions also clarify that temporary imports or exports of jewellery, such as those for trade fairs or repairs, will not be subject to the ban. This flexibility ensures that commercial activities and events are not unduly disrupted.
Impact on Jewellery with Russian Diamonds
Another important element of the EU’s update is the postponement of the prohibition on jewellery incorporating Russian diamonds that have been processed in third countries. This ban will only take effect once the European Council decides to activate it, providing additional time for the industry to adapt.
Industry Reactions and Broader Implications
The EU’s 14th package of sanctions, which includes these updates, aims to fine-tune previous measures implemented as part of its 12th package. The US and other G7 members have been closely monitoring these developments, with the US already having a self-certification requirement for diamonds of 1 carat or lower, reducing to 0.50 carats from September 1. There are calls from the jewellery industry for a similar grandfathering clause in the US to ease the transition.
De Beers has publicly called for a one-year extension to the sunrise period for the G7 sanctions, underscoring the complexities and logistical challenges faced by the global diamond industry. Belgium, a key player due to its status as a major destination for rough diamonds from Russia, remains at the centre of these discussions.
