The longer Russia’s assault on Ukraine continues, the more complicated the situation becomes for the jewelry industry.
In the week since the United States first levied sanctions on one of the industry’s largest diamond suppliers, one thing has become clear—the situation is complicated, and no one knows quite where the industry goes from here.
Russian diamond miner Alrosa fell under the second round of U.S. sanctions announced [the week of 21 February] after Russia launched a deadly, unprovoked assault on Ukraine, creating a humanitarian crisis and drawing criticism from nearly every corner of the globe.
As previously reported, the sanctions are not a total ban on doing business with Alrosa, but the situation is murky.
Russia’s primary banks are sanctioned, which could complicate any financial transactions with Alrosa, as is the company’s CEO, Sergey Ivanov Jr.
Considering the sanctions on Alrosa, the banks and Ivanov, the Jewelers Vigilance Committee recommends companies check the lists of sanctioned companies and individuals, which are available here and here, to ensure they are not doing business with any of them.
Jewelers of America, meanwhile, issued a statement [on Monday February 28] advising its members to stop buying or selling diamonds, precious metals and gemstones of Russian or Belorussian origin.
It is also a good time for companies to review their anti-money laundering programs, JVC said.
In an interview Tuesday [March 1st], diamond industry analyst Paul Zimnisky noted the midstream section of the market—cutters and polishers based mainly in India—will be first to feel the effects of the sanctions, as the country’s Gem & Jewellery Export Promotion Council noted in a statement to Rapaport.
Rough diamonds being cut and polished today won’t end up in U.S. retailers’ hands for 3-5 months, and no one can say with any certainty what the situation will be then.
But, what about the diamonds that are already in the United States?
