Alrosa, the world’s largest diamond miner by volume, is the first large company targeted by sanctions in response to Russia’s invasion of Ukraine. Effective February 24, U.S. companies can no longer engage in transactions and contract debt beyond a 14-day deadline with the group, which is 33% owned by the Russian Federation and 33% owned by the government of the Republic of Sakha (Yakutia). Also included in the definition of debt are consignment items and stock market transactions involving the mining group’s shares, which is listed for the remaining 33%. Ironically, it is Alrosa’s very decisive strategy in support of Blockchain’s digital technologies that could represent a self-inflicted damage as long as it intends to register the geographic origin of its diamonds. Which is to say, it could automatically exclude them from being traded.
JVC, the U.S. Jewelry industry Vigilance Committee, points out that in addition to direct sanctions against Russian diamond companies, there are also stringent restrictions inhibiting transactions with many Russian banks. These include VTB Bank, which owns another Russian diamond company, Grib.
But the squeeze doesn’t end there. The company’s CEO, Sergey S. Ivanov, because he is registered as a Specially Designated National (SDN) by the Office of Foreign Assets Control (OFAC) can no longer do business in the U.S. and his assets in the country are seized. Ivanov is part of the circle of oligarchs close to President Putin.
The expulsion of Russia from the SWIFT payment system is a further threat to Russian exports of raw materials including diamonds and gemstones.
(Photo: ALROSA Website)
