Sanctions Don't Matter: Russia Continues to Sell Diamonds to Europe

The Russian Federation, despite numerous sanctions from the European Union aimed at reducing its financial capacity to continue the war, nevertheless finds ways to bypass the restrictions.

In particular, starting from January 1, 2024, Russia is prohibited from exporting Russian diamonds to the EU. At the same time, the USA, Canada, and the UK imposed sanctions against the Alrosa group back in 2022, which controls 97% of all Russian diamond production.

However, to circumvent the sanctions, Alrosa established a shell company PBK: it is owned by a woman who previously worked at Alrosa, and the company was created to hide the origin of Russian diamonds.

This was revealed by investigative journalists from the Arctida project, who provided BILD with the results of their investigation.

According to the journalists, the scheme works like this: first, the unprocessed diamonds are sent to Armenia. There, the stones are polished and formally lose their Russian origin – now it is a product made in Armenia.

After that, the diamonds are sold to India, the UAE, or China, and then the chain leads directly to the largest diamond industry center in the EU, in Antwerp. At the same time, the AWDC industry union in Antwerp assured that starting from January 2024, they allegedly no longer trade in Russian gemstones, but according to the results of the Arctida investigation, business there is thriving.

For example, from January 2023 to March 2024, PBK exported diamonds worth 250 million euros. These revenues are taxed in Russia and, of course, replenish the Russian military treasury.

It is worth noting that the loophole for bypassing diamond sanctions was left by the European Union itself. In other words, for many years, the introduction of a blockchain tracking system has been announced, which could monitor the origin of stones from extraction to sale, but so far only stones weighing less than 0.5 carats are controlled in this way. Regulatory authorities recently announced that all gemstones will be tracked only from January 1, 2026.