The world’s seven most developed economies – the G7 – are discussing imposing sanctions on Russian diamond exports, a complex measure that could potentially drive up the price of luxury goods. Russia’s diamond exports have largely evaded international sanctions since Moscow invaded Ukraine last February. This is despite calls to the contrary by Ukraine and some European countries, as well as several rounds of measures against energy exports by the Kremlin, banks and oligarchs.

According to the Observatory of Economic Complexity, in 2021 Russia received about $4.7 billion from diamond exports. This brought Russia to the eighth place in the world in the export of diamonds. Diamonds do not usually sell in the same way as oil or gold, but are a large market that goes beyond jewelry. Stones are also used for piercing, dentistry, computers. Some countries, such as Belgium, which buys a significant amount of Russian diamonds, want a “global approach” to Russian exports, rather than special EU measures, lest they be disproportionately harmed by sanctions.

“The debate has been going on for some time because there is a clear risk that Russia will simply divert its exports to third countries,” said Edward Gardner, a commodity economist at Capital Economics. “If sanctions were introduced in a way that would be difficult to bypass, then we could see less Russian supply on the market and higher prices,” he said. The diamond industry in Europe is concerned about the possible redirection of trade to other markets, such as Dubai, due to the prospect of paying more for raw materials, and this will not lead to a significant reduction in Russia’s trade income.

So G7 is looking into ways to use the technology to trace the original source of the stones. In March, the US and EU announced that “Russia continues to make billions of dollars from the diamond trade” and both “remain committed to imposing economic consequences on Russia.”

It should be noted that E.E. imported about €1.4 billion worth of Russian diamonds last year, according to Eurostat, up from €1.8 billion in 2021.