America and the Russians’ attempt to “detoxify” sparkling things
Lawmakers and insiders in the US jewelry industry confirm Russian diamonds and gold can still be sold in the US even as companies and governments tighten controls.
In theory, US and European sanctions make it illegal to sell gold and diamonds from Russia. However, through a global network of intermediaries that is extremely difficult to monitor, Russian gold and diamonds can still enter the United States with a status that is difficult to verify.
With the conflict between Russia and Ukraine still unresolved, the Americans want to block all Russian income under the pretext of limiting Moscow’s financial resources to carry out military moves in the neighboring country. Gold and diamonds are also among them. Moscow is said to be stockpiling a huge amount of gold.
However, containment efforts do not appear to be easy. Most of the treated diamonds, along with the processed gold, are exported by Russia to China, India and Turkey. That means they can be brought into the US perfectly legally, even if the raw materials come from Russia.
The largest country on the planet meets about 1/10 of the global demand and 30% of the diamond supply. The World Gold Council believes that Russia has a vault of $140 billion in gold. Russia’s diamond vault is not known, but it is estimated to be about as valuable as gold.
Meanwhile, the origin of gold and diamonds is often difficult to distinguish. For example, Russian gold can be used in Turkish-made jewelry. Russian diamonds can also be polished in India before being re-exported. However, if American jewelers and consumers really want to know the origin of their items, they absolutely can.
Russia’s polished diamond sanctions became part of a US effort following Moscow’s Special Military Operation in Ukraine. In April, Washington placed Alrosa, Russia’s giant diamond producer, which contributes 90% of the country’s total supply, to its sanctions list.
Along with that, a bipartisan group of Congressmen sent a letter to the Administration of President Joe Biden to point out loopholes in the control of jewelry flow, especially the ease of importing Russian diamonds through third countries. They called on the US Treasury Department to change the country of origin and work with countries like India to stem the flow of Russian diamonds.
However, a draft bill called the “Russian Gold Containment Act” introduced to the US Congress in March, which would prohibit US citizens from trading in Russian gold with foreign citizens, has not been approved. via.
Christina Miller, an expert on the Global Gold Transparency Initiative (GGTI) project, said: “In an industry that is primarily comprised of small businesses and large networks of intermediaries, there is too much disruption. hazy in the middle of the supply chain”.
The GGTI is also calling on policymakers to strengthen sanctions by closing loopholes and making it illegal to handle Russian material even if it is obtained from a third country. Meanwhile, another organization said that under sanctions, many Russian businesses and individuals are likely to have sold gold on the black market by shifting their supply to a third country.
Currently, major jewelry companies have moved with gemstone and Russian gold. Tiffany & Co.’s owner, LVMH Moët Hennessy Louis Vuitton SE, says it is working to remove Russian diamonds from its supply chain. While operator Signet Jewelers Ltd. confirmed they stopped buying Russian diamonds….
However, many smaller jewelers disagree. They see Russian gold and diamonds as coming from a source of conflict, just as gold and diamonds come from other war zones in Africa, Asia and Latin America.
In another development, many business owners also pledged to say no to Russian gold and diamonds. However, fully traceable gemstones and metals often cost 20% more than Russian ones. This has made many American jewelers more concerned about their profit margins than the risk of conflict thousands of kilometers away.
In terms of customers, it is not clear how many people are willing to buy jewelry, precious metals of known origin at 20% higher prices than other types when they are of the same quality.
“I hear a lot of jewelers say they don’t want to care about their supply of precious stones or precious metals. That’s worrisome,” said Bob Goodman, a jeweler in Indiana, USA. .
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