Sunday, June 16, 2024

US targets Indian jewellers over Russian diamonds

US authorities have frozen transfers worth around $26 million by firms belonging to Indian diamond dealers over alleged imports from Russia, the Economic Times reported on Monday.  

The step by the US Treasury Department’s Office of Foreign Assets Control (OFAC) reportedly targeted subsidiaries of Indian diamond houses registered in the United Arab Emirates.  

Dollar payments by the UAE-based firms were stalled due to suspicions that their supplies have Russian origins, or that they have investments and other connections with Russian miners and sanctioned entities.   

The Gem and Jewellery Export Promotion Council (GJEPC) has taken up the issue with the Ministry of Commerce and the Indian Embassy in the UAE, according to chairman Vipulbhai Shah, as cited by the media.   

“We are also trying to explain to OFAC that the payments were made to non-sanctioned entities and even to some Russian entities well before the sanctions came into place. There is very little direct import of diamonds from Russia,” Shah said. 

In May, G7 leaders pledged to restrict trade in diamonds mined, processed or produced in Russia in an effort to further cut Moscow’s revenues.   

In a joint statement, the group of Western developed nations said it would curb the $4.5 billion Russian diamond trade by using methods including high-tech tracing.   

Kirit Bhansali, founder of Smital Gems and vice-chairman of the GJEPC, told the Economic Times that the Indian government is planning to raise the issue with G7 nations, so that supplies of rough diamonds can be ensured while the interests of the US government are protected.   

“Some of our Dubai-based importers who made remittance through banks there have not received payments for almost six months,” the official said. “The UAE government and the Dubai Multi Commodities Centre have taken up the matter with OFAC.”

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