Jeweller - April 2022

News
More EU sanctions on Russia
The European Union has announced a fourth round of economic
santions on Russia following the invasion of Ukraine in late February,
and among the restrictive measures is a ban on the importartion of
luxury items such as diamonds and jewellery.
The move by the EU comes after a similar ban was placed on
importing Russian diamonds in the US.
The punitive measures also prohibit all transactions with identified
state-owned enterprises, the granting of credit rating services to any
Russian citizen or entity and any new investment in the Russian energy
sector. The EU also expanded the list of people linked to Russia’s
defence and industrial sectors.
The additional trade restrictions include a ban on importing industrial
and precious metals, jewellery, pearls, gold, rough and polished
diamonds, and metal parts valued at €300 ($US330) or more.
Despite the intensified measures, the enhanced restrictions apply only
to rough diamonds extracted or polished exclusively in Russia. Cut or
polished diamonds from Russian rough imported from other countries
are still considered legal.
Policy loophole
The US-based Jewelers Vigilance Committee (JVC) has cautioned
members from purchasing polished or cut diamonds from Russian
rough noting that “the risk of additional future limitations is high.”
The JVC has communicated to members and pointed out that while the
importation ban from the US Department of Treasury’s Office of Foreign
Assets Control blocked the US imports of rough, cut and polished
diamonds from Russia, a policy interpretation involving cut and polished
diamonds that underwent ‘substantial transformation’ from another
country processed from a Russian rough becomes a product of that
country, and is therefore legal.
‘Substantial transformation’ refers to products or goods processed to
make a fundamental change in form or appearance to gain more value.
“Under this guidance, rough diamonds imported from Russia into a
country that has not implemented sanctions or a ban and then cut and
polished are currently legal to import into the US as they will fall under a
separate harmonised tariff code,” the JVC said.
Sara Yood, deputy general counsel, JVC told Rapaport News, “It’s a little
disappointing because it makes me think that this import ban is probably
going to have a limited effect.”
For example, rough diamonds cut and polished in Russia are prohibited
from US importation, Russian rough cut and polished in India is exempted.
“What it really hinges on is how strong the US alliance is with other
countries and whether other countries also follow suit because I think
the ultimate goal is to close off the avenues for Russia to sell these
products,” Yood said.
“The US is probably really hoping that allies step up and implement
similar sanctions.”
FINE JEWELLERY MANUFACTURERS
MARKMCASKILL.COM.AU
+61 (08) 8352 1400 | sales@markmcaskill.com.au
ADELAIDE | BANGKOK