ALROSA, the Russian state diamond company, produces approximately 30 percent of the world's rough diamonds by value and, before February 2022, was the world's largest diamond miner by volume. Its rough was sold primarily through Antwerp, where it was cut and polished before reaching retail markets in the US, Europe, and Japan. When the G7 moved to sanction Russian diamonds, the challenge was the same one that had made conflict diamonds difficult to track: once a diamond is cut and polished, its geographic origin is invisible. A 1-carat polished H VS2 round brilliant looks identical whether it originated in Botswana or Yakutia. Traceability was the only solution, and implementing traceability at scale was the G7's diplomatic and technical challenge. : G7 Leaders' Communiqué, Hiroshima Summit (May 2023), whitehouse.gov; European Council diamond sanctions documentation, consilium.europa.eu
G7 diamond sanctions timeline

March 2022: G7 commits to coordinated sanctions on Russia; initial measures target energy, finance, and defence exports
December 2022: UK, EU, and US impose initial restrictions on ALROSA and Russian diamond imports
May 2023 (Hiroshima G7 Summit): G7 agrees phased approach to diamond sanctions with traceability requirement
January 1, 2024: G7 ban on direct import of Russian rough diamonds above 1ct
March 1, 2024: G7 ban extended to polished diamonds above 1ct
September 1, 2024: G7 ban extended to diamonds above 0.5ct with phased implementation
Sources: G7 Hiroshima Communiqué (2023), whitehouse.gov; EU Council Regulation documentation; AWDC (Antwerp World Diamond Centre) implementation guidance

The traceability requirement: the key innovation

The core challenge of G7 diamond sanctions was that diamonds lose their geographic identity once cut and polished. A diamond rough from Yakutia, exported to India for cutting, polished in Surat, and re-exported as a finished stone, contains no physical mark identifying its Russian origin. Previous sanctions approaches would simply have required a declaration, easily circumvented by routing stones through non-sanctioning countries.

The G7 solution was a government-verified traceability system: diamonds above the threshold weight require documentation of geographic origin verified at each stage of the supply chain. Antwerp, which handles approximately 80–85% of the world's rough diamond trade, was designated as the central verification point where origin documentation would be checked before diamonds could be imported into G7 countries (G7 Hiroshima Communiqué, 2023; AWDC traceability system documentation, awdc.be).

Impact on the Antwerp market

The G7 sanctions and traceability requirements created significant operational complexity for the Antwerp diamond market. Dealers and cutters who had previously worked with Russian rough needed to establish alternative supply, primarily from Botswana, Canada, Namibia, and South Africa, or exit the Russian rough market. ALROSA's rough, previously available at competitive prices, was replaced by goods from other sources at different price points (AWDC market analysis, awdc.be; Rapaport Magazine market reporting on G7 sanctions impact, 2023–2024).

Impact on Indian cutting centres

Surat's diamond cutting industry processes a significant proportion of Russian rough, ALROSA has been a major supplier to Indian manufacturers. The G7 sanctions, by restricting Russian diamond imports into G7 markets, created supply chain complexity for Indian manufacturers who process Russian rough and export finished goods to G7 countries. India is not a G7 member and has not imposed its own sanctions on Russia; the constraints come from the export-destination requirements, not from India's own policy (GJEPC commentary, gjepc.org, 2023–2024; trade analysis of Indian manufacturing impact).

Primary sources

G7 Leaders' Communiqué, Hiroshima Summit (May 2023). whitehouse.gov; g7hiroshima.go.jp. [G7 agreement on phased diamond sanctions with traceability requirement; January 2024 rough ban above 1ct; March 2024 polished ban above 1ct.]

EU Council diamond sanctions documentation. consilium.europa.eu. [European Union implementation of G7 diamond sanctions; traceability system requirements; ALROSA designation.]

AWDC (Antwerp World Diamond Centre). awdc.be. [Implementation guidance for Antwerp traceability system; market impact analyses; alternative supply sourcing documentation.]

GJEPC market commentary. gjepc.org, 2023–2024. [India's manufacturing sector response to G7 sanctions; supply chain adjustments for Indian cutters processing Russian rough.]