US authorities have taken action to freeze transfers worth approximately $26 million by Indian diamond dealers due to alleged imports from Russia. The US Treasury Department’s Office of Foreign Assets Control (OFAC) specifically targeted subsidiaries of Indian diamond houses registered in the United Arab Emirates (UAE). This move has led to the stalling of dollar payments by these UAE-based firms, as there are suspicions that their supplies may have Russian origins or that they have connections with Russian miners and sanctioned entities.
The Gem and Jewellery Export Promotion Council (GJEPC) has actively addressed this issue with the Ministry of Commerce and the Indian Embassy in the UAE. Vipulbhai Shah, chairman of GJEPC, explained that they are attempting to clarify the situation to OFAC, emphasizing that the payments were made to non-sanctioned entities and some Russian entities even before the sanctions were put in place. Shah also mentioned that there is minimal direct import of diamonds from Russia.
In May, G7 leaders made a collective commitment to restrict trade in diamonds that are mined, processed, or produced in Russia, in an effort to reduce Moscow’s revenues. The group of Western developed nations aims to curb the $4.5 billion Russian diamond trade by utilizing high-tech tracing methods.
Kirit Bhansali, founder of Smital Gems and vice-chairman of GJEPC, revealed that the Indian government plans to raise this issue with G7 nations. The goal is to ensure the supply of rough diamonds while also protecting the interests of the US government. Bhansali also highlighted the challenges faced by Dubai-based importers who have not received payments for almost six months. The UAE government and the Dubai Multi Commodities Centre have taken up the matter with OFAC.
This development has significant implications for the industry, as it puts a million jobs at risk. The freezing of assets by US authorities has created uncertainty and disruption in the diamond trade between India and the UAE. There is a pressing need for resolution to ensure the smooth flow of payments and the stability of the global diamond market.
The GJEPC is actively engaging with relevant stakeholders to address this issue and find a solution that enables the resumption of payments. The council is also exploring diplomatic channels to resolve the matter, with plans to raise it with G7 nations. It is essential to strike a balance between implementing sanctions and ensuring the sustained growth of the global diamond industry.
In conclusion, the freezing of transfers worth $26 million by US authorities affecting Indian diamond dealers is causing concern within the industry. The alleged imports from Russia and the connections with sanctioned entities have led to suspicions and subsequent payment delays. The GJEPC is taking proactive steps to address the issue and secure the interests of all parties involved. Finding a resolution is crucial to safeguard jobs and maintain the stability of the global diamond market.