The European Union has taken decisive action with its latest sanctions package, significantly impacting Russian nationals and the diamond trade. Announced on December 18, this twelfth set of measures introduces stringent restrictions, including barring Russian nationals from owning or managing cryptocurrency service providers within the EU. This move aims to prevent the circumvention of existing prohibitions on offering crypto services to Russia.
The European Commission (EC) asserts that these sanctions are geared towards promoting a fair and enduring peace. Highlighting the sanctions’ impact, the EC notes the substantial devaluation of the ruble, heightened interest rates, and stricter capital controls in Russia. Despite these successes, concerns linger about possible sanction evasion, especially with growing trade in specific products and countries.
One notable economist, Robin Brooks, has criticized certain Greek shipping moguls for allegedly undermining the G7’s oil price cap policy. In response, the EU has introduced new requirements for the Russian oil supply chain to disclose price details for ancillary expenses like insurance and freight.
In a groundbreaking move to ensure transparency in the diamond trade, the EU’s latest sanctions also focus on preventing Russian diamonds from entering the G7 market from January 1, 2024. This measure requires detailed traceability of diamonds, from extraction to the final product. This process involves mandatory registration and the creation of ‘digital twins’ for rough diamonds, complete with origin certificates. These details will be recorded in a blockchain-based ledger, ensuring a tamper-proof and transparent tracking system.
This innovative use of blockchain technology for tracing diamonds underscores the EU’s commitment to leveraging digital tools in enforcing its sanctions and promoting ethical trade practices.