Sanctions, War, Russia, and Responsible Sourcing

A diamond can be mined in one country, cut in another, sold through a third, and imported into a fourth. This is precisely why the legal concept of origin does not always have the same meaning as geological, commercial, or customs “origin.”

After Russia’s invasion of Ukraine in 2022, this distinction became critically important in practice. Sanctions regimes began to track not only who sells a diamond, but also where it was mined or produced, how it was processed, and under which rule it enters a particular jurisdiction.

Factual cutoff for this chapter: August 7, 2026. Sanctions regulations and implementation guidance can change; the legal status of a specific transaction must always be checked against the text then in force in the relevant jurisdiction.

Five Questions Before Using the Word “Russian”

A professional analysis first asks:

1. where was the diamond mined or, if laboratory-grown, produced;
2. where was it processed;
3. what is its customs origin under the relevant rule;
4. who is the owner/seller/contracting party;
5. which jurisdiction and sanctions rule govern the transaction.

Without these questions, the term “Russian diamond” can be legally imprecise.

[VISUAL 102.1: Mining origin / manufacturing origin / processing location / customs origin / current counterparty]

ALROSA and the Beginning of the Modern Sanctions Framework

Russia has been one of the most important producers of natural diamonds for decades, and ALROSA is the central company in that system. Following the full-scale invasion of Ukraine in 2022, Western jurisdictions began introducing financial and trade measures related to Russian diamonds.

On April 7, 2022, the U.S. Office of Foreign Assets Control, or OFAC, designated ALROSA pursuant to Executive Order 14024. The consequence of such a blocking designation is that relevant property and interests in property in the United States or under the control of U.S. persons are blocked, with associated prohibitions on transactions unless an applicable exemption or OFAC authorization exists. That decision concerns an entity. Later prohibitions on importing certain diamonds concern goods. These are not the same legal instruments.

Entity Sanction, Product Ban, and Service Restriction

Three categories must remain separate:

• entity sanction — restrictions concerning a specific person or company;
• product restriction — a prohibition on importing, purchasing, or transferring particular goods;
• service restriction — a restriction on providing a particular service.

A transaction may be prohibited for one of these reasons, several of them, or none of them. The mere fact that a diamond is from a particular country does not tell us everything about every possible transaction.

United States: Mining Origin Can Survive Third-Country Polishing

Under OFAC’s Diamonds Determination and current FAQ 1165, effective March 1, 2024, the importation of covered nonindustrial diamonds of Russian origin weighing 1.0 ct or more is prohibited even when they have been substantially transformed outside Russia. Effective September 1, 2024, the corresponding threshold for that scope is 0.5 ct.

The key point is not the carat threshold itself, but the legal construction: cutting, faceting, or polishing in a third country does not necessarily remove Russian origin relevant to the U.S. sanctions prohibition.

OFAC also has specific licenses, such as General License 104 for certain pre-ban inventories that meet prescribed conditions. A threshold must therefore never be read separately from the date, scope, and any applicable license.

European Union: The Controlling Rule Takes Precedence Over an Older FAQ

Since January 1, 2024, the European Union has prohibited certain purchases, imports, or transfers of diamonds and diamond products that originate in Russia, are exported from Russia, or, within the prescribed scope, transit through Russia. For products processed in third countries, the prohibition expanded in phases: from March 1, 2024, to relevant diamonds weighing 1.0 ct or more, and from September 1, 2024, to the relevant scope weighing 0.5 ct or 0.1 g or more.

Article 3p(10) of Council Regulation (EU) No 833/2014 is particularly important for proving origin. Following the amendment in the 20th sanctions package, for polished natural diamonds under CN 7102 39 00, mandatory use of traceability evidence, including a due-diligence statement confirming that the diamonds were not mined, processed, or produced in Russia, applies from April 24, 2026.

This changes the transitional picture in the Commission FAQ of December 17, 2025, which, before that amendment, stated that documentary-based evidence would continue to be accepted after January 1, 2026. When implementation guidance and a later amended legal text diverge over time, the later rule in force controls.

For rough natural diamonds in the applicable CN categories, the system has a separate verification/certificate layer. It is therefore incorrect to speak of one universal “G7 certificate” for every diamond, every form of goods, and every stage of the chain.

[VISUAL 102.2: EU Article 3p evidence layers — rough verification/certificate, polished traceability evidence, and due-diligence statement]

United Kingdom: A Similar Objective, Its Own Legal Text

The United Kingdom has a separate sanctions regime. Current official guidance confirms a prohibition on importing certain natural diamonds mined in Russia and processed in a third country: effective March 1, 2024, for relevant diamonds weighing 1.0 ct or more, and effective September 1, 2024, for those weighing 0.5 ct or more.

The United Kingdom separately prohibited certain synthetic diamonds produced in Russia and processed in third countries. For relevant synthetic diamonds weighing 0.5 ct or more, that prohibition applies from April 24, 2025, subject to its own commodity scope, evidentiary rules, and licensing.

Official UK guidance from 2026 further demonstrates why substantial transformation and customs origin do not necessarily end the sanctions analysis: after processing, a diamond can become the product of a third country under one rule and still remain prohibited because the sanctions test tracks the fact that it was mined or produced in Russia.

G7 Coordination Is Not One Supranational Law

The G7 Leaders’ Statement of December 6, 2023, announced coordinated phased restrictions on Russian nonindustrial diamonds and the development of a traceability-based verification and certification mechanism.

But G7 political coordination does not itself create a directly applicable “G7 law.” Legally enforceable obligations arise through the regulations and authorities of particular jurisdictions—for example, the European Union, the United States, or the United Kingdom—so their text, scope, thresholds, exceptions, and licenses must be read separately.

Mining Origin Is Not the Same as Customs Origin

In international trade, substantial processing may change the origin of a product in a particular customs context. Sanctions rules may deliberately apply a different test and track the place of mining or production origin through later processing.

Two true statements about the same polished stone are therefore possible:

• after processing, it is a product of country X for customs purposes under the relevant customs rule;
• for sanctions purposes, it remains covered because its rough precursor was mined in Russia.

This is not a contradiction, but the result of two different legal tests.

The Kimberley Process Is Not a Sanctions Regime

The Kimberley Process Certification Scheme governs the international trade in rough diamonds and starts from its own, formally limited definition of conflict diamonds: rough diamonds used by rebel movements or their allies to finance conflicts aimed at undermining legitimate governments.

A sanctions regime asks a different question: whether a particular transaction involving goods, an entity, or a service is prohibited under a specific rule.

Therefore, KP-compliant ≠ sanctions-compliant. Likewise, a sanctions-compliant transaction is not thereby automatically proven to be responsible with respect to human rights or the environment or to be free of other supply-chain risks.

Geology Is Not a Sanctions Passport

As explained in Chapter 79, no scientifically robust method has been demonstrated that, independently of documentation, can reliably establish the geographic provenance of a randomly selected individual diamond. GIA’s 2022 analysis emphasizes the extensive overlap of measurable characteristics among deposits and concludes that reliable origin systems currently depend on preserving data from the point of mining, not on subsequently “reading the country” from the finished stone.

For sanctions due diligence, documented mining-origin data, processing history, supplier records, and other chain-of-evidence layers are therefore functionally different from gemological testing.

In other words:

a laboratory can establish a great deal about the material—but the documentary chain often answers a legal question that the crystal itself cannot.

Responsible Sourcing and Legal Compliance Are Not the Same Questions

The OECD Due Diligence Guidance for mineral supply chains provides a risk-based framework for identifying, preventing, mitigating, and reporting risks such as serious human rights abuses and contributions to conflict. The OECD describes the framework as applicable throughout the mineral supply chain, not as a diamond-specific sanctions rule.

Such a due-diligence system may be broader than a particular sanctions prohibition, but it is legally different in nature. A voluntary or contractual responsible-sourcing policy cannot override a statutory prohibition. Conversely, a legally permissible transaction is not thereby automatically proven socially or environmentally responsible.

Compliance Without Instructions for Evasion

Official EU guidance on sanctions circumvention recommends assessing business partners, transactions, and goods and recognizing red flags. In this book, transshipment, relabeling, unusual documentation structures, or complex ownership patterns appear exclusively as indicators for further review, not as procedures to be described operationally.

For a professional trader or buyer, the defensive sequence remains:

• identify the goods and commodity scope;
• determine mining/manufacturing origin;
• document processing;
• screen the contracting parties and the relevant ownership/control issue;
• determine the jurisdiction and date of the rule;
• check for any licenses, exceptions, and grandfathering provisions;
• preserve the evidence and escalate uncertainty before the transaction.

[VISUAL 102.3: KPCS / sanctions / traceability / responsible sourcing — four separate evidentiary layers]

The Date Is Part of the Legal Fact

A sanctions text that is accurate today may become inaccurate after the next regulation, license, or official guidance. Chapter 102 must therefore not be treated as an evergreen legal guide.

The final workflow is:

GOODS → MINING/MANUFACTURING ORIGIN → PROCESSING HISTORY → COUNTERPARTY → JURISDICTION → PRODUCT CODE/THRESHOLD → KPCS WHERE RELEVANT → SANCTIONS RULE → LICENSE/EXEMPTION → DUE DILIGENCE → DATE OF EVIDENCE.

[VISUAL 102.4: Sanctions-origin decision card — jurisdiction, date, product, threshold, evidence]

Chapter Summary

• “Russian diamond” is not a sufficiently precise legal category without additional context.
• Mining origin, processing location, customs origin, and counterparty must be distinguished.
• Entity sanctions, product restrictions, and service restrictions are different legal instruments.
• Since 2024, OFAC has tracked Russian origin through certain third-country processing for covered nonindustrial diamonds.
• In the European Union, for relevant polished natural diamonds under CN 7102 39 00, mandatory traceability evidence, including a due-diligence statement, has applied since April 24, 2026.
• An older implementation FAQ can become outdated after an amendment to the controlling legal text.
• The United Kingdom has its own regime for certain natural and synthetic diamonds, with its own thresholds, dates, and licensing.
• G7 coordination is not one identical law in every country.
• Third-country processing does not necessarily remove mining/manufacturing origin relevant to the sanctions test.
• The KPCS is not a sanctions regime.
• KP-compliant, sanctions-compliant, traceable, responsible, and ethical are not synonyms.
• Gemological analysis of a random polished stone is not a universal country-of-origin test.
• Responsible-sourcing due diligence and legal compliance answer different questions.
• Circumvention indicators are used for defense and escalation, not to describe methods of evading controls.
• Every threshold, commodity code, license, exemption, and documentary requirement must have a jurisdiction and date.
• This chapter requires a CRITICAL currentness review before every new publication version.