EU to sanction Russian diamonds, give Ukraine ‘windfall’ profits from frozen funds

The European Union is targeting Russian diamonds in its next round of sanctions against Moscow and homing in on giving Ukraine the ‘windfall profits’ from Russia’s frozen assets in the EU.

‘We are in the process of preparing the 12th package of sanctions. We are now in consultation with the Member States. In particular, we are looking into how to cut the remaining revenues that Russia draws from the export of diamonds to Europe and its partners,’ European Commission President Ursula von der Leyen said at a news conference in Brussels, 27 October.

‘This would be done in very close cooperation with our G7 partners. And we continue to make sure that our existing sanctions are properly implemented and effectively enforced,’ she said.

The G7 is reportedly working on a mechanism to track the origin of diamonds by their chemical composition, which would make it possible to identify diamonds mined in Russia and limit their imports, even if they were cut in other countries, such as India, where most of the world’s diamonds are chiselled.

The European Union also said it wants the ‘proceeds’ from Russia’s sovereign frozen assets to be directed for the reconstruction of Ukraine. Washington has said it wants ‘billions’ from Moscow’s immobilised wealth to go to Kyiv.

The European Commissioner placed the value of Russia’s frozen sovereign assets at Euro 211 billion. She added: ‘We are currently working on a proposal to initially focus on the so-called windfall profits. In other words, we will present a proposal to find a way how to use the proceeds from those assets that are currently benefitting a limited number of financial institutions in the European Union. These windfall profits are already quite substantial. And the idea is to pool them and then channel them through the EU budget “en bloc” to Ukraine and for the reconstruction of Ukraine.’