US sanctions may harm jewelry companies

Chairman of the Rapaport Group, Martin Rapaport has deep concerned for the future of the US diamond trade and has proposed a Rapaport US Diamond Protocol that will enable the US government to implement Russian diamond sanctions without hurting the diamond trade.

Rapaport said the US government is now urgently formulating regulations to control the import of diamonds into the US. If we do not act, new US sanction regulations may severely harm small to medium sized US diamond and jewelry companies.

The US government has agreed with the G7 group of countries that “As of 1 March 2024, a ban on Russian diamonds polished in a third country will take effect and, as of 1 September 2024, the ban will be extended to include lab-grown diamonds, jewelry, and watches containing diamonds.”

The World Diamond Council (WDC) and De Beers Washington lobbyists are working to have US government regulators implement unnecessary, extensive sanction compliance regulations based on their WDC G7 Protocol.

“These compliance requirements are beyond the capacity of many small to medium sized jewelers and diamond traders. These new regulations designed for big companies would require small companies to document, report, and audit every diamond transaction within the US. Trade organisations would have to audit their members. If implemented the compliance regulations would force small companies out of business, reduce fair market competition, restrict US access to non-sanctioned diamonds, and restrain trade,” said Rapaport.

He said the key point is that effective US sanction regulations and enforcement should start, and stop, at the border.

“Once polished diamonds are in the US there should not be any sanction compliance requirements forced upon US companies. There should not be any restrictions or reporting requirements for diamond trading within the US.”

He believes that the best way forward is to present the US Diamond Protocol to the US regulators and to work with them to ensure honest, effective, and efficient US regulations that restrict the flow of sanctioned Russian diamonds into the US without harming the diamond trade

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