In a move to tighten the financial noose around Russia, the US Treasury has imposed sanctions on renowned Antwerp diamond merchant, Grib Diamonds, known for importing rough diamonds from Russia.
These sanctions have now led to a halt in trade and transactions between US entities and the Belgian diamond firm, raising questions about the company's future operations and effectively making it more difficult to do business with Russia.
GRIB Diamonds NV, located on Antwerp’s Schupstraat, has been a prominent wholesaler since 2014, dealing in diamonds originating from the Grib diamond mine in northwest Russia, discovered in 1995 and named after the Russian geologist Vladimir Grib.
After being mined, the diamonds are transported to Moscow and subsequently to Grib Diamonds in Antwerp, where they are auctioned online in 'spot market internet auctions'. There are currently no comprehensive European sanctions against the Russian diamond trade in Europe.
The US sanctions, initiated by the Office of Foreign Assets Control (OFAC), a branch of the US Treasury, were enforced on 14 September, applying to both Grib's Russian parent company, JSC AGD Diamonds, and Grib Diamonds NV in Antwerp. In 2021, Grib Diamonds reported a turnover of around €310 million and had approximately 20 employees. JSC AGD Diamonds, on the other hand, faced bankruptcy in the same year.
Diamonds aren't forever?
Following the application of the sanctions, the remaining directors of Grib Diamonds in Belgium resigned, rendering the company ungovernable. A restructuring expert was appointed by the Antwerp business court to ensure the payment of staff and creditors, but questions remain about the future of the company. The courts will need to also decide the ultimate benefactor of the now-defunct company.
Grib Diamonds’ 2021 annual report reveals that the Russian company Otkritie Industrial Investments LLC was the 'grandparent company' of Grib Diamonds. However, this company was reportedly sold in August 2023 for a mere €98,000 to another Russian entity.
GRIB effectively allowed Russia to continue its stream of diamonds across the world. While the US previously sanctioned Russian state-owned diamond giant Alrosa, it neglected to sanction Grib.
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While direct exports of Grib diamonds were not allowed to the US, the Antwerp-based company was able to sell the diamonds overseas, where they would be mixed at diamond sorting tables in Dubai. Grib is responsible for 5-10% of all Russia’s diamond exports and pays taxes in Russia, which are used to finance its war against Ukraine.
The European Union is still deliberating whether Grib will also fall under the European sanctions regime against Russia. The Belgian Treasury considers that Grib Diamonds is under the control of VTB, a major Russian bank, which is already on the European sanctions lists. Grib Diamonds is contesting this assessment before the Council of State, which is expected to make a ruling soon.
