Comments by Deputy RF Finance Minister Alexey Moiseev on the Results of the 2023 Kimberley Process Plenary Meeting and the G7 and the EU Sanctions Initiatives

14 November 2023 15:30

For the first time in the history of the Kimberley Process, the participating countries were unable to agree on a final communiqué wrapping up the 2023 Zimbabwean chairmanchip. This unprecedented event was engineered by Western countries that until the last minute struggled to include the Ukrainian narrative in the draft communiqué.

We have repeatedly warned our opponents about the unacceptability of politicizing the KP and eroding its mandate outlined by existing rules and procedures. Russia’s call to stop attacks on its diamond mining and attempts to impose unjustified restrictions on trade in Russian diamonds was supported by the majority of diamond-producing countries in Africa. Not a single participant outside the Western bloc spoke out in support of the aggressive rhetoric of the West; moreover, many spoke out for the immediate cessation of attempts to politicize the forum and against the deliberate undermining by a rabid minority of the foundations on which the work of the Kimberley Process is based to the detriment of substantive issues on the agenda of the chairmanship of our friend Zimbabwe. And there were many such issues, including the launch of the permanent KP secretariat in Botswana, and the discussion of practical steps to implement the “Declaration On Supporting Principles for Responsible Diamond Sourcing as Best Practices (“Frame 7”)” adopted during the Russian chairmanship, the lifting of the embargo imposed on rough diamond exports from the CAR, the election of Belarus as vice-chairman of the KP for 2024, and many other practical and organizational issues that are important for ensuring the sustainable development of the global diamond industry and its regulation.

Unfortunately for the global diamond industry, Western countries did not have the courage to listen to the voice of reason and disrupted the adoption of the final communiqué, just as we had warned in our letter to all KP participants. This only proves our concerns that Western countries are seeking to erode the purview of the KP, distort its goals and objectives, and bend the existing rules and procedures to suit their unilateral interests at the expense of the others. This directly threatens the real work of the KP, which is carried out for the benefit of its participating states, local communities and the entire diamond industry.

Discrediting the KP is part of the promotion by the West of its unilateral sanction initiatives against the Russian segment of the industry, clearly designed to limit market competition. The discriminatory measures of the G7, from their point of view, need to be legitimized by belittling the successes and consistently undermining the work of the KP as the only universal mechanism for controlling the international trade in diamonds. The introduction of the G7 initiative, in essence, means the formation of a structure parallel to the KP and out of control by the diamond-producing countries that should replace the unambiguous and equal for all parameters for regulating the diamond industry with its own restrictive mechanism based on a biased political approach.

Unilateral non-market and politically motivated actions can only cause significant damage to the diamond industry worldwide. As we have always noted, the imposition of restrictive measures on the world’s largest supplier will inevitably lead to widespread market distortions that will hit the most vulnerable the hardest. For many countries and local communities, the gains achieved through the KP will be erased. Unprecedentedly aggressive intervention will mean the spread of harsh practices of “wild capitalism” with unpredictable consequences. Western countries are playing with Pandora’s box - it comes easy to them, since at stake is the prosperity and well-being of the countries of the global South. This was clearly stated by many of our fellow African diamond producers during the Plenary debate. It is clear to them, as it is to us, that the deliberate distortion of the global diamond market and the consistent undermining of the KP, combined with the development of market-constraining geopolitical practices and their economic consequences, could lead to increased social unrest and insurgency in certain regions, bringing suffering to local communities in developing countries that mine and cut diamonds.

As I have already noted, such steps are aimed at legitimizing the political goals of the G7 through the creation of economically unjustified, artificial barriers to the diamond trade. This is not the first time Western countries have made such attempts. The world market has already faced attempts to limit the development of the diamond industries in a number of African countries - Angola, Zimbabwe, DR Congo, and the CAR. However, now we see the goal set to create a sustainable sanctions mechanism, a cartel-like KP-2, to bar access to the diamond jewellery consumption markets for politically objectionable countries and companies. The artificial limitation of the diamond supply on world markets on the scale of total Russian production cannot be compensated from other sources because of their absence. As a result, a possible short-term rush demand for diamonds from the remaining sources will be replaced by a sharp drop in supply, a slump in diamond prices, and accelerated replacement of natural stones by more affordable synthetics (LGDs), which, by the way, can be produced in unlimited volumes. This will clearly provoke a policy of price competition for survival and, as a result, a frankly vulnerable position of all players in the natural stones market. Responsible industry players from mining to cutting and jewellery production risk losing their businesses in a very short time, and the diamond mining countries of Africa - the industry that is vital to the socio-economic development of entire regions, and ensuring the well-being of local communities in the mining regions.

The Russian Federation will make every effort to mitigate the destructive impact of the rash actions of the West. We, as the world’s leading diamond-mining country, are well aware that if the attempts of Western countries to virtually destroy the KP were successful, then the diamond community would irrevocably lose the unique multilateral regulatory mechanism to which it is accustomed and which it rightly values, trying to further develop and improve. We will continue to join forces with friendly stakeholders in maintaining the effective operation of KP in the interests of our states and diamond mining regions, as well as the entire diamond market - diamond miners, cutters, traders and consumers who value gemstones that meet the highest industry standards.

Before the end of the year, we will certainly try to find a way to endorse the decisions approved by the KP participants by consensus during the Plenary Meeting in Zimbabwe, in order to ensure the effective functioning of the KP and preserve the achievements of the 2023 chairmanship. We also count on the balanced position of the UAE taking over as KP Chair in 2024. We are confident that with the support of the vast majority of African diamond-producing countries and Russia, Dubai, as the world’s leading diamond trading center, will be able to return the KP to the format of working in the interests of the industry and solving practical problems facing the forum; will ensure the solution of organizational issues of the development of the KP structure and functioning, including the launch of the work of the KP Secretariat and the election of the KP Chair for 2025. Moreover, as part of the fulfillment of our obligations under the KP Certification Scheme, we are preparing to host a KP review visit to Russia next year.

For your reference:

The Kimberley Process is a permanent intergovernmental forum aimed at preventing so-called “conflict diamonds” from entering legitimate international trade channels. Such diamonds are mined illegally and the proceeds are used by rebel movements or their allies to finance conflicts to undermine legitimate governments.

The Kimberley Process was established in 2000 and named after the city of Kimberley in South Africa, where the first international conference on conflict diamonds was held.

The initiative received the support of the UN and a WTO mandate.