The USA froze the assets of the first Indian diamond companies for cooperation with the Russian “Alrosa”
India has asked the United States to unblock $26 million belonging to at least two Indian diamond firms that have been frozen over their alleged trade links with sanctioned Russian diamond company Alrosa.
Reuters writes about this with reference to three sources in India.
The Office of Foreign Assets Control (OFAC), the US Treasury arm that oversees sanctions, froze the funds earlier this year, two sources told the publication. Both are Indian government officials, but declined to identify themselves or the companies, citing the sensitivity of the matter.
The OFAC freeze is the first known punitive measure against any Indian business since Russia’s full-scale invasion of Ukraine last year and subsequent Western sanctions against Russian businesses.
OFAC froze funds when units of unidentified UAE-based Indian companies tried to transfer them to buy rough diamonds. Reuters could not determine whether the money was transferred to Alrosa or another party.
“The government is aware of OFAC’s actions and has started a dialogue about it,” said one Indian government source. “The problem was the suspicion of trade relations with Alrosa,” he explained.
Indian firms affected by OFAC’s action told the government that the payments were either to Russian companies not subject to sanctions or for orders placed before sanctions against Alrosa took effect last April, the source said.
India has the world’s largest diamond processing capacity and exported over $22 billion worth of diamonds in the last fiscal year ended March 31. The industry, based mainly in the western state of Gujarat, buys rough diamonds from suppliers in countries such as the United Arab Emirates, Belgium and Russia.
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