Russian diamonds bypass sanctions, flow to EU, US via Armenia

Russian diamonds continue to reach European and US markets despite sanctions imposed by the G7 and the European Union against Alrosa, the country’s largest diamond producer and one of the world’s leading industry players.

Investigations by OCCRP and European media have identified Armenia as a key transit hub, through which precious stones worth hundreds of millions of dollars are being channelled, Caliber.Az reports per foreign media.

European authorities acknowledge that diamonds often lose their traceable origin during the cutting process.

The main vehicle for the scheme is the First Diamond Company (FDC), established in Russia in May 2022. While formally independent from Alrosa, its owners and senior management have close ties to the state-run company.

FDC is owned by former Alrosa sales department employee Regina Sobol, and its first CEO was Evgeny Tsybukov, who previously worked for Alrosa Diamonds’ Moscow division. Since late 2022, FDC has actively exported diamonds to Armenia.

According to OCCRP, nearly half of all diamonds imported into Armenia originate from Russia. Between January 2023 and March 2024 alone, FDC shipped diamonds worth more than $290 million.

Through Armenia, Russia has maintained supplies to major global industry players, including the Indian jewellery conglomerate KGK Group. Prior to 2022, KGK openly traded with Alrosa, but following the outbreak of the war, the group removed references to Russian projects.

A key FDC partner is Imperial Diamond, whose principal founders are UAE-based Glowmore DMCC and Indian-born Russian citizen Ramani Vitthalbhai Vallabhbhai, linked to KGK Group. Pavel Vinikhin, a former Alrosa asset manager, serves as director.

Documents from 2024 indicate that Imperial Diamond purchased diamonds from FDC and Armenian companies ADM Diamonds and Fancy Jewellery. These stones were processed and frequently returned to the same companies. During cutting, the diamonds lost their Russian origin and were subsequently shipped to the EU and the US.

Significant volumes of Russian diamonds also move via Indian firms Gloria Gems Trading and Mohit Diamonds. Gloria Gems is affiliated with KGK Group and jewellery houses in Belgium and the UAE, while Mohit Diamonds, a former direct partner of Alrosa, supplies 20% of its product to the US and 8% to Belgium. Total turnover between FDC and the three main intermediaries — Imperial Diamond, Gloria Gems Trading, and Mohit Diamonds — exceeds 270 billion roubles.

In addition to FDC, Alrosa has set up several other entities to bypass sanctions. These include Trading Horizons, registered in February 2024 with former Alrosa employees as directors, and Diamond Trading House (DTH), established in November 2022 by Elena Smirnova of Alrosa’s unified sales company.

Though formally independent, these companies remit revenue to Alrosa under agency agreements. DTH’s largest clients include Enso Global Trading, which has signed more than 200 contracts worth over 30 billion roubles. Through these structures, Russian diamonds continue to reach Europe and the United States.

By Aghakazim Guliyev