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US blocks US$26m of India diamond payments to Russia

Offshore subsidiaries of Indian diamond merchants have had fund transfers worth almost $26m frozen after US authorities claimed the rough diamonds were mined in Russia. The Office of Foreign Assets Control (OFAC) singled out UAE subsidiaries of Indian jewellers it claims have connected suppliers with Russian investors.

OFAC is said to have instructed banks in recent months to halt the transfer of funds, mostly from UAE subsidiaries of Indian companies.

GJEPC is lobbying the Indian Ministry of Commerce and the Indian embassy in the UAE to resolve matters.

Vipul Shah, chairman - GJEPC, told Economic Times: "We are trying to explain to OFAC that the payments were made to non-sanctioned entities and even to some Russian entities well before the sanctions came into place. There is very little direct import of diamonds from Russia."

Neither India nor the UAE has sanctioned rough diamonds from Russia.Leaders of the G7 nations concluded their summit in Hiroshima, Japan, in May without the clear mandate to fully sanction Russian diamonds that many had expected.

Source: Economic Times, idex

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