Putin's diamond firm off the hook in EU sanctions

Alrosa had directly financed a new Russian naval submarine as well as feeding billions of euros a year into the Kremlin's war chest, the EU had said.

Russian president Vladimir Putin had also boasted that the majority-state owned firm gave him "serious" revenues.

But its name was cut over the weekend from a list of 29 individuals and seven entities to face an EU ban and asset-freeze, EU documents dated Monday (3 October) showed, as diplomats narrowed in on a deal.

And Alrosa stayed out of the final agreement on a new sanctions package nailed down in Brussels on Wednesday morning, diplomats said.

The Belgian foreign ministry declined to comment on the Alrosa U-turn, but it comes after Belgian diplomats and Antwerp Diamond Centre lobbyists had warned that striking at Russia's diamond exports would cost thousands of jobs in the city, which hosts the world's biggest diamond exchange.

The change of heart marks a defeat for the Baltic states, Ireland, and Poland, which had first endorsed a total diamond ban, then a non-industrial diamond ban, then the Alrosa listing, before backing down.

The new sanctions are to enter into force on Thursday.

They blacklist Russian ideologue Alexander Dugin, impose a price cap on Russian oil exports, and strike at Russia's steel and forestry industries in trade measures worth up to €7bn.

They come after Putin annexed four parts of eastern Ukraine and threatened to use nuclear weapons against anyone who attacked them — his most serious escalation since the invasion in February.

EU foreign affairs chief Josep Borrell and EU Commission president Ursula von der Leyen told MEPs in Brussels on Wednesday the sanctions would help stop the war in the end.

"History books" would show "a united Europe helped resist aggression by a radically different political organisation [Putin's Russia] to our own," Borrell said.

For his part, Ukrainian president Volodomyr Zelensky personally called for Belgium to ban Russian diamonds from Antwerp when the war first broke out.

But the EU's diamond U-turn is not the only time member states opted to protect jobs at home, instead of hitting harder at Russia's war economy and prestige symbols.

Malta secured a longer phase-out period on the Russia oil price-cap in the latest deal, sources said. Belgium and Italy got derogations on imports of some Russian steel products for up to two years.

Hungary also got an exemption from an EU phase-out of Russian oil imports earlier this year.