Expanded Ban on Russian Diamonds

Summary#

The final rule titled Regulations Amending the Special Economic Measures (Russia) Regulations: SOR/2024-172 tightens Canada’s ban on certain Russian diamonds. It makes it illegal to import, buy or acquire many natural diamonds mined or produced in Russia that were exported or processed in a third country if they weigh 0.5 carat or more, and it came into force on September 1, 2024.

What it does#

• Prohibits people in Canada and Canadians abroad from importing, purchasing or acquiring natural diamonds of Russian origin (including those exported, processed or polished in a third country) that weigh 0.5 carat or more.
• Keeps an earlier phase that already banned indirect imports of diamonds weighing 1.0 carat or more (that started on March 1, 2024).
• Creates a “legacy diamonds” exemption so diamonds of Russian or unknown origin are allowed if they were already outside Russia before the relevant ban phase:
  • diamonds 1.0 carat or larger that left Russia before March 1, 2024, and
  • diamonds 0.5 carat or larger that left Russia before September 1, 2024.
• Updates which diamond categories (HS codes 7102.10, 7102.31, 7102.39) are covered and adjusts the lists in Schedule 12 of the regulations.
• Allows border officers to request documents showing diamond origin or that a diamond qualified as a legacy item. Existing Kimberley Process Certificates can be used as part of that evidence.
• Notes enforcement authorities (including the Canada Border Services Agency (CBSA) and the Royal Canadian Mounted Police (RCMP)) can apply penalties: summary conviction fines up to $25,000, imprisonment up to one year, or, on indictment, imprisonment up to five years.

Who's affected#

• Diamond importers, wholesalers, retailers and jewellery manufacturers who bring diamonds into Canada, or Canadians buying diamonds abroad.
• Customs brokers and freight forwarders who handle diamond shipments and related paperwork.
• Small Canadian businesses in the diamond and jewellery supply chain; they may face extra paperwork or need proof of origin.
• Government agencies involved in enforcement and trade oversight, notably Global Affairs Canada (GAC) and the Canada Border Services Agency (CBSA).
• Consumers could be affected indirectly if supply, price, or availability of certain diamonds changes.

Why it matters#

• The change aims to reduce money flowing to Russia from diamond exports — Russia’s diamond sector earned over $5 billion in 2023 — as part of a coordinated G7 effort to limit revenue used to fund the war in Ukraine.
• Businesses that import diamonds will likely need to show more documentation at the border. That can mean extra time and administrative costs, and possibly sourcing diamonds from different suppliers.
• The legacy exemption prevents sudden losses for businesses holding stock that left Russia before the ban phases. That eases the financial hit on the Canadian diamond sector while keeping the pressure on current Russian exports.
• For everyday buyers, the most visible effects would be through changes in availability, paperwork when importing, or potential price shifts for affected diamonds.