USA freeze $26M from Indian Diamond Firm Upon Russian Connection

US Freezes $26 Million in Offshore Transfers Linked to Indian Jewellers’ Rough Diamond Imports

In a significant move, the US Office of Foreign Assets Control (OFAC) has taken action against a series of offshore companies owned by Indian jewellers, freezing approximately $26 million (₹215 crore) worth of fund transfers. The freeze is said to be targeting entities allegedly engaged in the import of rough diamonds sourced from Russia, a move that has sent ripples through the diamond industry.

According to a report by The Economic Times, the OFAC’s action has primarily impacted the United Arab Emirates (UAE) subsidiaries of Indian diamond houses. The offshore accounts of these subsidiaries, dealing with dollar transactions, have been subjected to the freeze due to suspicions of connections with Russian miners and entities facing sanctions.

As a direct consequence of this clampdown, the dollar payments that were meant to be processed through these UAE subsidiaries have been put on hold. Sources suggest that the US authorities have instructed banks managing the nostro accounts of the diamond suppliers to refrain from executing the intended payments to the entities facing scrutiny.

The move comes as part of OFAC’s focused efforts on entities involved in the import of rough diamonds, specifically those sourced from Russia. The precise details of the entities targeted and the nature of their alleged connections are yet to be disclosed.

While this development is believed to have substantial implications for the Indian diamond industry, it is also expected to impact the broader trade relationships between India, the UAE, and Russia. The exact extent of the impact remains to be seen, as market stakeholders assess the potential ramifications.

It is important to note that these actions by the OFAC could have far-reaching consequences for not only the entities directly involved but also for the global diamond supply chain. The freezing of substantial fund transfers underscores the growing vigilance of international authorities in monitoring financial transactions that might have links to sanctioned activities.

LiveMint’s efforts to independently verify these developments have been inconclusive as of now. However, the reported freeze on offshore transfers sends a clear signal that regulatory bodies are actively scrutinizing the diamond trade for potential connections to sanctioned entities.

The implications of these actions will likely unfold over the coming weeks as industry experts, regulatory bodies, and affected entities assess the situation and respond accordingly. As the global diamond industry navigates these challenges, stakeholders will be closely monitoring the unfolding events and their potential impact on trade relationships and market dynamics.

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