Russian diamonds may be entering Australia through intermediaries and processing hubs despite sanctions on Moscow’s state-owned diamond giant Alrosa, The Sydney Morning Herald reported, citing a new report by Transparency International. 

The report argues that Australia faces a “real and ongoing risk” that parts of its economy are helping fund Russia’s war effort, pointing to alleged loopholes that still allow Russian crude oil, “dirty money,” and diamonds to reach Australian markets, the newspaper said. 

Russia remains the world’s largest producer of diamonds and earns billions of dollars annually from the industry, the Herald reported, adding that experts say stones are being diverted into “softer markets” that did not follow the G7 and European Union in banning Russian diamonds outright, including Australia. 

While some major brands such as Tiffany’s have publicly boycotted Russian diamonds, industry figures acknowledge retailers often cannot identify provenance because stones can be cut and polished in hubs such as India and Dubai and re-enter markets with new paperwork, according to the report. 

Clancy Moore of Transparency International Australia told the newspaper that, once refined abroad, Russian stones can be described as originating from those processing countries. 

“Diamonds are the regime’s best friend,” Moore told the Herald.

Australia has sanctioned Alrosa but did not impose an outright ban on Russian diamonds or introduce strict proof-of-origin requirements like those that, as of this year, track some stones using 3D scanning and blockchain ledgers, according to the news agency.

The Transparency International report also highlights broader sanctions and illicit-finance concerns beyond diamonds, including the case of Australian miner Tigers Realm, which continued extracting coal in Russia after the invasion of Ukraine and paid millions in taxes to the Russian government. 

A federal court ruled in 2024 that Tigers Realm breached sanctions, but authorities have not penalized the company and its efforts to sell its Russian operations remain stalled pending approval from Putin.

Reaad more at The Sydney Morning Herald

Read the TI Australia report here