“….doing business with Russia, increase Russian revenues and ultimately Russian military budget in the ongoing war with Ukraine.” – Ukrainian National Agency on Corruption Prevention said.
In a startling revelation, the Ukrainian National Agency on Corruption Prevention announced on Friday that Shree Ramkrishna Exports (SRK), a prominent Mumbai-based diamond firm, has been named an “international war sponsor“. This drastic step by Ukraine stems from allegations that SRK has exponentially increased its diamond dealings with Russia this year.
Ukrainian NACP’s List of International Sponsors of War
According to the information available on the website, the International Sponsors of War list is maintained by the Ukrainian National Agency on Corruption Prevention (NACP) in connection with the Russo-Ukrainian War, particularly the Russian invasion of Ukraine. As of August 2023, the list includes 36 companies from 15 countries and 170 individuals who, by doing business with Russia, increase Russian revenues and ultimately Russian military budget in the ongoing war with Ukraine.
“NACP is the body responsible for implementing the compliance system in the private sector. During compliance procedures, counterparties must undergo integrity checks, including socially responsible business conduct in accordance with OECD standards. The “International War Sponsors” project is a powerful reputational tool for achieving the benevolence of elements of global supply chains, and the exit of international business from Russia. This, in turn, will reduce Russia`s financial and technological ability to kill Ukrainians.”, the Ukraine government website said.
“ISW designation is reputational only. Ukraine does not control the enforcement: it is the global community who acts as the judge, jury, and executioner,” it said.
Escalating Numbers
Ukraine’s distress over the Indian company‘s activities centers on a drastic uptick in transactions. It’s reported that SRK’s diamond purchases from Russia in 2023 almost tripled in comparison to its 2021 figures. To put numbers into perspective, SRK’s expenditure for Russian diamonds leaped from $59 million in 2021 to a staggering $132 million in just the first half of 2023.
Ramifications and Repercussions
The direct implications of this classification on SRK remain uncertain. However, SRK Exports isn’t just any diamond firm. Holding a prominent global position, it processes diamonds sourced from renowned Western giants like De Beers, Arctic Canadian Diamond Company, and Rio Tinto, among others. The company, akin to numerous other Indian diamond powerhouses, specializes in cutting, polishing, and classifying diamonds prior to export.
G7’s Stance on Russian Diamonds
The G7 nations, in a pronounced move during the Hiroshima Summit this year, pledged to curtail trade associated with diamonds mined or processed in Russia. They also emphasized the inception of “tracing technologies” to determine diamond origins.
India’s Delicate Position
The Indian diamond industry, with a significant portion of its processed diamonds destined for G7 nations, finds itself in a precarious situation. These restrictions on Russian diamond exports have inadvertently placed immense strain on Indian workers, as documented by sources like Sputnik. With a heavy reliance on Russian imports, many Indian diamond businesses and their employees are grappling with potential economic downturns.
India’s Prime Minister, Narendra Modi, even personally intervened, urging the G7 nations to acknowledge the dilemmas faced by the Indian diamond sector due to Russian diamond sanctions. This appeal was disclosed by India’s External Affairs Minister, S. Jaishankar.
In terms of sheer data, diamond exports from Russia to India have showcased an upswing, registering a 35% year-on-year increase to touch $616 million in the initial half of this year. New Delhi’s consistent message to affluent nations is evident: the repercussions of the Ukraine crisis, though seemingly distant, disproportionately affect the Global South compared to the more developed nations.
Criteria for Identifying an International Sponsor of War (ISW)
The concept of an International Sponsor of War (ISW) is intricate and layered, particularly when attempting to discern the underlying factors or criteria used to identify a company as such. Delving deeper into the commonly observed aspects:
Company Origin: A primary characteristic of a firm labeled as an ISW is its foreign, especially non-Russian, origin. This highlights that even companies from nations that might publicly condemn conflicts could, directly or indirectly, be facilitating or benefiting from them.
Business Magnitude and Reach: The nature of an ISW’s business operations is vast and expansive. Possessing a well-known brand name suggests not just size but also influence. An international footprint means that decisions have repercussions in multiple jurisdictions, making these entities significant players on the global stage.
Involvement in Russia’s War Efforts: This aspect is perhaps the most contentious of the criteria. Support for Russia’s war actions isn’t always overt. While some companies might be directly involved by supplying goods, materials, or services, others may indirectly assist merely by fulfilling their tax obligations, which could potentially fund the war. Additionally, participation in propaganda or mobilization campaigns amplifies the war’s narrative, shaping public perception and potentially garnering support for the cause.
Position Regarding the Russian Market: A company’s decision, or lack thereof, concerning its operations in Russia during conflict times provides insight. Silence or ambiguity on the matter might be perceived as tacit approval or a strategic move to safeguard business interests. Conversely, publicly justifying the choice to stay in Russia could be viewed as aligning with or benefiting from the ongoing conflict.
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