Earlier this year, the Office of Foreign Assets Control (OFAC), the US Treasury Unit that oversees sanctions, froze the funds of two Indian diamond firms due to their alleged trade links with sanctioned Russian mining major ALROSA.
India has therefore asked the US to release the $26 mn belonging to Indian companies. The OFAC freeze is reportedly the first known punitive measure against any Indian business since the Russia-Ukraine war began in 2022, and the subsequent Western sanctions on Russian entities.
According to the report, OFAC froze the funds when UAE-based units of the Indian companies tried to transfer the amount to buy rough diamonds.
However, impacted Indian firms have told the Indian government that the payments were meant either for non-sanctioned Russian entities or completed before the sanctions on ALROSA came into effect in April last year.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
