India firmly demands release of funds of its firms frozen over ties with Russia’s Alrosa
“The government is aware of the OFAC action and has initiated dialogue over it. The problem was suspicion of trade links with Alrosa,” one of the sources told the paper.
India has firmly asked the United States to release $26 mln belonging to at least two Indian diamond firms frozen due to their alleged trade links with Russia’s diamond producer Alrosa, which has been blacklisted, the Economic Times newspaper wrote citing sources.
The Office of Foreign Assets Control (OFAC), the US Treasury unit that oversees sanctions, unilaterally froze the funds earlier this year, according to two sources among Indian government officials who declined to identify themselves or the companies.
OFAC froze the funds when UAE-based units of the unspecified Indian companies tried to transfer them to buy rough diamonds, the newspaper said.
“The government is aware of the OFAC action and has initiated dialogue over it. The problem was suspicion of trade links with Alrosa,” one of the sources told the paper.
The Indian firms hit by the action have told the government that the payments were meant either for non-sanctioned Russian entities or for orders completed before the sanctions on Alrosa came into effect in April last year, the source said.
India has the world’s largest diamond processing capacity and exported polished diamonds worth more than $22 bln last fiscal year that ended on March 31.
The industry, based mainly in the western state of Gujarat, buys rough diamonds from suppliers in countries such as the United Arab Emirates, Belgium and Russia. The Russian company was one of the leading suppliers of rough diamonds to India.
Now if similar action of fund freezing is initiated against few USA firms operating in India, then thongs will take a turn for the worse in bilateral relationship.
