India has formally requested the United States to release approximately $26 million held in accounts belonging to at least two Indian diamond companies, which were frozen due to alleged trade associations with the sanctioned Russian diamond giant, Alrosa. This information was conveyed by three reliable Indian sources.
The Office of Foreign Assets Control (OFAC), the division of the US Treasury responsible for overseeing sanctions, imposed the freeze earlier this year, according to two of the sources. Both of these sources hold positions within the Indian government but have chosen to remain anonymous, citing the sensitivity of the matter.
This move by OFAC marks the first documented punitive action against any Indian enterprise since Russia’s comprehensive invasion of Ukraine last year, which subsequently led to Western sanctions being imposed on Russian entities.
The funds were frozen by OFAC when certain UAE-based subsidiaries of the Indian companies in question attempted to transfer the funds for the purpose of procuring rough diamonds. It remains uncertain whether the intended recipient of the funds was Alrosa or another party.
An Indian government source revealed, “The government is cognizant of the OFAC’s action and has initiated discussions concerning it. The issue revolves around suspicions of trade connections with Alrosa.”
The Indian companies affected by the sanctions have informed the government that the funds were intended either for non-sanctioned Russian entities or for orders that were completed prior to the imposition of sanctions on Alrosa in April of the previous year.
