19 December 2025
EC ¦ Consolidated Version of the FAQs concerning Sanctions Adopted Following Russia’s Military Aggression Against Ukraine and Belarus' Involvement in it
EU Diamond Ban, Diplomatic Controls and Special Economic Zone Rules – What Financial Crime Professionals Need to Know
The European Union’s consolidated FAQs on sanctions against Russia, updated through December 2025, set out detailed operational rules that matter for compliance, risk assessment and investigations. Three interlocking areas are particularly relevant for financial crime practitioners:
- the phased diamond import ban and traceability regime,
- new notification and authorisation rules for movements of Russian diplomatic personnel, and
- prohibitions and withdrawal obligations relating to certain Russian special economic zones.
Understanding the documentary requirements, certification channels, grandfathering rules and enforcement exposure is essential for transaction monitoring, client due diligence, trade-finance screening and sanctions risk remediation.
The diamond sanctions – phased implementation and traceability requirements
The EU’s diamond measures are part of a G7-coordinated effort to deprive Russia of significant revenues and were introduced in stages beginning 1 January 2024. The prohibitions target non-industrial diamonds – natural and synthetic – and jewellery incorporating diamonds when those goods originate in or have been exported from Russia, or have transited Russia. Subsequent stages extended the reach to diamonds processed in third countries, progressively lowering carat thresholds and bringing polished stones within the scope of traceability requirements. By late 2025 the regime requires robust documentary evidence for imports at or above the 0.5 carat threshold, and the framework anticipates full mandatory traceability and certification for polished diamonds from 1 January 2026, while recognising the continued use of documentary evidence in cases where international coherence on traceability remains insufficient.
For financial crime investigators and compliance teams, the diamond rules change the evidential landscape for trade-related exposures. Imports of rough diamonds above specified thresholds must pass through a designated verification node in Antwerp, where the Belgian Diamond Office acts as the designated Authority and issues G7 certificates or records grandfathered stocks. KP certificates remain relevant but are no longer sufficient where they do not explicitly state countries of mining origin. Mixed-origin documentation without clear country-of-origin details is subject to stricter verification. Polished diamonds require a Due Diligence Statement on Diamond Origin (DDS) supported by invoices, transport documentation, grading reports or extracts from traceability platforms. Synthetic diamonds require supplier attestations that they were not manufactured in Russia, together with standard shipment documentation.
Grandfathering, certification and practical risks
Operators that held stocks prior to the relevant ban stages can in many cases rely on grandfathering, provided they document the physical presence or processing dates and satisfy the evidential conditions. Grandfathered items do not automatically receive a G7 certificate, but operators can request inspection and a GF number from the Belgian Authority to facilitate later re-entry to the EU. For compliance teams, the grandfathering option creates record-keeping and verification obligations; inadequate documentation could expose firms to enforcement scrutiny or create de-risking pressure by banks and insurers.
The ban’s verification architecture introduces concentrated control points and potential chokepoints for trade finance and correspondent banking. Antwerp’s role as the rough-diamond node means that customs filings, import declarations and the 35-digit G7 certificate identifiers are data elements that should be integrated into transaction monitoring and alert scenarios. Payment flows tied to diamond shipments, or trade-finance instruments that reference KP or G7 documentation, require specific checks to confirm that certificates are present and that mining origin is properly declared.
Due diligence requirements and industry standards
The Due Diligence Statement on Diamond Origin is anchored in traceability and due-diligence norms – ISO 22095, OECD guidance and Kimberley Process practices – and requires firms to demonstrate reasonable verification steps and internal controls. From a financial crime perspective the DDS is both a compliance control and a potential source of evidentiary risk: false or incomplete statements, aggregation of diamonds of unknown origin with traceable goods, or weak supplier attestations may indicate laundering, misclassification or circumvention. Compliance functions should treat DDS submissions, KP certificates and any G7/GF numbers as primary evidence, and design enhanced due diligence processes where trade patterns, counterparties or jurisdictions suggest elevated risk.
Implications for banks and service providers
Banks, insurers, brokers and trade-service providers must adapt screening, onboarding and transaction monitoring rules. Screening needs to capture CN codes listed in the regulation, references to KP, G7 and GF certificates, and the documentary requirements for polished and synthetic diamonds. Transactional red flags include payment routing through jurisdictions linked to diamond processing chains, repeated use of mixed-origin KP certificates without clear mining origin, and last-minute changes in shipment routing that suggest attempts to route goods through Russia or a prohibited SEZ.
Risk teams should also prepare for operational challenges. The phased nature of the ban and grandfathering provisions mean that historical trades may be legitimate while similar-looking transactions after an effective date are prohibited. Case management workflows must therefore preserve provenance documentation and track certifying numbers. Trade finance facilities, letters of credit and insurance policies tied to grandfathered stocks require careful review to ensure that present and future imports do not breach the ban.
Diplomatic movement rules – notification, authorisation and enforcement considerations
The consolidated FAQs also explain the notification regime under Article 5v and the possible national authorisation schemes under Article 5w that apply to Russian diplomatic and consular personnel travelling to or transiting through Member States on the basis of accreditation or visas issued by another Member State. The notification requirement applies from 25 January 2026 and generally requires notification at least 24 hours before entry, typically via a Note Verbale through diplomatic channels. The authorisation option allows Member States to require specific approval for such travel, subject to procedural safeguards and prior Council notification.
For financial crime practitioners the diplomatic movement rules matter for two reasons.
First, they create additional data points for context and intelligence when reviewing cross-border activity tied to diplomatic missions. Travel notifications and authorisation logs can corroborate or contradict declared travel that underpins transactions, shipments or cash movements.
Second, breaches of notification or authorisation obligations may trigger national-level penalties and can be an indicator in broader assessments of sanctions evasion or illicit activity. Where immunity does not apply – for example when individuals travel outside the scope of accredited official functions – national authorities may apply penalties and a failure to notify or obtain an authorisation can produce enforcement outcomes that intersect with financial investigations.
Special economic zones – withdrawal obligations and divestment risks
Article 5ah targets selected Russian special economic, innovation and preferential zones that are assessed to support the Russian military-industrial base. The Regulation separates zones into two lists. For Part A zones – which include major facilities such as Alabuga and Technopolis Moscow – EU operators are required to withdraw entirely and discontinue participation, contracts and arrangements. From 25 January 2026 EU parties must take reasonable and feasible measures to exit, stop operational involvement and cease financing or investment services connected to the restricted activities. For Part B zones operators may maintain existing arrangements but are barred from new investments, expansions or activities that deepen presence.
The rules impose both immediate commercial risks and complex remediation duties for firms with historical operations in affected zones. Practical problems include forced transfers by Russian authorities, nationalisation, restrictions on repatriation of assets or blocked corporate registries that impede formal divestment. The FAQs explicitly recognise these scenarios and instruct operators to document exit attempts, cease managerial or oversight involvement and avoid further benefits to the SEZ entities or the Russian state. Competent authorities can consider narrow authorisations to enable removal, neutralisation or disposal of assets where necessary for an orderly withdrawal, but transfers that would enable continued use of controlled goods or technology within the SEZ remain subject to strict scrutiny.
For AML and sanctions teams the SEZ rules raise several priority concerns.
First, ownership or control chains that include entities located in, or controlled by, SEZ-based players should be flagged in KYC systems and treated as high-risk. Banks should map ultimate beneficial owners, voting rights and contractual ties to SEZ entities, and apply enhanced due diligence where there is any direct or indirect exposure.
Second, financing and investment services related to activities connected to Part A or Part B SEZs are restricted; transaction monitoring models should treat such beneficiary or counterparty links as potential sanctions hits, even where the counterparty is formally outside an SEZ but owned or controlled by an SEZ entity.
Third, disposals or sales to buyers must be assessed against the Regulation’s prohibition on transfers to sanctioned persons, their controlled entities, or purchasers likely to confer economic or technological benefit to the SEZ or the Russian state. Authorisations that permit a sale should be assumed to carry conditions and post-closing compliance obligations.
Operational and investigative takeaways
Financial crime practitioners should treat these FAQs as an operational roadmap. Immediate steps that teams should consider include
- integrating new CN-code and certificate checks into sanctions screening;
- updating KYC questionnaires and enhanced due diligence scripts to capture diamond provenance attestations, G7 and GF numbers and DDS documentation;
- mapping correspondent banking and trade finance exposures tied to diamond trade routes; and
- flagging client relationships and ownership chains linked to SEZs for case escalation.
Investigators should also calibrate intelligence collection to the revised evidential standards. KP certificates without explicit mining origin, supplier attestations unbacked by traceability data, and shipments routed through known diamond-processing hubs or intermediary jurisdictions may warrant deeper transactional and open-source scrutiny. Similarly, when clients claim grandfathering status, compliance teams must insist on documentary proof of physical presence or processing dates pre-dating the relevant ban stage, and, where applicable, confirmation of inspection and GF numbering from the designated Authority.
Conclusion
The EU’s evolving sanctions architecture around diamonds, diplomatic movement and special economic zones tightens the compliance perimeter in both trade and financial services. The phased diamond restrictions, the importance of KPI-style documentary proof, the central role of verification in Antwerp and the obligations to withdraw from selected SEZs create measurable obligations for banks, insurers, trade finance providers and compliance functions. Financial crime teams that rapidly incorporate these documentary standards and control points into screening and due-diligence workflows will be better positioned to detect circumvention, manage exposure and support lawful divestment efforts while avoiding enforcement risk.
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The EU Sanctions Helpdesk platform supports European operators in complying with European Union restrictive measures (also known as sanctions) imposed worldwide.
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