OFAC sanctions: India asks US to release ₹215 crore, frozen from Indian diamond cos due to alleged Russia connection
₹215 crore) belonging to two prominent Indian diamond companies, Reuters has reported citing government sources. These funds were frozen in relation to alleged trade connections with the Russian diamond giant Alrosa, which has been subjected to sanctions by the US Treasury's Office of Foreign Assets Control in April 2022. It was the first instance of punitive actions being taken against any Indian business in the aftermath of Russia's military intervention in Ukraine, coupled with subsequent sanctions imposed on Russian entities by Western nations.
Sources have revealed to Reuters that the frozen funds were in the process of being transferred by UAE-based subsidiaries of the aforementioned Indian enterprises for the purpose of acquiring rough diamonds. However, banks intervened and suspended the dollar transaction, in what seems to be a precautionary measure undertaken to ascertain the legitimacy of the transaction and ensure adherence to existing sanctions, Reuters sources revealed. Reuters could not determine if the money was being transferred to Alrosa or another party.
"The government is aware of the OFAC action and has initiated dialogue over it," Reuters quoted one of the Indian government sources as saying, without identifying the U.S. counterparty. "The problem was suspicion of trade links with Alrosa." The Indian firms impacted by the action have told the government the payments were meant either for non-sanctioned Russian entities or for orders completed before the sanctions on Alrosa came into effect, the source said.
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