PRESS: Russian diamond cutters ask for government support

MOSCOW, Jul 8 (PRIME) -- Russian diamond cutters require large-scale government support ahead of the abolishment of a 6.5% export duty on diamonds slated for September 1, Kommersant business daily reported Friday citing a letter of Maxim Shkadov, CEO of diamond cutter Kristall, to Deputy Finance Minister Alexei Moiseyev.

Russia is abolishing the export duty in line with an agreement with the World Trade Organization (WTO), which is putting Russian diamond cutters in unequal competition conditions, Shkadov said. At present, the duty compensates Russian diamond cutters for conditions of making business as compared with their rivals in India, and with the abolishment of the duty the balance will be disrupted.

Shkadov believes the government should either keep the export duty or introduce new protective mechanisms, for instance consider differentiating the size of duty depending on the size and weight of exported diamonds, the daily said.

Moiseyev confirmed receiving the letter and said the government will provide support to diamond cutters, but certain support measures have not been defined yet.

Russia annually produces over 300,000 carats of diamonds worth at least U.S. $500 million and exports over 90% of the output.

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