Italy fights to exclude luxury goods from EU’s Russia sanctions

Italy has managed to carve out an exclusion for Italian luxury goods including diamonds and products such as Gucci, Prada and Versace from the European Union’s proposed economic sanctions against Russia, say reports.

Joe Barnes, Brussels correspondent for The Telegraph, tweeted that Italian Prime Minister Mario Draghi had successfully protected the country’s lucrative luxury goods industry.

"Apparently selling Gucci loafers to oligarchs is more of a priority than hitting back at Putin," his source said. 

Italian prime minister Mario Draghi successfully secured a carve out for Italian luxury goods from the EU's package of economic sanctions against Nato, EU dip tells me. 'Apparently selling Gucci loafers to oligarchs is more of a priority than hitting back at Putin,' source adds.

— Joe Barnes (@Barnes_Joe) February 25, 2022

Italy has historically had had a closer relationship with Russia than other European countries, which is a major market for Italian luxury fashion.

Exports of Italian luxury goods to Russia totaled 1.3 billion euros in the first 11 months of 2021 alone, reported The Local Italy, citing data from the Italian Trade and Investment Agency.

Barnes also tweeted that Belgium’s diamond business was also not included in the package of sanctions.

Belgium's diamond industry is also not included in the package of sanctions, but wider point is Mario Draghi lobbied to ensure luxury goods were kept out, and is still lobbying to make sure they're not included in future package of sanctions.

— Joe Barnes (@Barnes_Joe) February 25, 2022

More than 1 billion euros of Russian diamonds passed through the Belgian port of Antwerp in 2020, according to The Brussels Times.

ALROSA, Russia’s state-owned diamond mining company, is the global leader in mining rough diamonds, and 86% of rough diamonds pass through Belgium, said the Antwerp World Diamond Centre.

“Sanctions can have a significant impact on the diamond business,” Tom Neys, spokesperson for the Antwerp World Diamond Centre, told the Gazet van Antwerpen on Wednesday (before the Russian invasion).

“It is a blow that should hurt Russia but there is a chance that we do more damage to ourselves. The Russians can easily trade their diamonds with non-EU countries.”