The Russian government has placed a temporary hold on the negotiations between South Africa’s De Beers Corporation and Russia’s Almazy Rossii-Sakha diamond company (ARS) over the sale of Russia’s export diamonds. (Itar-Tass, AP, November 5) Under a draft deal negotiated with De Beers last month, ARS would sell a minimum of 85 percent of its production through the Central Selling Organization, the cartel controlled by De Beers. But now the Russian government’s emergency tax commission says it wants to audit the negotiations and claims to have discovered tax fraud and violations of currency regulations by ARS. The company, which mines about 96 percent of Russia’s diamonds, is state-owned but largely controlled by local authorities in the autonomy-minded Republic of Sakha (Yakutia) in north-eastern Russia. There are suspicions that the cash-strapped Russian government would like to reassert central control over the company, seeing it as a handy source of revenue, and may resume negotiations with De Beers itself.