Brussels Theft is A Warning Sign

The diamond theft at Brussels’ Zaventem Airport is more a cautionary tale than a story of financial harm. The estimated $50 million loot does have a financial aspect to it, and is a great story for those not involved, but underneath it brews a frightening reality of lax security procedures and easy access in an age of international terrorism seeking sensational international headlines.

Most of the details about the theft are still unpublished, but here are a few key facts. A team of eight entered the airport grounds through an open gate along the perimeter of the airfield, drove quickly under the cover of darkness to the passenger plane, reaching it after the goods were already aboard.

The men, described as heavily armed, collected the goods at gunpoint and drove off, leaving the airport grounds through the same gate, 10-11 minutes after entering. They spent a mere three minutes by the plane.

Diamond shipments are a regular, daily occurrence around the world. The ways and methods of shipping diamonds are tried, and matters usually operate like clockwork. In Antwerp, goods are submitted to the Diamond Office, handed over to the shipping companies (in this case, Malca-Amit, Brinks, Ferrari and G4S) and sent to Zaventem airport to be stored at the vaults services operated by Brinks. An armored Brinks vehicle then transfers the diamonds, gold, jewelry, banknotes and other high-value items from the vaults to the out-going planes.

Once the passengers and the rest of the cargo are on the plane, the armored vehicle arrives and loads the goods with an airline official overseeing it. Once onboard, the cargo hold is closed and the plane takes off.

The transfer is the window of opportunity, and it lasts only about 10 minutes. The thieves need to know where the plane is located on the airport’s ramp and exactly when the armored car opens. Arriving early or late means the goods are out of easy reach.

One security failure in the Monday heist was the information leak: Knowing where the plane is located and when to arrive to catch the goods in the open. The long list of failures, however, is far worse.

How can a team reach an airport fence, open a gate and enter undetected by security? How can a van and a sedan drive through the airport without the tower noticing somebody that is not supposed to be there? Why is the field dark at night? Why isn’t the security detail at the plane not carrying concealed alarms that will allow them to instantly alert airport security, thus giving time to lockdown the airport? Why wasn't a police helicopter lifted off right after the theft?

Tens of billions of dollars worth of diamonds and other high-value items pass through the airport on the outskirts of Brussels every year. But as noted, the economic side is not the main issue.

Just Money?
If the daring armed heist exposed anything, it shows how easy it is to enter an airport that meets the highest European security standards, reach a very specific passenger plane, pull out assault weapons, and then get away undetected.

A security expert with "a hand in this game" told IDEX Online that the goods were already on the plane and that some of them were left behind. Just as they took 120 parcels of rough and polished diamonds without anyone around or in the plane noticing, they could have placed a package inside the plane. Bomb on an airliner anyone?

And yes, this is the issue, as we are allowing ourselves to be submitted to ridiculous requirements to remove our shoes and hold our toothpaste in a clear bag when passing through airport security, under the understanding that this improves our safety.

Why are we doing it if any Hezbollah operative with an ounce of initiative could bypass it all with such little effort and blow up a passenger plane with hundreds of people onboard? Only recently they blew up a tour bus at an airport in Bulgaria.

In 2005, a similar heist took place at Schiphol Airport in Amsterdam. Two weeks before, suspicious activity was detected by security around the airport. Did the Amsterdam theft crew conduct a dry run? Obviously, some pre-planning took place. Why were preparations before the Brussels heist not detected? The Amsterdam lessons were not learned. There, a team entered the airport in a car, hijacked the armored vehicle, and left with $100 million worth of goods.

There is talk right now, with the airport and government, to upgrade the airport security. A person very close to the talks said today, "It's about human failure." The security expert agrees. "How you screen and train your guys is the basics. You have to constantly change routines, test your team, shift people around."

Will the lessons be finally learned, now, before another terrorist attack takes place on European soil and claims precious lives, not just precious goods? We can only hope so. The loopholes are excessively big and inviting.

Epilogue
1. It was months before any arrests were made following the Amsterdam heist. It may be a while this time around too.

2. There is a debate about the value of the booty. Initial reports stated €350 million (we reported that figure too); the Antwerp World Diamond Centre places the figure at $50 million. We understand that one of the shipping companies reported more than $28 million worth of goods; another was just shy of $20 million. The two other companies had about $1-$3 million together. In all likelihood the haul included, in addition to diamonds, other valuables such as precious metals. This means that diamonds constituted less than $50 million, maybe $40 million. They were heading to Mumbai, Tel Aviv, Hong Kong and Bangkok.

3. The stolen rough and polished diamonds can easily return into the legitimate stream after being polished (some of the goods were returning from the HRD Antwerp grading lab). Sadly, this requires the cooperation of someone in the diamond industry.

However, the goods don't have to return quickly into the legitimate trade. Terrorists and criminals need a method to pass money around and make payments off the grid. Sadly, diamonds work well into that need.

4. There is no financial impact on the trade or Antwerp, except possibly higher insurance costs. The stolen goods represent a fraction of a percent of the annual global wholesale diamond trade. The underwriter Lloyds, used by all four involved shippers, is footing the bill. It will reassess the risk and hike rates, maybe significantly.

5. Bottom line, diamond traders are being paid quickly (Brinks paid their clients already) and in full for their stolen goods and are satisfied. The wake of the heist should rock the security boat, otherwise the price will be very high.

I will be speaking this weekend about diamond prices at Inhorgenta Munich. If you are around, it would be great to see you there, February 23 at 5 pm.

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