Yes to Sanctions, No to Single Node
June 21, 24
Hands up who's in favor of Antwerp as the sole point of verification for the millions of carats of diamonds entering the G7 and EU nations, to ensure they aren't of Russian origin?
Not the US
Not Botswana
Not the miners
Not the manufacturers
Not the retailers
Not the GJEPC (India's Gem and Jewellery Export Promotion Council)
Not De Beers
Not the 27-member World Federation of Diamond Bourses
Not the African Diamond Producers Association (ADPA), representing Angola, South Africa, Namibia, Tanzania, Zimbabwe, Ghana, Liberia, Sierra Leone, Central African Republic, Togo, DRC, Congo, Cote d'Ivoire, Guinea and Cameroun
Not Russia (obviously)
Not India
Not the traders in Antwerp
Not the Antwerp World Diamond Centre (AWDC) - the body tasked with administering the sole point of verification
Apologies to those (many I'm sure) who aren't on the list. But the point is clear. There is near-universal opposition to the way sanctions are being imposed against Russia.
The opposition is not to the sanctions themselves, which are aimed at halting diamond revenue that funds the two-year old war (sorry, "special military operation") in Ukraine.
But to the extra expense, delays and inconvenience that inevitably result from channelling the majority of all the world's diamonds through a single customs house.
The implementation in March of checks on all goods of 1.0-cts and above arriving at Antwerp's Diamond Office - which handles all diamond imports and exports - led to chaos, bottlenecks and complaints.
And the complaints weren't just from the traders, who said shipments were taking a week or more, rather than a day, to be cleared by customs.
The Antwerp World Diamond Centre (AWDC) itself - which jointly runs the Diamond Office with the government's customs and licensing departments, also said it was a system that needed fixing.
Ari Epstein, CEO at AWDC, quit suddenly just six weeks after the checks were introduced.
And his interim replacement, Karen Rentmeesters, said: "We are pro-actively advocating for the implementation of one or more additional rough verification points outside the G7."
The voices calling for a radical re-think are many and loud. Only last week the trade body Jewelers of America met with a dozen Democratic and Republican lawmakers in both the House and Senate.
A single entry point would, they warned, "cause maximum damage to the global diamond and jewelry supply chain, while having minimal effect on Russia's diamond revenues".
De Beers has pledged its full support for the sanctions, but says it's concerned that the way they're implemented may not prove to be practical or enforceable across the whole industry.
It has hired a former senior British diplomat to lobby Western governments over the designation of Antwerp as the sole entry point.
In March, Al Cook, De Beers CEO, and Isi Morsel, chairman of AWDC (Antwerp World Diamond Centre) wrote a joint letter to the Belgian prime minister urging him to reconsider the Antwerp plan.
The African Diamond Producers Association (ADPA) - responsible for 60 per cent of the world's rough diamonds - says the new G7 sanctions in general, and the single entry point in Antwerp in particular, are a "lose-lose situation".
In just over two months, the tighter 0.50-cts restriction will come into force (together with the incorporation of traceability platforms).
So who thought a single entry point was such a great idea, and are they ready or able to amend it at this late stage?
Hands up the EU (European Union) or, to be more precise, the European Commission, its politically independent executive arm, which has been rather quiet on the matter.
Its latest update says: "As of 1 March 2024, all rough diamonds (CN codes 7102 31 00 and 7102 10 00) of 1.0 carats or above wishing to enter the EU market will be required to pass through a so-called 'rough import node', located in Antwerp (Belgium) for initial verification (including physical check) and certification.
"Belgium already today handles 99.99 per cent of the EU's import of rough diamonds. As of 1 September 2024, the threshold is lowered to 0.5 carats or above."
Its press office has yet to respond to requests for an update.
Have a fabulous weekend.