Turbulent Times

It's a turbulent time for many in the diamond industry.

Traders in Antwerp have been tearing their hair out for the last three weeks, since the G7 sanctions on Russian goods were introduced.

Shipments that should take 24 hours to clear Customs are still languishing at the city's Diamond Office a week later because of paperwork issues.

Importers bringing diamonds into the 27 EU nations are now legally obliged to provide documentary evidence of the country of origin for any non-industrial diamond of 1.0-cts or above, rough or polished (regardless of where the cutting and polishing took place).

The levels of frustration have been such that AWDC and De Beers have jointly called on Belgium's prime minister Alexander De Croo to reconsider using Antwerp as the sole entry point for diamonds into G7 countries.

And almost 150 traders have complained to the AWDC (Antwerp World Diamond Centre), which operates the Diamond Office, demanding a "comprehensive review of the procedures".

There are bound to be teething troubles with any new system. In response to complaints, Ari Epstein, CEO of AWDC, hinted that there may be an element of user error.

"In light of the processing time concerns, I want to highlight the government's assurance that all shipments with proper documentation will be expedited within 24 hours," he said.

The implication was that improper documentation was to blame for shipments being delayed.

Traders are required to provide invoices and air waybills for all goods, plus a KP cert or equivalent for rough, and a signed declaration - "not Russian" - for polished.

These are mandatory. But, confusingly, there's also an option to submit "optional documentary evidence".

We're currently in a "sunrise period" that lasts until new, tighter restrictions take force on 1 September. Will things get easier after that? And how will the traceability mechanism work?

It seems clear that there won't be a one-size-fits-all solution, with the G7 nations adopting a single piece of traceability technology.

Instead they'll validate a number of third-party traceability platforms. Identifying information and certificates will then be entered into a single, all-encompassing blockchain-based ledger.

"It's a collective challenge," said Wes Tucker, CEO of the De Beers-owned traceability platform Tracr during a webinar yesterday.

"I don't think there's a silver bullet, there's no one solution that solves all these (traceability) problems.

"This is complex, that's why it's taken us seven years to get to where we are and we're not finished."

David Block, CEO of Sarine, which is collaborating with Tracr, said: "There's not only room, there's a need for the different solutions that exist within the industry to collaborate to provide an industry-wide solution."

Earlier this week Leanne Kemp, CEO of the Australia-based Everledger transparency platform, told us it was important "to dispel the notion that everything hinges on a single platform like Tracr-Sarine.

"The recent collaboration underscores the complexity of the landscape, underscoring that neither platform in isolation would suffice."

She argues that if the industry does favor the Tracr-Sarine solution the only equitable outcome would be for De Beers (Tracr owners) to make its technology as an open-source open-data platform. And, she laments, "that will never, never ever happen".

Things will doubtless get better in Antwerp. And G7 may, in time, introduce additional entry points to ease the burden.

The adoption of a traceability mechanism should streamline the process and dispense with delays. But possibly not without its own teething troubles. Watch this space.

Have a fabulous weekend.