Euro Banks Refuse to Finance Diamond Trade with Zimbabwe

(IDEX Online News) - Neither ABN Amro nor the Antwerp Diamond Bank (ADB) will finance any diamond transactions with Zimbabwe, it emerged during the Bank Finance session on the second day of the Mines to Market conference, in Mumbai.

Both Victor van der Kwast, CEO of ABN Amro’s International Diamond & Jewellery Group (ID&JG) and Pierre de Bosscher, chairman of the executive committee of the ADB, made it clear that “reputational issues” stood in the way of their banks financing any diamond trade with Zimbabwe. 

De Bosscher stated, “Ethical standards must improve,” and that “we will not finance diamond transactions with Zimbabwe while it is still on the OFAC list, under an EU trade embargo as well as a number of other such issues.” He went on to say, “We are not willing to even finance roundabout transactions in South African rands or Hong Kong dollars, because this isn’t good for the transparency of the industry.”

Van der Kwast echoed the sentiments of a number of other speakers at the conference when he stated that in his opinion, rough diamond prices were currently unsustainably high and that manufacturers were suffering due to reduced margins.

Both van der Kwast and de Bosscher stated that close attention still needed to be paid to the U.S. consuming market, as it is still by far the single largest market in the world. De Bosscher noted, “If your sales in the U.S. are down by one percent, you need a 5 percent increase in sales to the East to make up for it.”

A.P. Verma, deputy managing director of the State Bank of India (SBI), did some plain speaking, when he urged the diamond industry “not to indulge in practices that would cause banks to lose faith in it.” In response to a query, however, he reaffirmed that the SBI could continue to support in industry going into the future.