Diamond companies protest G7 certification of global diamonds

The recent developments following the G7 countries’ decision to mandate the certification of all global diamonds in Belgium have proven to be disastrous, particularly affecting non-Russian trade.

Reliable information reaching Botswana Guardian this week is that more than 100 companies’ members in the Antwerp's Diamond Business Community have petitioned the Management of the Antwerp World Diamond Centre (AWDC), urgently requesting action to address the challenges stemming from the Diamond Office procedures regulating the flow of diamonds in and out of the city.

These reputable companies, some with centuries-long legacies, argue that the current circumstances endanger the existence of Antwerp's diamond industry, a heritage spanning six centuries. They emphasise the need for immediate action to safeguard its future, lest they suffer significant losses.

The concerns raised by Antwerp companies echo those of countries like Botswana and other African diamond producers, who view the G7 countries' resolution as an attempt to perpetuate geopolitical dynamics and align with Russian interests.

Botswana, for instance, is yet to send any diamonds to Antwerp despite the G7's expectation that local companies would commence doing so as of March 1, 2024. Instead, Botswana continues its practice of sealing packages as before and providing certificates affirming the local origin of the precious stones, to prevent contamination.

The companies representing the diamond business community of Antwerp, in their petition, stated that they urgently bring attention to the challenges they are encountering as a result of Diamond Office procedures affecting the flow of diamonds into and out of the city. They say while they fully endorse the decisions made by Belgium, the European Union, and the G7 nations regarding the sanctions imposed on January 1st, 2024, the implementation of these measures has significantly disrupted their operations.

The companies argue that, 'the intention behind these measures was to stem the flow of diamonds from sanctioned states. However, the reality we are facing is severe disruption to our supply chains and a growing disconnect from global trade. This has led to a substantial increase in expenses and the irretrievable loss of business opportunities.' They say they are struggling to fulfill customer orders, having to manage excess blocked inventory, and are burdened with additional paperwork requirements that were not previously necessary.

The companies say despite earlier assurances that shipments would be cleared within 24 hours, even straightforward cases are now delayed by over a week. Numerous examples of goods being unnecessarily blocked include items originating directly from African producer nations, goods processed in beneficiation settings, goods falling outside the 0.50ct+ size range, and goods returning to Antwerp from trade fairs outside the EU. They say concerns regarding the impracticality of the proposed policies were raised by industry members months ago. It was predicted that rather than targeting sanctioned sources, these proposals would disrupt the flow of legitimate goods. Despite numerous meetings and reminders, no satisfactory answers or amendments have been provided.

As a result, the diamond trade in Antwerp is now facing unbearable disruptions, with Diamond Office staff also struggling to cope with the lack of clarity and expectations placed upon them. The companies urge for a comprehensive review of the procedures in collaboration with industry stakeholders to devise practical solutions that effectively target sanctioned sources while minimizing disruption to legitimate trade.

'This also applies to the upcoming procedures set to be implemented on September 1st, 2024, which we foresee will further erode Antwerp's competitive advantage and isolate us within the global diamond landscape without effectively addressing sanctioned products.' The companies say while they share the goals and spirit of the sanctions, 'we object to their cumbersome, ineffective, and inefficient execution. The current trajectory jeopardizes the existence of Antwerp's diamond industry, a heritage spanning six centuries. Urgent action is imperative to safeguard its future.'