Belgium is holding off on banning wholesale imports of Russian rough diamonds until a comprehensive traceability system is established by the EU and G7. Belgian Prime Minister Alexander De Croo made this announcement during a joint press conference with Ukrainian President Vladimir Zelensky in Brussels on Wednesday.
The G7 recently expressed its intention to impose an embargo on direct and indirect imports of Russian diamonds. However, Belgium has been hesitant to support these efforts due to concerns that implementing an outright ban on wholesale imports from Russia would have negative consequences for Antwerp, which serves as a major global diamond hub. Industry leaders have warned that Antwerp could lose significant business if such a ban is put into place.
De Croo explained that a wholesale ban would create loopholes that could allow Russian diamonds to enter Western markets through third countries. He stated, “If you only do it on the wholesale markets, then it will be traded to other diamond centers in the world. And we will still have it in our shops, and it would make no difference for Russia.”
Instead of a ban, Belgium has proposed the introduction of a diamond tracking system, with Antwerp functioning as a sorting hub. While the details of this mechanism are not yet clear, proponents of the plan argue that it would enable the G7 and EU to track both wholesale imports and retail sales. De Croo believes that this approach is a more effective way to eliminate Russian diamonds from their markets.
“What you want is to cut off Russian dominance completely from our retail markets. The best way to do that is with the full traceability system to exclude Russian diamonds from all the markets. This full traceability and this full banning on the retail markets is the only way to make sure that Russia is not financing the [military operation in Ukraine] anymore with those diamonds,” De Croo explained.
The Prime Minister expressed confidence that the team responsible for developing the ban is close to finalizing a comprehensive traceability system. He anticipates that the regulation will come into effect on January 1, 2024.
However, experts have warned that Belgium would be significantly impacted by restrictions on Russian diamond imports. Approximately 25-40% of the diamonds in the Antwerp diamond industry are sourced from Russia. The fluctuation in Belgian imports of Russian diamonds over the past year and a half further demonstrates the significance of this trade relationship.
Despite the challenges, Belgium remains committed to addressing the issue of Russian diamonds through effective traceability measures. The country aims to establish a system that not only eliminates Russian diamonds from its own markets but also prevents their influx into global markets. By doing so, Belgium hopes to ensure that Russia does not continue to finance military operations in Ukraine through diamond trade.
Overall, the Belgian government’s decision to wait for a comprehensive traceability system before implementing a ban on Russian diamond imports reflects its commitment to finding a solution that effectively addresses the issue without compromising the Antwerp diamond industry’s economic stability.