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11 Feb, 2024 13:59

Moscow warns of diamond ban’s impact on Belgium

Russia is working on response measures to Western restrictions, a Foreign Ministry diplomat says
Moscow warns of diamond ban’s impact on Belgium

Belgium will lose its status as the global diamond trading hub due to Western sanctions on Russian diamonds, Artyom Studennikov, the head of the First European Department of the Russian Foreign Ministry, told RIA Novosti in an interview published on Sunday.

An EU and G7 direct ban on Russian diamonds came into force last month, to be followed by phased-in restrictions on indirect imports from March 1. By September, a tracking mechanism to help the Western authorities to identify the origin of imported diamonds and thus avoid sanctions violations is also planned.

Belgium had initially stalled the efforts of Western allies to bar Russian diamonds, warning that Antwerp – through which 90% of the world’s diamonds pass – would risk losing business to other trading centers. However, the nation later changed its position and is in fact behind the diamond tracking system proposal.

“Refusal to import Russian stones will inevitably lead to Belgium ceasing to be the global hub for diamond trade, and other countries, those far removed from Brussels, will become the centers of gravity,” Studennikov warned. According to the diplomat, the Belgian diamond lobby is already openly talking about the potential loss of thousands of jobs and a third of trade turnover as a result of the diamond ban.

“International banks are currently reviewing their credit policies and closing their branches, already considering the diamond business in Antwerp to be problematic going forward,” he noted, adding that companies involved in diamond trade are also likely to relocate from Belgium to other destinations, “whose authorities do not refuse mutually beneficial cooperation in favor of political interests of third countries.”

Studennikov noted that Russia is currently working on response measures to the diamond ban, which will be focused on Russia’s “national interests and the sustainability of the global diamond industry as a whole.”

Earlier this week, reports emerged that South African diamond giant De Beers and Botswana’s state-owned Okavango Diamond Company appealed to the G7 to reconsider the next stages of the ban on Russian diamonds, concerned that African prices could spike when the tracking system is introduced. India, which is home to 90% of the world’s diamond cutting and polishing industry, also reportedly asked the group to delay the ban in December.

Russia is the world’s biggest producer of rough diamonds by volume. The country largely redirected its diamond trade to China, India, the UAE, Armenia, and Belarus last year. Analysts note that if Russia directs the bulk of its diamond trade to venues such as the Mumbai Diamond Exchange and the Dubai Diamond Exchange, as well as smaller trading platforms, they could soon replace Antwerp as diamond trading hubs.

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