Diamond traders in Antwerp face significant delays and increased costs due to the recent European Union ban on Russian diamond imports, which came into effect on 1st March, according to a letter obtained by Reuters news agency.
The correspondence, dated 13th March, expressed concerns about the disruptions undermining Antwerp’s historic diamond trade. It urged Belgium’s primary diamond industry group, the Antwerp World Diamond Centre (AWDC), to reconsider the new procedures.
Market observers suggest that the impact of these delays may be somewhat offset by slow market conditions, with high diamond inventories and declining prices. Paul Zimnisky, an industry analyst, noted a 25% decrease in prices since early 2022.
Al Cook, CEO of De Beers’ diamond business under Anglo American, announced plans to reduce production in response to oversupply.
While the letter acknowledged support for the sanctions imposed by Belgium, the European Union, and the Group of Seven (G7) nations on 1st January, 2024, it criticised the adverse effects on their operations.
Despite the intention to restrict the flow of diamonds from sanctioned states, the letter highlighted severe disruptions to supply chains and increasing isolation from global trade.
The Reuters article quoted a Belgian government official who reassured that the delays were temporary and gradually improving.
The European Union and the Group of Seven (G7) had agreed to ban direct imports of Russian diamonds starting January 1, extending the ban to Russian-origin stones via third countries from 1st March due to Russia’s conflict in Ukraine.
Diamond dealers reported customs holding up shipments for over a week, even for gems originating from African producers. The Belgian government official pledged to expedite pending shipments within 24 hours.
The disruption coincided with the Hong Kong Diamond Fair, exacerbating initial delays caused by anticipated logistical issues. Diamond dealers anticipate further challenges when additional tracing requirements take effect in September.
Expressing concern over the potential erosion of Antwerp’s competitive advantage, the letter warned of existential threats to the city’s six-century-old diamond industry.
Ari Epstein, head of the AWDC, assured that the group would present new measures promptly, acknowledging the challenges and disruptions caused by the timing. Epstein emphasised the unequivocal commitment to compliance, stating that violations of sanctions are criminal and taken seriously by governments and the organisation alike.