【Antwerp, Bel】Antwerp’s Diamond Trade Seeks State Aid Due to Russia Sanctions

Antwerp is the diamond mecca. Now it is experiencing a slump due to Russia sanctions – and is calling on the state.
Russia is the world’s largest producer of diamonds. However, for a year now, these have no longer been allowed to be imported into G7 countries. Traders are caught in a dilemma between morality and business.
Antonio Fumagalli, Antwerp
At first glance, Antwerp’s “Diamond Quarter,” as the mere few hundred square meter area in the immediate vicinity of the train station is called, looks as it always has. Countless jewelry shops line the streets, the shop windows glitter like a starry sky.
The true heart of the diamond mecca begins a few meters further. Apart from mining, almost every step that the precious stone undergoes during its “life” is carried out in Antwerp. On the inconspicuous Hoveniersstraat, specialists receive the diamonds, cut them, polish them, and sell them on. The traders, many of them of Indian or Jewish origin, bustle through the urban canyons. Some, well-guarded by security personnel and cameras, even pull a wheeled suitcase presumably containing valuable goods behind them. It is not without reason that access to the quarter is restricted with street barriers.

The diamond trade in Antwerp is a multi-billion euro business. For many years, good money could be made with it. But now dark times have arrived, as the Antwerp World Diamond Centre (AWDC) reports: imports and exports of diamonds fell by no less than 25 percent in 2024 compared to the previous year.
The causes are manifold: Lab-grown diamonds have grown into massive competition. They are no longer only in demand by industry but increasingly also by consumers – an artificial jewel in an engagement ring is no longer taboo. As a result, prices for natural diamonds have come under severe pressure and are currently at unexpected lows.
However, the lament in Antwerp has another, location-specific reason – and here the story becomes political: As punishment for the war of aggression in Ukraine, Russian diamonds may no longer be imported into the EU and G7 countries.
Arguing that this would disproportionately affect one member state – Belgium – the European Commission initially opposed the measure. On January 1, 2024, the sanctions package nevertheless came into force, and from March, an indirect import ban was also implemented – meaning also for Russian stones processed elsewhere. In short: Antwerp’s diamond industry is currently facing a “perfect storm.”

What is not necessarily known to the wider public: Russia is the world’s most important diamond producer, far ahead of African states like Botswana or Congo. Accordingly, the sanctions are now hitting the Antwerp trading hub hard: Before the Ukraine war, more than one in three rough diamonds there came from Russia; now this source has completely dried up.
The AWDC says the sanctions are also being implemented extremely strictly. In February, Belgian investigators discovered an illegal import worth 10 million euros. While you cannot tell a rough diamond’s origin by looking at it, the documentation is precise and is checked closely – that’s how the authorities also caught that fish in their net.

The luxury goods business is inherently subject to greater fluctuations than other economic sectors. No one needs diamonds to (survive) live; demand follows economic and fashion trends. Few know this as well as Isi Mörsel, whose grandfather co-founded the Dali Diamonds Company. He has experienced other downturns, but this time the crisis is more severe, he says.
Because Dali Diamonds specializes in importing rough diamonds, its revenue fell even more sharply than the industry average – by more than 50 percent according to its own statements. Mörsel says he had to lay off no less than a quarter of the company’s 1,300 employees worldwide.

The players in Antwerp’s diamond cluster have mixed feelings: From a moral perspective, they fully support the Russia sanctions. For business, however, they are harmful.