Editor’s Note
This article discusses the growing political pressure, notably from Belgian Prime Minister Alexander De Croo, to include Russian diamonds in EU sanctions, labeling them as “blood diamonds” due to their role in funding the war in Ukraine.
His message: Belgium wants to take action against the trade in Russian rough diamonds. Unlike goods such as caviar, gold, and vodka, the gemstones have so far been absent from EU sanctions packages. According to the “Guardian,” Russian diamonds are said to have been removed from the sanctions list at the last minute on several occasions. The gemstone trade in the EU is only relevant in Belgium – specifically in the Belgian diamond hub of Antwerp.
While it remains unlikely that the next sanctions package, which the EU aims to decide on by February 24, will contain a complete import ban on Russian diamonds, Belgium is alternatively working on a system intended to make the origin of rough diamonds transparent and thus the trade in Russian diamonds less lucrative. It is said that consultations are also underway with the EU and the G7 states on this matter.
The issue is highly explosive in Belgium. Within the government, which is composed of seven parties, a common line has recently been sought in vain. A lot of money and jobs are at stake: According to the Antwerp World Diamond Center (AWDC), EU sanctions could lead to the loss of 10,000 jobs in Antwerp, as reported by the Belgian business newspaper “L’Echo.” The port city has been a hub for the international diamond trade since the 15th century.
Gemstones from all over the world are polished, processed into jewelry, and sold here – specifically, 86 percent of the world’s diamonds land in Antwerp at least once. In 2021 alone, Russian rough diamonds accounted for a quarter of imports into the Belgian port city, according to the newspaper “Brussels Times.” The war in Ukraine and the accompanying US sanctions on Russian gemstones hit the Belgian trade hard, but the billion-dollar business did not come to a standstill.
Pressure on Belgium therefore remains high. The Baltic states, Poland, and Ukraine are tireless in calling on the home country of the European Commission to reconsider. For example, Ukrainian President Volodymyr Zelenskyy said in a speech to the Belgian parliament last March:
The accusation is that Belgium is financing the Russian war chest through the diamond trade. Specifically, critics are concerned about the diamond giant Alrosa, which earns a significant portion of its income in Antwerp and is partly owned by the Russian state.
Experts estimate the state’s stake in the company, which accounts for 95 percent of Russian diamond production, at 33 to 66 percent. The company’s CEO, Sergei Sergeyevich Ivanov, is also the son of former Defense Minister and confidant of President Vladimir Putin, Sergei Borisovich Ivanov. The Alrosa CEO was among the first oligarchs to be sanctioned by the US at the start of the war.
The Belgian industry, however, remains skeptical of sanctions – unlike a tracing system. Tom Neys of the Antwerp World Diamond Centre rejects them. He states in a statement to ORF.at that sanctions must be “economically and ethically” meaningful.
Furthermore, Antwerp is the world’s only trading center “with very strict regulations on compliance, anti-money laundering, and measures against terrorist financing,” says Neys. In contrast, he considers an international framework agreement for tracing rough diamonds to be sensible.
According to “L’Echo,” such a system is comparable to the Kimberley Process. The Kimberley Process refers to a complex system intended to prevent the trade in blood diamonds through government certificates of origin. Blood diamonds are diamonds whose proceeds are used to finance violent conflicts. However, Neys admits that no company has yet been able to develop a watertight traceability system.
From an economic perspective, Europe would harm itself with sanctions, Koen Vandenbempt, Dean of the Faculty of Economics at the University of Antwerp, had already told dpa on this matter in November.