Belgium’s diamonds lose shine amid Russia sanctions speak – POLITICO

ANTWERP, Belgium — Russian diamonds are on Europe’s radar as soon as once more — as is Belgium’s fraught position within the trade.

Regardless of six rounds of sweeping European Union sanctions towards Moscow, Russian diamonds have remained a shining absence from the embargo listing. 

Their omission is due partially to Belgium’s distinguished position within the diamond trade. Antwerp has, for generations, served as the primary hub for diamonds arriving in Europe — together with from Russia.  

However which will change. Russia’s pledge to ramp up its army marketing campaign in Ukraine has prompted the EU to speed up work on a brand new sanctions bundle. And a number of other diplomats mentioned Belgium’s hesitance a couple of Russian diamond ban is more and more untenable. 

Publicly, Belgium has pledged to not block diamond sanctions. It has additionally expressed considerations that such a transfer might hurt EU economies greater than Russia’s purse. Privately, Belgian diplomats have efficiently lobbied EU officers to maintain the valuable stones off the sanctions listing, in response to quite a few diplomats aware of the sanctions discussions. 

“This place is turning into harder,” mentioned an EU diplomat.

The result’s that Belgium — and its unyielding assist of an trade lengthy linked to autocrats, dictators and battle zones — is as soon as once more in an uncomfortable highlight. The EU has already sanctioned Russian gold and different luxurious items. And now these lengthy pushing for diamond sanctions, together with the Baltic states, Poland and the Netherlands, are attempting to pounce. 

“We’ve been pushing for sanctions on Russian diamonds for months,” mentioned one other EU diplomat.

Diamond divergence

Tough Russian diamonds presently account for 30 p.c of the worldwide commerce within the treasured stone. And the U.S. Treasury Division estimates that diamonds are one in every of Russia’s top-10, non-energy exports, totaling over $4.5 billion in 2021. 

But even amid the conflict, Belgian leaders haven’t distanced themselves from the nation’s diamond trade. Simply final week, Belgian Prime Minister Alexander De Croo was in Antwerp expressing his assist at an trade convention. He has repeatedly argued that any diamond ban would damage Europe greater than Moscow.

“For six centuries, Antwerp has confirmed that it at all times manages to stay resilient and progressive in turbulent occasions,” he mentioned in a speech that didn’t point out Russia. 

Diamond trade leaders in Antwerp stay assured, even after the renewed debate on sanctions began this week.

Different nations have taken a distinct method. 

The U.S. barred the import of “non-industrial” diamonds from Russia shortly after the invasion. It additionally sanctioned Sergei Sergeevich Ivanov, the chief govt of Russia’s largest diamond mining agency, Alrosa, and his father, Sergei Borisovich Ivanov, a former chief of employees to Russian President Vladimir Putin. 

The EU has not adopted swimsuit. 

Roland Papp, who follows illicit monetary flows for Transparency Worldwide, mentioned the EU was demonstrating “ethical hypocrisy” on the topic.

“Over the summer season the EU added Russian gold to the sanctions listing, it’s not too late so as to add diamonds,” he mentioned.

In July, the anti-corruption NGO wrote to EU officers urging them to incorporate diamonds in its Russian sanctions regime. Papp mentioned the EU didn’t reply to the letter.

Tom Neys, a spokesperson for the Antwerp World Diamond Middle, argued that the diamond enterprise, already below enormous stress from regulators and customers, organically responds to client calls for, which presently embrace moral and sustainable practices.

“We’ve got invested for 20 years in making the diamond commerce extra clear,” mentioned Neys in an interview with POLITICO on the Antwerp convention. “Are we actually going to throw that each one away to reward Dubai, which is already opening its doorways for Russian oligarchs?” he added.

These arguments have left Ukrainian officers fuming. In April, Ukrainian President Volodymyr Zelenskyy lashed out at Belgian lawmakers in a video look earlier than the nation’s parliament. 

“There are these for whom Russian diamonds, generally bought in Antwerp, are extra vital,” he mentioned. 

A historic bond

Anti-money laundering, tax regulation and higher transparency haven’t come naturally to Antwerp’s diamond merchants. 

For the reason that late Nineteen Nineties, Belgium’s diamond trade has been linked to civil conflict, armed battle and corruption throughout Africa. The world’s first-ever trial towards a smuggler of “blood diamonds” from Sierra Leone was held in Antwerp in 2004. 

Belgium’s authorities has lengthy confronted criticism for trying the opposite method. 

In 2008, Human Rights Watch wrote to Belgium’s then-Deputy Prime Minister Didier Reynders, now the EU’s justice commissioner, urging Brussels to crack down on Zimbabwe’s diamond smuggling and the human-rights abuses that accompanied it. 

However NGOs later accused Belgium of doing the alternative and lobbying the EU to elevate sanctions on Zimbabwe’s main diamond producer, which it did in 2013, offering a lift for the nation’s despotic ruler, Robert Mugabe.

Equally, a bunch of Antwerp-based politicians within the early 2010s often known as the “diamond membership” had been accused of dictating authorities coverage and legal guidelines to learn the trade. 

In the case of Russia, then-Belgian Prime Minister Charles Michel, now the European Council president, was one other advocate for Antwerp’s diamond scene. In January 2018, Michel met Dmitry Medvedev, then Russian premier, in Moscow to debate enterprise alternatives.

“Our funding cooperation has not come to a standstill,” Michel mentioned on the time, referencing current EU sanctions on Russia over its annexation of Crimea. “Russian firms have lengthy been working in Antwerp.”

Michel and Reynders declined to remark.

Russia divides diamond trade

Sanctions apart, the diamond trade has additionally cut up over how one can deal with Russia’s conflict in Ukraine. 

Since 2002, the so-called Kimberley Course of has been a United Nations-endorsed certification scheme designed to guarantee customers and merchants that the diamonds they purchase usually are not fuelling wars in Angola, Sierra Leone, and the Democratic Republic of the Congo. 

However critics say the Kimberley Course of fails to deal with present conflicts, like Russia’s conflict in Ukraine. Nonetheless, Bruce Cleaver, the chief govt of De Beers, informed POLITICO his firm helps reforming the Kimberley Course of as a substitute of eliminating it.

“We predict it is an vital constructing block in sustaining client confidence that the diamonds they’re shopping for usually are not battle diamonds or [had] little one labor concerned in them,” he mentioned.

Reform could also be unimaginable, although. Papp, of Transparency Worldwide, mentioned pro-Russian members are resisting stress to develop the Kimberley Course of’s slender battle definition, which solely covers diamonds financing rebellions searching for to overthrow authentic governments. 

Certainly, at a Kimberley Course of assembly in June, members like China, Belarus and the Central African Republic, stopped any debate on the matter. 

Hans Merket, who covers pure assets for the Antwerp-based IPIS suppose tank, mentioned the Kimberley Course of is struggling to guard customers from fears they’re funding Russia’s battle in Ukraine.

“It runs the chance of turning into more and more irrelevant,” he mentioned.

Barbara Moens contributed reporting.