Belgium has decided to abandon its stance of imposing sanctions on Russian diamonds. However, a suggestion to lift the sanctions with its own conditions has angered the diamond industry, including De Beers, the world's largest diamond producer.

This controversy arises just weeks before a G7 decision is expected to be revealed, according to a report by Harry Dempsey, commodities correspondent for the Financial Times. 

As of now, the European Union has not imposed sanctions on Moscow's diamond exports. Belgium has cautioned that its diamond trading center in Antwerp could face a decline in business if sanctions were imposed, potentially diverting business to Dubai.

Approximately 90% of the world's diamonds go through Antwerp, and Russia earned around $4 billion from rough diamond exports in the previous year.

G7 countries are now moving closer to implementing a traceability system for diamonds. This system would enable the wealthiest economies in the world to prohibit the import of Russian gems starting from the beginning of the next year.

Confirmation of Russian source may rest with AWDC

Last week, the Belgian government provided information to journalists about the G7 plan, following speculations that the Antwerp World Diamond Center (AWDC) had been developing a proposal. However, this proposal has sparked concern among 16 prominent global diamond manufacturers and traders who accused the diamond industry in Antwerp of lacking transparency, accountability, and inclusiveness, as stated in a letter seen by the Financial Times.

AWDC stated that it offered "technical advice" to the Belgian government, and a completed proposal was presented to the G7 nations and the European Commission following extensive consultations between governments during the summer.

“What we have put on the table . . . is a government proposal with inputs from the Belgian diamond industry and other governments, including other G7 members,” said a senior Belgian government official as quoted by the Financial Times.

“It is not an industry initiative. This is a government initiative,” he added.

Various proposals for a G7 system to trace the source of diamonds are under consideration, including one put forth by the World Diamond Council, a global industry organization. However, it remains uncertain what role Antwerp would assume if sanctions were implemented. According to a version of AWDC's proposal provided to the Belgian government and seen by the Financial Times, Antwerp would serve as the entity responsible for confirming that rough and polished diamonds entering the G7 originated from non-Russian sources.

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