A member of auction house staff poses for a picture with a 19-carat pink diamond at Christie's auction house, in London, Oct. 18, 2017.

Belgium faces pressure to support sanctions on Russian diamonds

Belgium has to decide how to proceed amid calls for sanctions against Russia’s diamond industry. The Belgian city of Antwerp plays a big role in the global diamond trade, and would have much to lose. Hans Merket, of the International Peace Information Service (IPIS), joined the World’s host Marco Werman from Antwerp to discuss the situation.

The World

The European Union is debating a fresh round of sanctions against Russia amid the war in Ukraine. And one thing it wants on the list is Russian diamonds.

But Belgium is wavering. That’s because the city of Antwerp plays such a huge role in the global diamond trade.

Meanwhile, Belgium’s prime minister is doing somersaults to please all parties — and stay tough on Russia.

Hans Merket is with the International Peace Information Service (IPIS), an independent research institute in Belgium, and his focus is on the link between natural resources and conflict development and human rights. He joined The World’s host Marco Werman from Antwerp to discuss the situation.

Marco Werman: First, set the stage for us. What is Belgium’s role exactly in the global diamond market?
Hans Merket: Belgium is the global supermarket for diamonds, let’s say. So, it’s all about wholesale trade of both rough and polished diamonds. The estimate is that about 80% of all diamonds traded in the world, at one point, pass through Antwerp, Belgium’s, diamond trading center.
What about on the Russian side? How dependent is it on Belgium for its diamond exports?
Where Russian diamonds go, there are three main destinations where they make their first stop. It’s either Belgium, Ramat Gan in Israel or Dubai in the United Arab Emirates. And Antwerp is the biggest. And also the other way around, for Antwerp, it’s even more important, I would say for Antwerp, it is the most important trading partner when it comes to diamonds.
I don’t hear a lot about diamond production in Russia. How big is their output?
Yes, that’s something that many people don’t expect or don’t know. But actually, Russia is the world’s biggest diamond producer. About one-third of all diamonds put on the market annually are mined in Russia. So, it is very important.
Wow. So, the EU idea is to sanction Russian diamonds. What is the evidence, though, that money from Russia’s diamond exports are helping to finance its war in Ukraine?
Well, there’s both direct and indirect links. Let’s say indirectly, it’s over 90% of all diamonds mined in Russia are mined by Alrosa, which is a partly state-owned company in which Russian governmental entities together own 66% of the shares, and benefits from the profits — that is money that can be used to support Russia’s war effort. Also, more directly, it has been shown that the Russian government has quite a high degree of control over this company. The CEO of Alrosa is the son of one of [President Vladimir] Putin’s closest allies, Sergei Ivanov. And then, there has also been evidence that Alrosa, as a company, has been providing financial and technical support to the Russian navy, and particularly, the one submarine with which they have a kind of supportive agreements already for the past 25 years.
How much pressure is Belgium under from other EU member states to include Russian diamonds in its next round of sanctions?
Yes, that pressure is mounting. There’s particularly a group of Eastern European countries that are pushing for the EU to finally include Russian diamonds in the sanctions package. There’s, of course, also pressure from the broader public in Europe. Many people in Europe are going through a hard time because of all these sanctions and prices are rising. So, for them, it’s also often difficult to understand why this luxury market has been, time and again, spared from sanctions. So, that pressure is definitely growing.
What is the position of Belgium’s prime minister, Alexander De Croo?
The Belgian position has been that they wouldn’t block any sanctions if the EU would propose it, but they are not, well, supportive or wouldn’t themselves put that on the table. That’s the official position. Then, there have been also reports that there has been at least some kind of lobby from Belgium to spare diamonds from the sanctions package. It has also been reported that actually, diamonds have been taken out of the previous round of sanctions at the very last minute, and it was actually the plan to include them.
So, the US, the world’s largest diamond consumer market, has already sanctioned diamonds. Are there other countries that have included Russian diamonds in their sanctions?
Yes, I think the US is the only country that has specifically sanctioned Russian diamonds. But there are various countries that have put Alrosa, Russia’s biggest diamond mining company, on sanction lists, for instance, the United Kingdom, Canada, New Zealand, as well. So, there’s a series of them, yes.
Where do Belgians, generally speaking, stand on this?
Well, Belgians don’t know this diamond sector very well, because it’s something that is not very visible. We don’t have a big diamond consumption market. So, it’s mainly this wholesale trade that’s hidden in offices on three streets, actually, in Antwerp, that if they don’t come there, you never see the street. So, there is much less of a public debate about it than, for instance, in the United States, because there you have the consumers. And consumers are much more closely attached to this product. Here in Belgium, we have companies, we don’t really know their names. These are very invisible companies that are in the midstream of the trade. So, the public debate is much less active. It’s just not in the public debate.
I find that really fascinating, considering how much attention is paid to Antwerp and Belgium. And yet the Belgians don’t really see much of it or know much about it.
Yes, that’s indeed really strange. And I think mainly it is because we don’t have this consumption market. All ethical steps forward that have been taken in the diamond trade, the pressure has always come from consumers. They put pressure on their governments, as well, to push for change. In Belgium, actually, many people think that diamonds are already being sanctioned. You read here and there in the press, it’s assumed that they are under sanctions, and people have forgotten that actually they have managed to escape sanctions every time.

This interview has been lightly edited and condensed for clarity.

Related: Russia’s ‘conflict diamonds’ under scrutiny

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