- US worried by backlash from African countries, India and New York-based jewellers
- From September 1, diamonds of 0.5 carats and above are to pass through Antwerp
- US says certification process applies only to EU countries because it has an open policy
- US wants African industry players and the UAE’s concerns taken into consideration
BONGANI MALUNGA
The United States of America (USA) is softening its stance on signing off to place Antwerp, Belgium as the traceability and certification hub for internationally-traded diamonds in a bid to keep Russian diamonds off the market.
The US is part of the Group of Seven (G7) alongside Italy, Japan, Canada, France, Germany and the United Kingdom.
The global group enforced installation of Antwerp as the world’s diamond certification hub but the move was rejected by Botswana, Angola, Namibia and India in recent months.
Sanctions on Russian diamonds
According to global news publication Reuters, the US is now reconsidering its initial involvement in the industry shakeup that has left African and Middle Eastern countries marginalised.
The news outlet suggests that the US, according to two government sources, has disconnected from the G7 as they are barely active in the talks but not engaging further.
The G7 countries agreed on placing sanctions on Russian diamonds in December last year. The countries also agreed to sign off on having Antwerp as the certification hub this year.
US distancing itself
From September 1, the European Union’s ban on Russian diamonds will require diamonds of 0.5 carats and above to pass through Antwerp for certification.
However, the US is now distancing itself from the September directive and has not signed off to set it in motion. US officials are adamant that the September directive only applies to the EU while they have an open policy. Reuters reported that the US government has cooled its plans to enforce traceability and certification as talks have stalled.
Concerns of African partners
The US is worried by industry backlash from Botswana, Angola, Namibia, India and New York-based jewellers. One of the government sources stated that the US wants industry players such as African countries and the United Arab Emirates’ concerns to be taken into consideration.
“We need to do this in a way that takes into account concerns from African partners and producers, takes into account Indian and UAE partners and makes sure we can also make it workable for the US industry,” Reuters quoted a government official.
“Is there a traceability mechanism that satisfies all of that? We’re still engaged, we haven’t walked away from the idea. On the other hand, we couldn’t sign up definitely having this in place by September 1st.”
“Detrimental” to Botswana
Botswana has maintained its position of opposing the move because it would be costly and disrupt the industry.
In March, Botswana’s Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Moagi, told the Rapaport News agency that the G7’s import restrictions will have a “detrimental impact on Botswana’s diamond trade and may reverse the gains the country has made in recent years”.
Moagi reiterated Botswana’s view that the move would provide logistical challenges. “It creates added time in terms of processing our diamonds and it affects our beneficiation trajectory,” Moagi was quoted as saying.
“This may bring about added costs and unintended consequences that will affect the producer countries.”