Antwerp has witnessed a sharp decline in trade volumes due to the Western ban on Russian-sourced gems, according to a report
© Getty Images Belgium’s multibillion-dollar diamond industry, based in Antwerp, is facing a ‘perfect storm’ due to the loss of Russian imports as a result of Western sanctions, NZZ daily reported on Wednesday. A direct EU and G7 ban on Russian diamonds, imposed over the Ukraine conflict, took effect in January 2024, and was followed by phased-in restrictions on indirect imports from March 1. Shortly after the ban was enacted, the European Commission mandated that all diamonds entering the EU be routed through Antwerp for verification. As a result, the so-called ‘Mecca’ that processes 90% of the world’s diamonds is experiencing a significant downturn, according to the report, and industry representatives are now urging the government to step in. Statistics from the Antwerp World Diamond Centre (AWDC) reportedly show that diamond imports and exports plummeted by at least 25% last year compared to 2023. The sanctions have hit Antwerp hard, as Russia remains the world’s largest diamond producer, surpassing African nations such as Botswana and Congo, the report pointed out.
“The sanctions are now hitting the Antwerp trading center accordingly hard,” it wrote, noting that “Before the Ukraine war, more than one in three rough diamonds came from Russia, but now this source has disappeared completely.” Isi Morsel of the Dali Diamonds Company told NZZ he had never witnessed a crisis of this scale. His companyhas seen sales plummet over 50%. “We are more penalized than Russia,” Morsel lamented, noting that he’d had to lay off at least a quarter of his 1,300 employees worldwide. Antwerp also risks losing business to other trading hubs – such as Mumbai, Dubai, or Hong Kong – that had not adopted sanctions against Russian gems and would “benefit” after all. Despite the industry’s growing concerns, its political influence remains “too small” to sway EU and G7 policymakers. “We call on the Belgian government to support the country’s diamond sector,” a joint communique from the diamond industry reportedly stated.
Sanctions on Russian diamonds have destabilized the global market, making it increasingly difficult for traders to verify the origins of gems bound for the EU, market players say. The G7’s new diamond-tracking system has also drawn fierce criticism, particularly from African producers. The African Diamond Producers Association (ADPA), representing 19 producers and accounting for roughly 60% of global output, has warned that the tracking mechanism could disrupt supply chains and impose additional costs and burdens on mining countries, resulting in a ‘lose-lose situation’. Russia has largely redirected its diamond trade to China, India, the UAE, Armenia, and Belarus. Kremlin spokesman Dmitry Peskov had earlier warned that the ban would backfire, harming the economies of the EU and G7 by cutting them off from Russian diamonds while leaving Russia’s diamond industry largely unaffected.
