The new tracing and registration system for the global diamond trade – which Belgium helped design – entered the start-up phase on Friday, March 1. The system must mainly put an end to the trade in rough Russian diamonds.
Last year, the G7 – the most important industrialized countries – reached an agreement to ban rough Russian diamonds. Belgium had asked for Antwerp to play a unique and crucial role in that new system. Ultimately, Canada, for example, also played a role in verifying and tracing the valuable stones.
The new system should make shortcuts impossible. For example, stones from Russia that are worked in India will be stopped in Europe. Every rough stone within the G7 will be registered. In concrete terms, everything will be kept digitally, via blockchain technology. The new system is optional for traders until September. After that it becomes definitively mandatory.
However, some major players in the sector – such as ‘De Beers’ – cannot laugh at the system. They prefer to be able to import from anywhere, regardless of origin. They also complain that the new rules are unclear and therefore harmful to general trade.
War Ukraine
A different opinion is heard at the Ministry of Foreign Affairs. “This is an important step in the implementation of G7’s restrictive measures. Russia is the world’s largest producer of rough diamonds by volume. A large portion of the proceeds directly finances the war in Ukraine.”
Since 2022, Belgium has cooperated in what is called “an innovative sanctions mechanism”, which maximally limits the risk of circumvention via third countries. “Belgium was assigned a leadership role in implementation,” the Ministry of Foreign Affairs said.
Import restrictions
Since the beginning of this year, there have been import restrictions on non-industrial diamonds from Russia. Since then, Russia could no longer export diamonds to the G7. However, that measure did not yet apply to rough diamonds that were further processed into polished diamonds in a third country.
“Today the G7 is going a step further and indirect import restrictions are also coming into force,” the Foreign Affairs concluded. “This means that in addition to the direct import ban, a phased import ban on Russian diamonds from third countries will also come into effect.”
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