Verified compliance gives Antwerp competitive advantage

Belgium plays a prominent role in the battle against conflict diamonds. Early on, the country was involved in the establishment of the Kimberley Process, the international watch dog for the worldwide eradication of conflict diamonds. This year, both Antwerp and Brussels played host to an international Kimberley Process conference. A fine opportunity for Antwerp to emphasise the importance of strict compliance for the diamond industry.

Compliance is a primary concern for the Antwerp World Diamond Centre (AWDC), the official representative of the Antwerp diamond community. Trissia Stavropoulos, Head of Compliance at AWDC: “Over the past few years the importance of compliance has steadily grown. In our industry, compliance is a prerequisite if you want access to elementary services like bank accounts, insurance or finance. As a diamond trader, you have to prove you take compliance very seriously if you want the bank to trust you and provide you with the necessary services.”

The importance of compliance has everything to do with the particular characteristics of the diamond industry. Trissia Stavropoulos: “The diamond industry is a high risk business because of the product. Diamonds are very valuable, small in volume and easy to carry, with all inherent risks involved. Compliance, as an all-important counterweight, can reduce the risks involved. Diamond traders know they need to achieve a high compliance level to be serviced by a bank.”

Compliance first

The AWDC offers support relating to compliance to diamond traders. Trissia Stavropoulos: “We have a dedicated help desk offering advice and support with regard to compliance on a permanent basis. Almost every week, we organise seminars on legislation against money laundering and other topics. Diamond traders who take part in one of those seminars receive a certificate, validated by the government, that confirms their attendance.”

Compliance with legislation against money laundering is a concern of particular importance. Trissia Stavropoulos: “The legislation was developed on a European level and has to be applied by the individual member states. Putting the legislation into practice is a rather complex matter, especially for the diamond industry. Diamond traders are business people who focus on trading diamonds and have little knowledge of legal affairs. Still, I think it’s safe to say that we have made a great deal of progress. Inspections in the diamond district pointed out that both the compliance level and the traders’ knowledge of the legislation have improved quite a lot.” 

Competitive advantage

Compared to other diamond centres’ stance on compliance, Antwerp’s position is strong. Trissia Stavropoulos: “We like to see compliance as an extra asset for Antwerp. Europe leads the way with the legislation against money laundering. In other diamond centres like India, Israel and Dubai, similar laws were only recently introduced. Since Antwerp has a lot of practical experience with this legislation, the city has reached a high level of compliance.”

Compliance is equally important in dealing with large international jewellers. Trissia Stavropoulos: “Companies like Tiffany’s en Cartier are subject to stringent controls in their home countries and demand strict compliance from their suppliers. A lot of diamond traders in Antwerp sell diamonds to international jewellery brands. They know those partnerships are not going to last if they cannot reach a high level of compliance.”

Diamond Office

An important role in Antwerp’s efforts to reach maximum compliance is played by Diamond Office. Trissia Stavropoulos: “Diamond Office is a unique inspection body where the public authority works together with the private sector. Through Diamond Office, the Belgian Economics Department controls all incoming and outgoing shipments of both cut and uncut diamonds. The diamond experts who carry out all inspections at Diamond Office are trained by the industry. It’s a unique collaboration you will not find anywhere else. On top of that, the Belgian Finance Department carries out its own inspections with spot checks by the customs authorities. As a result, all diamond shipments are controlled at least once, and possibly twice.”

The seventeen experts at Diamond Office examine the value of the shipments, compare it to the sales amount mentioned on the invoice and verify the required Kimberley Process certificate, a document that rules out the presence of conflict diamonds in the shipment. Trissia Stavropoulos: “The customs authorities in other Kimberley Process member states verify those certificates as well. But the dual inspection of both cut and uncut diamonds is exclusive to Antwerp.”

Kimberley Process

Mark Van Bockstael, Head of Business Intelligence at AWDC, was involved in the genesis of the Kimberley Process. “The foundations of the Kimberley Process were laid out in May 2000 in Kimberley in South Africa. Countries in southern Africa, like South Africa, Namibia and Botswana, took the initiative. Thanks to careful mediation by the Belgian Foreign Office, Antwerp was able to play an important part in the process right from the start.”

The Kimberley Process counts more than 80 states among its members. They commit themselves to only trade diamonds with other member states and prohibit diamond shipments without a Kimberley Process certificate. The documents are validated by the government, carry a unique number and are protected against falsification. Since the introduction of the Kimberley Process, the share of conflict diamonds in the worldwide diamond trade has decreased sharply, from 15% to a mere 0,2%.

Antwerp as guest town

Every year, two international Kimberley Process conferences are held: a plenary conference and an intersessional. On both occasions the current situation regarding the battle against conflict diamonds is discussed. This year, Belgium played host to both meetings. While the plenary conference is held in Brussels on 12 November, the intersessional took place in Antwerp on 18 June. Mark Van Bockstael: “The meeting in Antwerp was a real eye opener for other member states. I am glad we were able to demonstrate the thoroughness and efficiency of our approach.”

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