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Banks Snubbing Belgian Diamond Trade: AWDC
Apr 2, 2017 10:16 AM
By Rapaport News
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RAPAPORT... Belgian banks are discriminating against the diamond trade
by not lending to anyone linked to the industry, the Antwerp World Diamond
Centre (AWDC) has claimed.
The AWDC has proof that banks are systematically refusing
customers with any connection to the trade, for both personal and professional
banking affairs, it said last week. Lenders snub diamantaires even before they've had a chance to submit a formal application to become a client, the trade
body alleged.
The banks’ rationale is that the diamond trade carries a
high risk, the AWDC said. But it argued that this was an unfair perception,
given how much regulation companies must undergo and the degree to which
domestic and international organizations monitor diamond transactions.
Declining to offer banking services is not only
limiting the Antwerp trade’s prospects for growth, it’s preventing the industry
from becoming more transparent, the AWDC asserted, since a bank account is one
of the requirements for registering a diamond business.
“Ironically, the systematic refusal to open bank accounts
for those that are linked to the diamond industry is preventing companies
interested in (re)establishing their business in Antwerp from doing so,” it
said. “Without a bank account, you cannot trade nor establish a registered
diamond company.”
Antwerp’s diamond trade has increasingly struggled to get
credit. In January 2014, Amsterdam-based ABN AMRO began limiting its financing
of rough-diamond purchases to 70% of the transaction value, rather than the
whole amount. The following year, the trade suffered from the closure of the
Antwerp Diamond Bank.
The AWDC said it had met 10 times with Belgian finance trade
body Febelfin since 2014. Following those meetings, the trade body pledged to embrace the Sustainable Bank
Account Access Scheme, under which companies go through an official audit so
banks can keep their compliance spending low.
The Belgian trade’s new “Carat Tax” regime, which passed in
December and features an independent valuation of diamond companies’
inventories, will also improve transparency, the AWDC added.
“The AWDC regrets that despite all the efforts and the
attempts to engage in a constructive dialogue, the Belgian banks are still systematically
refusing banking services to people in our trade,” it said.
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Tags:
ABN Amro, Antwerp, Antwerp Diamond Bank, Antwerp World Diamond Centre, AWDC, Banks, Belgian banks, Belgian Diamond Trade, carat tax, Febelfin, finance, lending, Rapaport News, Sustainable Bank Account Access Scheme
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