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Brexit Could Halt UK Rough Trade
Oct 21, 2018 5:45 AM
By Rapaport News
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RAPAPORT... The UK will temporarily be unable to import and export rough
diamonds if the nation leaves the European Union without an exit deal, the
government has warned.
The UK is currently a member of the Kimberley Process (KP) by
virtue of its being in the EU, enabling it to trade internationally in rough
diamonds. However, once so-called Brexit goes into effect on March 29, it will need to join the KP in its own right. Although the government is
negotiating an EU departure deal that would keep it in all international agreements,
including the KP, during an interim period, a “no-deal” Brexit could
still occur.
“In this very unlikely case, you would not be able to trade
internationally in rough diamonds until we had secured
our KP participation,” Deirdre Brown, head of the UK Foreign &
Commonwealth Office’s multilateral policy unit, wrote in a letter to traders
earlier this month.
“To prepare for this scenario, you should consider whether
you wish to make arrangements to have any rough diamonds on consignment or loan
to countries in the KP (including the EU) returned to you before the
UK has left the EU to avoid delays until we secure independent participation,”
she continued.
The UK government’s plan is to reach a deal with the EU that
would ensure a transition period until the end of 2020, though both sides have considered
an extension. After that, the UK would have to move to independent membership
of the KP.
“A scenario in which the UK leaves the EU without
agreement…remains unlikely given the mutual interests of the UK and the EU in
securing a negotiated outcome,” Brown added.
The UK’s rough imports are minimal since De Beers moved its
sightholder sales from London to Gaborone, Botswana, in 2013. However, some miners
still send goods initially to London before shipping them to Belgium, the Antwerp World Diamond Centre (AWDC) said.
“These goods are then transported through the EU common
market to Antwerp to be sorted and traded here,” the
AWDC explained Monday. “It is AWDC’s goal to ensure that these trade flows continue to
pass through Antwerp, even after Brexit.”
Image: Rough diamonds.
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Tags:
Antwerp, Belgium, Brexit, Kimberley Process, london, Rapaport News, Rough Diamonds, rough trade, UK
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