RAPAPORT... One of the major concerns of the Antwerp diamond industry — the Supplier of Choice (SOC) program — was addressed during the Diamond Trading Company (DTC) dinner with sightholders that was held on January 16. It was announced that there would be less interference with the internal workings of companies in the SOC program. But exactly what that meant and how it will affect sightholders remain to be seen. One of the attendees elaborated that “Of course, they never said that they’d just abandon it, but rather that improvements would be made so as to remedy its weaknesses. In fact, it was merely like a political speech: you had to read between the lines and remember the precursory signs were already there.” Others, such as Shimshon Parnass of AMC, have a more positive approach. “I came back from there with optimism, which is certainly reassuring after the depressing year our industry just went through.” Roby Taché of Taché Diamonds confirmed that “the market has been reacting positively to the announcement.”
Others are more cautious. Some said that the whole change is merely a matter of interpretation. “What does it mean when they say they’re going to stop controlling you, provided you’re efficient? I say that, instead of vertical bars, they’re placing horizontal ones…but it’s still a prison,” commented one sightholder.
Surprise RaidOn January 24, the police conducted another raid on the Antwerp diamond square mile. The raid comes one year after a similar raid on the Antwerp offices of Monstrey/Ferrari, a shipping agent. That case is still under investigation. In the recent raid, lots of diamond inventories were confiscated, and bank accounts seized. People were apparently taken for interrogation. At least 22 police cars and 90 policemen participated in what some already nicknamed “Krystall Nacht,” although it might be better named “Diamond Nacht.” Barely one hour after the first police car entered the Hoveniersstraat, the TV crews were there filming.
A member of the Antwerp World Diamond Centre (AWDC), formerly known as the Diamond High Council (HRD), commented laconically: “Nobody’s above the law, and abuses must be punished. However was it necessary to cause such a turmoil? Wouldn’t it be possible to do things more quietly, without giving the impression that the police raid is a way of conveying a political message?”
If there was any underlying message, what could it be? At this stage, nobody in the administration appears willing to take real responsibility for the collateral damages caused by this unprecedented raid. A diamond manufacturer said that “By 9 o’clock this morning, the street was paved with police cars. It was not possible to work.” Another explained that he had a buyer waiting for several brokers who didn’t even show up after the police arrived.
Philip Claes, AWDC spokesman, said that ten searches had been carried out. “The situation is quite delicate, because, in order to avoid any risk of compromising the work in progress, the general prosecutor is not willing to give away too much information or explanation regarding the investigation. However, the general prosecutor confirmed that it’s all about the further development of an old case. After all the efforts we’ve made to bring Antwerp into the age of transparency, we regret we still have to deal with some ghosts of the past.”
Shashin Choksi of Indo Belge Diamantaires Association (IBDA) makes the following suggestion: “This is proof that bilateral negotiations are not enough. If peace is to be restored in Antwerp, it can’t be left just in the hands of the diamantaires and the politicians. The fiscal and judicial authorities must join too. Our community and the Belgian authorities should understand that there can’t be a worse signal to send to the rest of the world. We’ve had calls from Hong Kong, Israel, New York and Mumbai inquiring about the consequences of the raid. This is exactly the kind of events that directly benefits Mumbai or Dubai.”
André Gumuchdjian of the Belgian Polished Diamond Dealers Association (BVGD) offered this solution: “The Monstrey/Ferrari case is directly linked to the difficulty of exporting goods from Antwerp to the rest of the world. Such structural problems would be easily solved if the government implemented the free zone it promised at the Zaventem airport, in exchange for our acceptance of the HRD restructuring.”
The free zone has been under discussion for 20 years. Meanwhile, people must find a way of working. It’s been reported that about 200 to 300 companies are liable for a raid; better to say everybody in Antwerp.
Blood DiamondFreddy Hanard, managing director of AWDC, confirmed that the AWDC has indeed invited Leonardo Di Caprio, one of the stars of the “Blood Diamond” movie “to come and visit Antwerp.” While the AWDC said there has been no official response, the Antwerp newspaper Gazet van Antwerpen, reported that DiCaprio, although appreciative of the invitation, declined the offer, arguing that he didn’t see the need to come to Antwerp, given he now knew all there was to know about diamonds.
The MarketplacePolished
• January started quite strongly, after the holidays. Demand has been resuming for all goods.
• Demand was very strong from K color down, across the board, especially 1-carater up.
Rough
• Prices of rough increased remarkably.
• Big premiums again on Diamond Trading Company (DTC) boxes — some say up to 10 percent — which may be due to improvement in quality in the boxes.
Article from the Rapaport Magazine - February 2007. To subscribe click here.