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Antwerp
By Marc Goldstein
The Antwerp diamond sector needs to adopt new fiscal rules and enhance its social status to compete successfully on a global scale, according to Didier Reynders, the Belgian deputy prime minister and minister of foreign affairs. A major Flemish newspaper De Morgen reported on July 16 that Reynders made that assessment during a recent visit to the Antwerp World Diamond Centre (AWDC). While touring in the Antwerp Diamond Mile, Reynders was shown the new tender facility. It was built within the AWDC premises in order to help reinforce the position of Antwerp as a global rough diamond distribution platform by bringing companies to Antwerp to sell their goods. It was explained to him that the facility was enabling smaller producers, who account globally for about one-tenth of diamond production, to distribute their products without having to personally invest in an infrastructure that would inevitably turn out to be economically not viable for them. Reynders, who, as minister of foreign affairs, is familiar with the various aspects of international trade, offered the opinion that in order for Antwerp to be able to remain competitive on the international scale, there is a need for much more than just a tender facility. Referring to centers such as Dubai or Hong Kong, he said that “The Antwerp diamond sector needs to be able to compete on a level playing field with its international competitors. It’s pointless to even start comparing it with any other Belgian sector or city.”
On the occasion of the minister’s visit, Ari Epstein, chief executive officer (CEO) of the AWDC, stressed that Reynders was well aware and supportive of what is referred to as a “tonnage tax” or “diamond carat tax” (DCT) on diamonds. “In the Antwerp Diamond Master Plan we launched in early 2012, we pleaded for the implementation of a sustainable fiscal tax system that could provide sufficient support for the Antwerp diamond companies. A DCT would provide a complete legal and transparent framework for taxing on the basis of weight alone,” according to Epstein, with none of the confusion of assessing value to determine taxes. The proposed tax system would make Antwerp more competitive with other diamond centers. “We are very grateful Minister Reynders pledges his support in this matter,” elaborated Epstein.
For years, the abuses by a minority of diamond dealers have given the city’s fiscal and judicial authorities an excuse to ceaselessly harass the entire diamond sector. That interference in their businesses has caused many leading Antwerp diamantaires to move themselves, their families and their companies to other, more hospitable diamond trading centers. Even if Reynders’ words were comforting and reassuring, and even if they represent something of a recognition of the unfair competition Antwerp has been suffering over at least the past decade, it’s far from enough. More is needed, including a political will within Belgium to accomplish the systemic change that is required. Without support and commitment across many business and government sectors, there are limits to what AWDC can accomplish on its own. Diamonds may love Antwerp, but Belgium and Europe must begin loving its diamonds if they want the city to prosper.
AWDC sources reported that “On Friday, August 2, 2013, the Antwerp authorities announced a breakthrough in the investigation of a tiger kidnapping that took place on October 11, 2012, in Antwerp. At that time, three men entered the home of an employee of the Indian diamond company Kiran bvba. While the man’s wife was held hostage, he was forced to empty the vaults of the Kiran offices in the Hoveniersstraat in the Antwerp diamond district. The total value of the stolen diamonds was estimated at $13 million.” Police have indicated from the very beginning of the investigation that the tiger kidnapping could have been an inside job, with the willing involvement of the alleged victim, the Kiran employee. The employee is one of five suspects in the case. Four of the five suspects are currently in custody and are said to have confessed to involvement in the case. A large part of the stolen goods was recovered during a raid in Antwerp on July 31. In the Flemish newspaper Het Laatste Nieuws, Ramesh Mehta from the Indian community in Antwerp commented that the arrests are “a good thing for Belgium. Our threats to move to other diamond centers were unfounded. We were shocked by the fact this young woman was held hostage for hours. Now we are even more shocked to find out her own husband staged the whole thing.” Article from the Rapaport Magazine - September 2013. To subscribe click here.
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