The Federation of Belgian Diamond Bourses has introduced a ban on lab-grown sales in Antwerp’s four trading halls.
While synthetics trading is still rare in Antwerp, the umbrella group took action last month because it views the exchanges as promoters of natural diamonds, explained Willy Rotti, president of the federation. Lab-grown will still be permitted in companies’ offices, where most transactions occur.
“There was not [previously] a formal order that the trade of lab-grown diamonds was allowed or forbidden in the exchange, so we made it very clear: No trading of lab-grown in the trading hall,” Rotti told Rapaport News this week. “Before that, as far as we know, there was never trading of lab-grown in the exchange, but we put it [as] an announcement to make it very clear to the members.”
The federation placed notices in the bourses to inform members, dated September 19, and plans to reprimand those who fail to comply. “We don’t have a precedent, but I imagine there will be a fine and a sanction for a period,” Rotti added.
Antwerp has four diamond exchanges: The Antwerp Diamond Bourse, the Antwerpsche Diamantkring (for rough trading), the Diamond Club of Antwerp and the Vrije Diamanthandel. The Federation of Belgian Diamond Bourses can make decisions on behalf of those exchanges, as its board includes representatives of all those groups.
The Antwerp bourses have members that trade in both lab-grown and natural diamonds, but none that are purely synthetics dealers. Letting in such companies in the future would help the bourses maintain control over the market, as they would have the power to punish those who sell under false pretenses, Rotti said. However, it would also create an odd situation in which there are members that can’t do business on the trading halls, he noted, although they would have access to the offices and other benefits.
Exchanges around the world have been debating how to deal with companies that wish to sell lab-grown. The Bharat Diamond Bourse (BDB) in Mumbai is considering lifting its ban on synthetics, with India’s Natural Diamond Monitoring Committee currently assessing how to regulate the change and ensure segregation, Anoop Mehta, president of the BDB, told Rapaport News Thursday.
“We won’t consider anything unless we are really clear about the guidelines and rules, because we don’t want to get a bad reputation for the industry,” Mehta pointed out.
The Israel Diamond Exchange has held discussions about the sector this year. In May, the Dubai Diamond Exchange hosted the first tender of rough synthetic diamonds to take place at any member of the World Federation of Diamond Bourses (WFDB). The WFDB gives its members independence to decide on these issues themselves, its president, Ernie Blom, said at the time.
In January 2017, the Federation of Belgian Diamond Bourses adopted WFDB’s rules requiring clear descriptions on invoices and memo documents, and agreed to take disciplinary action against companies that fail to comply.
Image: The Antwerp Diamond Bourse trading floor. (Antwerp World Diamond Centre)