Diamond industry slams looming sanctions on Russian gems

Receive free Diamonds and gemstones updates

We’ll send you a myFT Daily Digest email rounding up the latest Diamonds and gemstones news every morning.

Good morning. As the G7 inches towards imposing sanctions on Russian diamonds, our commodities correspondent has news of the gem industry’s outrage. And our climate correspondent previews the European parliament’s interrogation plans for the would-be climate commissioner.

Uncut gems

Belgium has given up its blockade of sanctions on Russian diamonds, but a proposal to do so on its own terms has sparked the ire of the diamond industry including the world’s largest producer De Beers, just weeks away from a G7 system being announced, writes Harry Dempsey.

Context: Moscow’s diamond exports have so far escaped EU sanctions, as Belgium has warned that its diamond trading hub Antwerp risks losing business to Dubai. About 90 per cent of the world’s diamonds pass through Antwerp and Russia made some $4bn from rough diamond exports last year.

G7 nations are now edging closer to a traceability system for diamonds that would pave the way for the world’s richest economies to ban Russian gems from the start of next year.

The Belgian government briefed journalists last week on the G7 scheme, after rumours swirled that the Antwerp World Diamond Centre (AWDC) had been working on a proposal.

But the proposal is causing consternation among 16 leading international diamond manufacturers and traders, who accused Antwerp’s diamond lobby of insufficient “transparency, accountability and inclusivity”, according to a letter seen by the FT.

AWDC said it provided “technical advice” to the Belgian government, and a final proposal was submitted to G7 countries and the European Commission after “broad government to government consultations” over summer.

“What we have put on the table . . . is a government proposal with inputs from the Belgian diamond industry and other governments, including other G7 members,” said a senior Belgian government official. “It is not an industry initiative. This is a government initiative.”

There are other proposals for a G7 mechanism to trace the origin of diamonds including one from the World Diamond Council, a global industry group, but it remains unclear what role Antwerp will play if sanctions are introduced.

According to a version of AWDC’s proposal to the Belgian government seen by the FT, Antwerp would function as the “gatekeeper” to verify the non-Russian origin of rough and polished diamonds entering the G7.

Chart du jour: Not all at once

EU ministers have snubbed Spain’s request to add Catalan, Basque and Galician to the EU’s list of official languages. Future efforts will focus on making Catalan an official language first.

Question time

Wopke Hoekstra, nominated to be the next EU climate commissioner, faces an intense grilling before he can be confirmed, writes Alice Hancock.

But he did not seem worried about written questions he has been asked to answer when the FT bumped into him in the corridors of the European parliament.

Context: The former Dutch foreign minister has been lurking around the parliament in preparation for his hearing by its environment committee on October 2. He is to replace former commissioner Frans Timmermans, who stepped down to run for Dutch prime minister.

Hoekstra’s questionnaire lays out five questions that push him on his ambitions on the EU’s climate 2040 target — which still needs to be defined — Green Deal proposals such as heavy duty vehicle standards, and on the EU’s positions at the upcoming COP28 climate summit.

Two questions push for answers on the centre-right lawmaker’s stance on fossil fuels, a topic he is familiar with. Hoekstra previously worked for oil major Shell and has been called out for supporting Dutch airline KLM with no-strings-attached subsidies during the pandemic.

“The European parliament expects him to draw a line in the sand on doubts about his qualifications,” said Linda Kalcher, a former parliament staffer and founder of climate think-tank Strategic Perspectives.

The real grilling will come when he faces MEPs in person.

Bas Eickhout, a Dutch Green MEP, said Hoekstra should be nervous about the hearing. Hoekstra’s political group, the European People’s party (EPP), has serially voted against Green Deal policies, including rules to preserve nature and most recently a law on air quality.

“Why should we on the progressive side of the parliament trust you as climate commissioner knowing what the EPP is playing at at the moment?” Eickhout said.

Hoekstra must win over two-thirds of the committee to get appointed.

Just pleasing the centre and rightwing politicians will not be enough, unless he tries to also court the far right. Instead, he will have to try to convince the socialists that he is a good choice — not an easy balancing act.

“He will have to go full on one side because if he tries to please both, that will not go so well,” Eickhout warned.

What to watch today

1. European parliament committee quizzes Spain’s economy minister Nadia Calviño and Claudia Buch, candidate for chair of the European Central Bank’s supervisory board.

2. King Charles III in Paris for a three-day state visit.

Now read these