Ari Epstein, the Chief Executive of the Antwerp World Diamond Centre (AWDC), has resigned.
While he did not give a reason, it is widely believed that the organisation’s split over the way sanctions on Russian diamonds are handled was behind his decision.
Since Brussels imposed its “diamond package”, the 12th set of sanctions on Russia, all diamonds entering the European Union are now being channelled through the AWDC.
The system only has been fully in force since March 1 – but it is not without problems.
Isidore Mörsel, the AWDC President, praised Epstein in a press statement saying: “Under his leadership, AWDC has experienced unprecedented growth.”
Belgian news outlet Doorbraak reported that, in mid-March, Mörsel together with 150 Antwerp traders co-signed a letter from Al Cook, the CEO of diamond juggernaut De Beers, expressing concern about the adverse effects of the existing approach to sanctions on Russian diamonds.
They called for a “thorough review of the procedures”, asserting that the regulations were driving up costs and causing them to lose customers.
That dissatisfaction, together with international pressure, is said to be the reason for the departure of Epstein, who had led AWDC since 2010.
Late in 2023, David Gotlib, who was serving as the chairman of the AWDC board of directors, also resigned.
Sanctions against Russian diamonds have been a sensitive issue for some time, being seen by some to possibly harm countries that trade the precious stones more than Russia itself.
Antwerp is one of the world’s most important diamond centres. Around 85 per cent of all rough diamonds and 40 per cent of all industrial diamonds pass through the Flemish city.
For a long time, Belgium resisted a ban on Russian diamonds as it wanted a more tailor-made approach, targeting Russia while safeguarding the interests of the Belgian diamond trade. That was especially so with Dubai and India ready to take over the leading position in diamond trade.
After long negotiations at the G7 level under the auspices of Belgium, where Epstein was an important player, a track-and-trace system was created for an international framework. The EU went on to include this as part of its 12th sanctions round.
The new traceability protocol was based on various control mechanisms, including the Kimberley Process Certification Scheme. That international method was established in 2003 to curb the flow of conflict diamonds or “blood diamonds” into the global market.
The protocol is akin to the Swift system in the financial sector. Swift facilitates international communication in payment transactions, ensuring the reliable identification of banks, customers, transferred amounts and accounts.
With Belgium leading the way, it ensured Antwerp would remain the all-important trade hub for rough diamonds.
The AWDC obtained a monopoly on enforcing the European sanctions against Russian diamonds, but members of the board were unhappy with the outcome.
Certain parties expressed concerns about potential loss of market influence. In the co-signed Cook letter addressed to Belgian Prime Minister Alexander De Croo, the De Beers CEO lamented what was seen as sluggishness by the AWDC in regulating Russian diamonds, which only started certification on March 1.
Mörsel has historical ties with Alrosa, a Russian group of diamond-mining companies that together with De Beers reportedly controls much of the world market. Among the grievances outlined were “notable delays, bottlenecks and expenses associated with diamond imports to Belgium”.
At the beginning of March, the AWDC said most problems had been fixed.
“Waiting times now consistently fall below the 24-hour threshold for shipments accompanied by complete files,” said Epstein at the time.
“A testament to the efficacy of our recent initiatives and especially of your efforts, is the dramatic decrease in incomplete files, a shift from 90 per cent to less than 15 per cent, with figures continuing to improve.”
Epstein indicated the AWDC was in the final stages of discussion but, apparently, that was not ultimately to his satisfaction.
Internationally, other countries have long been unhappy with the Antwerp monopoly. Southern African nations, where De Beers is prominent, and India wanted to get rid of it altogether and to be able to undertake their own officially recognised certifications.
It is not known who will replace Epstein as CEO.
Brussels Signal reached out to De Croo’s Cabinet about possible consequences but, as of writing, had not received comment.
