The diamond industry has added several layers of legitimacy this year as more companies are complying with standards set out by banks, regulators and suppliers, even if they’re still burdened with a “high-risk” profile.
Bringing that improvement about has been an arduous journey that is by no means complete. It will take a lot more for the trade to fully reject traditions such as closing a deal with a simple handshake and a blessing of “mazal u’vracha.”
But industry leaders believe it is vital to enable a more bankable and profitable industry in the long term.
“Ultimately, it’s a survival strategy,” said Howard Davies, vice president, commercial development at De Beers. “The market may continue to be turbulent but businesses that are compliant will be better positioned to deal with the volatility.”
Global laws have influenced demand for transparency, better controls and reporting, and the diamond industry has to move with the times, added Ernie Blom, president of the World Federation of Diamond Bourses (WFDB).
Cash clamp-down
The banking sector tightened its lending requirements as compliance issues came to the fore after the 2008 financial crisis and as the Basel laws were introduced even before that, explained Erik Jens, head of Diamond & Jewellery Clients at ABN Amro.
Meanwhile, the diamond sector came under further scrutiny given the global crackdown on the use of cash.
