Prosecutors in Belgium put a trader on trial after a major police raid on his business, arrests in Israel as police investigate illegal financial activities at the diamond exchange, in India the government decides to battle round-tripping, and the U.S. State Department is talking with NGOs about how to change diamond trade regulations. Ladies and gentlemen, welcome to the New Normal 2.0: The Tightening Oversight. Unlike the first New Normal, which dealt with the economy of the diamond industry, the sequel is all about law and controls. In both cases, diamond traders need to display flexibility and have the ability to adapt to change.
While the Antwerp World Diamond Center (AWDC) is working relentlessly to improve relations with the Belgian government and at the same time make the grievances of the industry known, there are those on the other side of the fence that make sure that damaging articles about the diamond industry appear in the local press.
In Israel, despite brave attempts to convey it is business as normal, the press carries a number of reports every week about the illegal bank that allegedly operated from within the exchange compound.
In India, the press routinely reports about money laundering in the trade.
The press, of course, plays an important watchdog role in society. However, it would be naïve to not understand that the press also reflects wider, pre-existing social norms among its consumers.
This means that while smuggling, money laundering and fraud of any kind are of course wrong by all counts, the powers that be are now focusing their attention on the diamond industry, mainly the loose wholesale sections.
The inaugural statement by Ambassador Gillian Milovanovic, the new Kimberley Process chair, that the U.S. State Department is in constant touch with NGOs that have never even been part of KP, reveals that the U.S. is entertaining new ways to supervise the global diamond industry.
When we at IDEX Online get a call from the general press asking to understand something about the diamond world, we usually need to start by addressing a preconception, a bias about the diamond industry – that it is one populated by crooks. That is far from the truth and overcoming this image is a regular task.
The problem is that this school of thought is shared by ministers in the Indian government, police officers in Antwerp, NGOs in London and maybe some State Department officials in the U.S. This has a negative effect on the industry and it is the responsibility of the industry to dispel this prejudice.
The industry needs to publicly embrace self-regulation of the kind that will prevent wrong doings while signaling to the outside world that externally imposed regulation is not needed. Only then could traders do business by focusing on business, without having to always worry about who may be knocking on the door.