Antwerp Diamond Report 2014

Preface

Introduction

The impressive figures booked by the Antwerp diamond community speak for themselves, yet they do not tell the whole story of 2014. With diamond imports and exports setting record highs in terms of value, Antwerp again confirmed its leading role in the global diamond trade, remaining the preferred global partner.
The opportunities as well as the challenges of the global diamond industry are well known. Issues related to sustainable financing and a global economic downturn made for a challenging year, but we are now experiencing a slow but steady recovery – particularly in the largest as well as emerging consumer markets.
In 2014, AWDC reinforced ties with important diamond countries such as Russia, Canada and with southern African producers, hosting their leading representatives. We visited and solidified trade relations in crucial markets worldwide, including China and the USA. And we took more networking initiatives than ever before, locally as well as internationally.
“Antwerp has been the leader of the diamond industry for over 500 years, and has risen above every challenge we have faced. The Antwerp World Diamond Centre sees no reason for this to change anytime soon”, says Ari Epstein, CEO of AWDC. “Temporary setbacks are just that – temporary – and 2014 is certainly not the final chapter in the amazing story of diamonds.”

Mission statement AWDC

AWDC is a Public, Private Cooperation, officially representing and coordinating the Antwerp diamond industry. Our mission is twofold: strengthening Antwerp’s position as the world’s primary diamond trading center and strengthening the image of diamonds to a general audience.
We do this through Diamond Office, where we streamline the vast import and export flow of diamonds in and out of Antwerp and through a wide variety of dedicated marketing campaigns, services, conferences, trade fairs, economic missions and much more…
Our goal is to service all those involved or interested in our fascinating stones, from professional players like the mining giants to the bride-to-be, looking for her perfect wedding ring.
Antwerp is where all the key elements in the industry are concentrated: home to all the major mining companies that unearth these treasures, to over 1,700
registered diamond companies originating from all over the world, to the dedicated diamond banks and insurance brokers, the forwarders that are equipped to send the precious parcels to every corner of the world, the best polishers in the world and high-tech researchers who get the best out of each and every rough stone.
More than five centuries of diamond history lives on in Antwerp every day, in the jobs of over 32,600 people that work here and abroad.

Diamond Office

Diamond Office is the place where we streamline the vast import and export flow of diamonds in and out of Antwerp. 84% of all rough diamonds and 50% of all polished diamonds worldwide pass through Antwerp and thus through the Diamond Office. Every day, approximately 250 million dollars in diamonds pass through Diamond Office.
The Diamond Office (D.O.) acts as the supervising body for the Belgian government, declaring and controlling all imports and exports of all types of unset polished and rough diamonds, industrial diamonds, boart, synthetic diamonds and diamond powder, natural as well as synthetic. The D.O. is a collaboration between AWDC and two governmental bodies, FPS Economy and FPS Finance (Customs). It is the only customs office in Belgium where diamonds can and must be declared for import in and export outside the EU. Every rough diamond that enters D.O. with its KP certificate, and is thus traded in Antwerp, is conflict free. When a rough diamond leaves Antwerp, it receives
a new certificate. This process is repeated when the rough stones enter a new market (KP participant).
Three FPS Economy and three FPS Finance staff members are present in the D.O. at all times. The FPS Economy Licensing Department is responsible for the physical checks of all imports and exports of diamonds. Sworn experts working under the supervision of the FPS Economy conduct these checks.
The 18 sworn experts open all shipments and conduct an examination according to a number of parameters. The weight, value and classification of diamonds are compared with the information on the trade documents. This form of 100% physical controls does not exist anywhere else in the world. Most countries work with spot checks on the basis of a risk analysis.
Customs conducts a control of all import- and export declarations prepared by AWDC personnel within the D.O. Since 2011, AWDC has the status of a fully Authorized Economic Operator (AEO). This confirms that FPS Finance (Customs) recognizes AWDC as a reliable partner in the field of customs procedures as well as security. Within D.O., AWDC is not only a declarant of all imports and exports from the Belgian diamond sector; the organization also offers assistance in all import and export formalities.
This triple control within D.O. (AWDC, FPS Economy and FPS Finance) ensures that the Belgian diamond sector is not only the most controlled sector in Belgium, but is also the most transparent in a global perspective.

Antwerp Diamond Data 2014

Record figures confirm leadership of Antwerp diamond industry

In 2014 Antwerp clearly confirmed its leadership role in the global diamond trade and remains the preferred partner for diamond trade worldwide. Despite heavy competition from rivaling diamond hubs, more goods were imported and exported

Polished trade up 4% in value

Contrary to the rough trade figures, polished trade is clearly under increased pressure. On average, in terms of volume, exports of polished goods fell by 5%. At the same time, the total value of exported year on year. A total of 227.2 million carats of rough and polished diamonds were imported and exported, with a total value of 58.8 billion USD, surpassing the 2012 record of USD 56.5 billion.

Rough trade up 10% in value

Imports as well as exports of rough diamonds rose significantly compared to 2013. Compared to 2013, imports rose 10% in terms of volume, amounting to a 13% increase in value. In total, no less than 99.9 million carats of rough diamonds were imported, for a total value of USD 14.9 billion.
As for exports, 114.5 million carats of rough diamonds were exported, valued at 15.7 billion USD, equaling a volume increase of 7.5% and a value increase of 7%.
polished diamonds rose by 4%, indicating more high value goods were traded. Total exports of polished diamonds amounted to 6.4 million carats, with a value of USD 14.4 billion.

Main trading partners

Antwerp’s main import partners for polished goods are in terms of volume consecutively India, Hong Kong and the United Arab Emirates. Similarly, the top three differ in terms of imported value, with the United States ranking first, followed by Hong Kong and India.
Looking at Antwerp’s most relevant trading partners in terms of polished exports, we can identify the same markets as last year. Hong Kong remains the number one destination for polished diamonds in terms of carat, followed by the United Arab Emirates and the United States in respectively second and third place.
From a value perspective, the ranking is somewhat different, with the United States in pole position, followed by Hong Kong in second and Israel in third place.
The bulk of rough diamonds leaving Antwerp is destined for India, followed by the United Arab Emirates and Hong Kong. In terms of rough imports, the
Russian Federation remains Antwerp’s first trading partner. The United Arab Emirates and Botswana complete the top three countries of provenance in terms of rough imports.

Difficult situation for Antwerp diamond dealers

In spite of these record figures, 2014 was a difficult year for diamond traders throughout the global diamond industry.
The announced wind-down of the Antwerp Diamond Bank and continued uncertainty due to the lack of liquidity and diminishing access to diamond financing and banking services weighed heavily on the industry.
In addition, traders in diamond hubs worldwide are confronted with narrowing profit margins. This development is largely due to strong rough prices, caused by a combination of natural scarcity and the main mining companies’ solid positions. Polished prices have not risen at the same pace. Consequently, diamond traders were forced to sell their goods at lower prices, with average profit margins falling steeply from 2-3% to 0-1%.

ROUGH DIAMOND IMPORTS

ROUGH DIAMOND IMPORTS (Carats)

2013 | 2014

ROUGH DIAMOND IMPORTS (USD)

2013 | 2014

ROUGH DIAMOND EXPORTS

ROUGH DIAMOND EXPORTS (Carats)

2013 | 2014

ROUGH DIAMOND EXPORTS (USD)

2013 | 2014

POLISHED DIAMOND IMPORTS

POLISHED DIAMOND IMPORTS (Carats)

2013 | 2014

POLISHED DIAMOND IMPORTS (USD)

2013 | 2014

POLISHED DIAMOND EXPORTS

POLISHED DIAMOND EXPORTS (Carats)

2013 | 2014

POLISHED DIAMOND EXPORTS (USD)

2013 | 2014

POLISHED DIAMOND EXPORTS BY COUNTRY

* The figures in the tables and graphs on page 12 reflect the export and import figures of polished diamonds, as issued by the Antwerp Diamond Office on a monthly basis, providing an insight into the trends of the Antwerp diamond trade throughout the entire year. At the end of the year, the Antwerp Diamond Office calculates and issues the total yearly figures, based on updated monthly figures, as displayed on page 11, which explains potential discrepancies in the sums of

the tables of the entire year.

Looking back at the last ten years of Antwerp Diamond Data

The graphs below clearly indicate a gradual decline over the last ten years of the volume of rough as well as polished imports and exports, punctuated by a sharp decline in 2008-9 when the industry as a whole experienced a downturn. Significantly, we note an equally steady increase in the value of imports and exports of rough as well as polished diamonds, with the exception of the same period between 2008-9. Considered together, these indicate consistent appreciation of the value/ct. ratio.

POLISHED DIAMOND (Carats)

EXPORT | IMPORT

POLISHED DIAMOND (USD)

EXPORT | IMPORT

ROUGH DIAMOND (Carats)

EXPORT | IMPORT

ROUGH DIAMOND (USD)

EXPORT | IMPORT

1. AWDC around the world

The Antwerp World Diamond Centre (AWDC) represents the Belgian diamond industry internationally. The foundation is responsible for the advocacy of the Belgian diamond industry and trade in general. To expand the diamond trade in Antwerp we try to proactively increase the existing business but also to introduce new segments to the market. In 2014, AWDC implemented a variety of initiatives to identify new possibilities and partnerships. To this end, we initiated activities to reinforce ties with key producers around the world and to facilitate various opportunities for the industry to connect with relevant stakeholders throughout the diamond pipeline. During these missions, AWDC focused on rough diamond as well as polished diamond with the objective of promoting the Antwerp diamond industry globally as well as locally.

1.1 Rough Diamond Trade

KP Meetings

AWDC sets the tone at KP seminar in Washington

In May, a high-level seminar on Good Practices in the Diamond Sector took place at the Belgian Embassy in Washington. The seminar focused on the lessons learned from the Kimberley Process (KP) and on creating a roadmap for the way forward. AWDC endorsed the KP as the best preventive system to tackle the trade in conflict diamonds and helped to identify and elucidate the challenges facing the KP now and in future.
The large number and diversity of seminar participants – including a representative from the current KP Chair, ambassadors from producing countries, the US State Department, NGOs and industry stakeholders – attested to the importance atached to the Kimberley Process. Some stakeholders observed that internal controls are needed and the lack of a level playing field must be addressed in order to keep the KP strong. A significant number of participants articulated that the KP is a process and hence requires continued development, provided this occurs gradually, allowing the relevant stakeholders time to adapt.

PAC calls for changes at KP Intersessional in Shanghai

In June, the Kimberley Process (KP) Intersessional Meeting kicked off in Shanghai, China, under the auspices of KP Chair Mr. Wei Chuanzhong. As the Intersessional’s main sponsor, AWDC hosted an exclusive Gala Dinner for the KP intersessional delegates.
As far as current challenges encountered with respect to the diamond trade and their broader effects, discussions took place surrounding the worrying situation in CAR. Mr. Alan Martin, Research Director at the Partnership Africa Canada (PAC), referred to the need for increased vigilance in neighboring countries and for all diamond trade hubs to step up efforts to ensure that these diamonds do not enter the market. AWDC believes that only these types of sustained strict controls and adherence to standards will lead to continued success in combatting conflict diamonds and should be the benchmark for all other trade centers. In addition to the demands placed on the KP, its support to aid countries returning to the KP was highlighted by the discussion of the case of Ivory Coast and the lifting of the UN embargo. We must continue to live up to our obligations and continue to work towards a strong and effective KP that is implemented fully by every participant, safeguarding the integrity and the goals of the KP.

KP Mission to Angola

Fourteen years ago, Antwerp was the first to start the fight against the trade in conflict diamonds, which were used to fund, among other things, the civil war in Angola. Antwerp made it clear that it did not and would not support trade in conflict diamonds. At the same time we assisted Angola in the development of an efficient and stringent control system, so that the Angolan government would one day be able to continue its diamond trade in a controlled manner. On October 23, the AWDC embarked on a mission to Angola. AWDC participated in a number of important meetings with the Minister of Mines, the Minister of Economy and the future Chairman of the KP. In support of Angola’s KP chairmanship in 2015, AWDC, as requested by the Angolan government, also organized a number of workshops on the Kimberley Process Certification Scheme.

AWDC attends Kimberley Process

Plenary Meeting in China

In November, AWDC attended the 12th edition of the Kimberley Process Plenary Meeting in Guangzhou, China. Among the participants were representatives of governments from more than 50 countries. AWDC was part of the World Diamond Council (WDC) delegation.
An important highlight of the meeting was a decision made with respect to the Administration Support Mechanism (ASM), which is managed and financed on behalf of the Kimberley Process by WDC member organizations. Launched in 2013, the ASM provides valuable assistance to the Kimberley Process Certification Scheme.
It was agreed during the plenary meeting that the ASM would henceforth provide educational and training tools for all KP participants.
As a result of an assessment by the AWDC, a targeted working group was established for the purpose of addressing certain challenges concerning the valuation and mapping of the rough diamond trade, and for providing solutions to these issues. Furthermore, relevant recommendations were welcomed concerning money laundering and terrorism financing risks associated with the supply of rough diamonds, as outlined in the 2013 Financial Action Task Force Report.

Conferences

Second Zimbabwe Diamond Conference in Harare, Zimbabwe

In November, the second Zimbabwe Diamond conference took place in Harare, Zimbabwe, with ‘Completing Zimbabwe’s diamond potential for the future’ as the central theme. Participants included African mining ministers, diamond mining companies, and leading diamond manufacturers and traders from around the world. Ari Epstein, CEO of the AWDC, delivered a speech to the numerous key stakeholders in attendance.
Zimbabwe has always been, and still is a key trading partner for the Antwerp diamond industry. Antwerp is proud that Zimbabwe held its first local tender, based on the Antwerp Tender System. The government’s initiative to start holding its own diamond auctions is most certainly a positive step towards continuing to build a strong and robust future for the Zimbabwean diamond industry.
AWDC’s presence at the conference demonstrated its continued cooperation with Zimbabwe so as to secure mutually beneficial rewards, based on full transparency.

AWDC Missions

Moscow

Over the past few years, the Russia- Antwerp relationship has been thriving. In terms of imports, Russia remains one of the most important suppliers of rough diamonds for Antwerp, representing 24% of all rough imports in value. ALROSA is the leading global diamond producer and Russia’s largest player on the diamond market, and Antwerp is home to the largest concentration of ALROSA’s long-term clients in the world.
In March, a delegation from the AWDC and representatives of 35 Antwerp diamond companies embarked on a mission to Russia to meet with a delegation of Russia’s Gokhran (the State Precious Metals and Gems Repository), ALROSA’s top management and other stakeholders from the Russian diamond industry.
A Memorandum of Understanding was signed by AWDC’s President Stéphane Fischler and Mr. Andrei Yurin, Head of the Gokhran of Russia, the State Precious Metals and Gem Repository.
A few months prior to the mission in Moscow, ALROSA signed a Cooperation Agreement with the AWDC that further formalized their cooperation over the next three years. The agreement included the intention for both parties to contribute to the development of a competitive rough and polished diamond market in Russia and to the promotion of rough sales in Antwerp, a formalized exchange of information and knowledge on various facets of the industry and educational opportunities.

Technical assistance project, Ivory Coast

In 2003, the UN imposed sanctions on Ivory Coast, forbidding the country to export diamonds. Now that the Ivory Coast’s political situation has stabilized and its economy is recovering, diamond production is back in the picture. But in order to actually start trading again, Ivory Coast must meet the stringent requirements of the Kimberley Process Certification Scheme, and the Ivorian government must establish a control mechanism.
Belgium’s FPS Foreign Affairs and the AWDC helped the Ivorian government to set up a monitoring system so that they would be able to adhere to the strict conditions of the Kimberley Process, and resume their diamond exports.
The AWDC provided training to senior Ivorian officials to enable them to become diamond experts. This also involved an in-depth course on Kimberley Process standards and regulations, as well as instructions on how apply them to their work as diamond experts. The 8-week training program was funded by the FPS Foreign Affairs and aimed to provide the Ivorian officials with the necessary knowledge to estimate the value of a diamond. It also taught them everything about the stringent regulations of the Kimberley Process, and how that knowledge can be applied to everyday practice.
Experts believe Ivory Coast has the potential to produce 150 to 200,000 carats of rough diamonds annually in the years ahead, representing a value of $25 million.
Ivory Coast will launch its new control mechanism on January 1st 2015. The UN will monitor developments closely and
will publish an assessment report every six months. In addition, the Kimberley Process Certification Scheme’s review missions
will visit Ivory Coast to make sure that all conditions are being met, and to formulate
recommendations if necessary.

1.2 Polished Diamond Trade

Economic Missions

Antwerp trade mission to Shanghai

On October 14, the Antwerp and Shanghai diamond and fashion industry attended the exclusive Antwerp Diamond Night in Shanghai, celebrating the 30th anniversary of the sisterhood ties between the cities
of Antwerp and Shanghai. The glamorous event was organized by the AWDC and officially opened by the Mayor of Antwerp, Bart De Wever. A glittering fashion show was the highlight of the evening, with diamond jewelry from Antwerp adding sparkle to the clothes on the runway.
The Antwerp Diamond Night provided an excellent opportunity for Antwerp diamond traders who traveled to Shanghai to meet and network with their Chinese counterparts. The AWDC also signed a Memorandum of Understanding with the Shanghai Diamond Exchange, aiming to improve cooperation between the two trading centers even more in the years to come.
China is the fastest growing market for diamonds. Behind this success are the growing Chinese middle class and young Chinese couples that believe that a diamond ring is a prerequisite for a good marriage. The AWDC strongly believes
in the mutual benefits of trade relations between China and Antwerp. With over 550 years worth of knowledge and experience, Antwerp guarantees excellent quality, a controlled and transparent trade and favorable prices.

Royal trade missions

Royal trade mission to Malaysia

Antwerp and Malaysia have been trading polished diamonds for some years now, but trade figures are somewhat volatile. Determined to boost trade relations with Malaysia, 140 Belgian companies from various industries joined HRH Princess Astrid of Belgium on the Royal trade mission to Kuala Lumpur on November
25. During their stay, eight Antwerp diamond companies attended a B2B networking event organized by the AWDC in collaboration with Malaysian jewelry organization FGJAM, Federation of Goldsmiths and Jewellers Associations of Malaysia. Additionally, a seminar was held
concerning KP capacity building.
The Malaysian diamond market is at a turning point. Malaysians are hooked on jewelry, having a love for accessorizing with necklaces, earrings, rings and bracelets. In
2013, Malaysia saw a significant increase in demand for diamonds. Diamond dealers are hopeful thanks to a number of events that took place last year. The
Malaysia International Jewellery Fair (MIJF) and the Malaysia International Jewellery Festival 2013 contributed to an increase in Malaysia’s demand for luxury jewelry.

Royal trade mission to Singapore

Having traditionally acted as a link in the diamond supply chain between Antwerp and India, Singapore is now also becoming a booming retail market for jewelry. More precisely, Singapore’s jewelry market is expected to increase by an average of 3% each year over the next five years. Diamonds could play a major part in that development.
Since Singapore is not only a growing retail market for diamonds, but also a financial hub that is home to numerous branches of international banks, the AWDC organized a seminar on the basic principles of diamond funding. Banks such as First Gulf Bank PJSC, CTBC Bank Co. Ltd., Deutsche Bank AG, Union Bancaire Privée, UBP SA Singapore Branch and Indian Overseas Bank were among the participants. With this seminar, AWDC contributed to the Belgian Royal trade mission to Singapore, strengthening the financial ties between Belgium and Singapore.
To introduce Antwerp diamonds to Singapore, the AWDC organized an Antwerp Diamond Night attended by HRH Princess Astrid of Belgium, as part of the Belgian Royal trade mission. During the mission, 8 Belgian diamond companies and 50 Singapore diamond dealers had the opportunity to meet and greet during a B2B networking event, which preceded the Antwerp Diamond Night.

AWDC Missions

AWDC B2B mission to Miami, Los

Angeles & Las Vegas

The destinies of Antwerp and the United States have been inextricably intertwined since the beginning of the modern diamond industry. The Antwerp diamond industry plays a key role as one of the U.S.’s largest and most reliable suppliers of polished diamonds. Simultaneously, the U.S. is Antwerp’s most important export market for polished diamonds. In 2013, Antwerp exported no less than 836,110 carats of polished diamonds worth $3,947,543,172 to
the States.
In May 2014, the AWDC decided it was time to reinforce the long-term relationship between Antwerp and the United States by organizing a unique B2B mission to Miami, Los Angeles and Las Vegas. Ten prominent Antwerp diamond companies participated in the exclusive B2B networking events in Miami and Los Angeles, followed by an Antwerp Diamond Pavilion at the JCK fair in Las Vegas in which an additional 13 Antwerp diamond companies took part.

Antwerp Diamond Pavilions

Antwerp Diamond Pavilion at IJS Signature for the fourth time

India represents one of the fastest growing economies worldwide, with impressive growth in 2013 alone. Its gem and jewelry industry is growing even faster, representing 27 billion US dollars.
As Antwerp is India’s number one supplier of rough diamonds – a stunning 60% of Antwerp’s rough diamond exports - IIJS Signature gives the Antwerp diamond companies the opportunity to increase their presence in India and actively increase their scope toward India’s retailers market.
AWDC set up an Antwerp Diamond Pavilion at IIJS Signature for the fourth time. 6 Antwerp diamond companies participated. The Pavilion was ideally located right at the entrance of Hall 2, the show’s dedicated section for international exhibitors.

Antwerp in full force at March show in Hong Kong

From 3 until 7 March the “Hong Kong International Diamond, Gem and Pearl Show” took place, one of the fastest growing and most successful trade shows
of the year. The Antwerp diamond sector was present in full force, with 67 companies in the Antwerp Diamond Pavilion. Over 32,000 professional buyers from across the globe made their way to the Hong Kong show.

New Antwerp Diamond Pavilion in Freiburg

From 1 – 4 April, AWDC organized the first ever Antwerp Diamond Pavilion in Freiburg during the Jewelry & Gem Fair – Europe.
25 Antwerp diamond dealers and diamond labs showcased their goods in the only Antwerp Diamond Pavilion in Europe. The Freiburg show was organized by the renowned UBM Asia and hosted no less than 400 exhibitors from 28 countries.

23 Antwerp diamond companies represented at JCK Las Vegas

For almost 20 years now, in early June, the world diamond industry gathers in Las Vegas for the largest jewelry trade show in the business, at the epicenter of the world’s first and largest jewelry market. As nearly half of the diamonds sold in retail stores
are destined for the US market, JCK is definitely a must-do on the agenda for the Antwerp diamond community.
From 30 May to 2 June, 23 Antwerp diamond companies were represented in
the Antwerp Diamond Pavilion. This year, the JCK show was preceded by a unique AWDC B2B mission with stops in Miami and Los Angeles before heading to Las Vegas. The tour proved successful in facilitating access for Antwerp companies to
numerous US jewelers and retailers, helping to build closer relationships and leading to new business opportunities.

Antwerp Diamond Pavilion continues annual expansion at the HK International Jewellery Show in June

The demand for participation in the Antwerp Diamond Pavilion at the Hong Kong June show continues to increase. From 19 to 22 June, no less than 102
Antwerp diamond companies were represented in the Antwerp Diamond Pavilion, an increase of 16 companies since 2013.
The June Hong Kong Jewellery and Gem Fair is the last important show before the whole diamond industry goes into summer recess, an appointment nobody wants to miss out on. With its track record of excellence, the June Fair attracts thousands of buyers from over 100 countries and regions, who are ready to replenish their inventories.

IIJS Mumbai

The India International Jewellery Show in July/August in Mumbai is considered India’s prime jewelry event of the year, attracting over 30,000 professional buyers. It is the perfect opportunity to connect with India’s booming gems and jewelry industry. As Antwerp is India’s number one supplier of rough diamonds, IIJS offers the Antwerp diamond companies the opportunity to
increase their presence in India and actively
extend their scope toward India’s fast growing retail market.
From 17 to 21 July, 15 Antwerp diamond companies participated in the Antwerp Diamond Pavilion at the India International Jewellery Show.

Antwerp Diamond Pavilion at Hong Kong

September show has never been bigger

The September Hong Kong Jewellery and Gem Fair took place from 15 – 19 September. No less than 99 Antwerp diamond companies were represented in the Antwerp Diamond Pavilion. This fair still is the largest jewelry and gem fair of its kind in Asia and the rest of the world.
The general impressions of the fair were positive. More than 50,000 professional buyers from all over the world came to the Hong Kong September show. With 99 participating companies in the Antwerp Diamond Pavilion, we can say this year’s edition of the pavilion has been a record one in terms of the number of participants. This fair is a very important event on the international jewelry agenda. AWDC continues to receive increasing numbers of participation requests.

2. AWDC in Antwerp

In addition to the various initiatives organized by AWDC worldwide, we are also very active in Antwerp, the heart of the global diamond industry. As Antwerp is the world’s leading diamond trade hub, numerous delegations and high officials came to visit the Antwerp diamond industry. Furthermore, AWDC organized a variety of events in Antwerp to expand trade and support the diamond companies.

2.1 AWDC – at your service

AWDC’s first sustainability report

On 3 July 2014, AWDC launched its first sustainability report.
Promoting a sustainable and transparent diamond industry is one of AWDC’s key strategic priorities. We are of the opinion that a healthy diamond industry entails taking responsibility for itself and its broader impact.
Antwerp’s diamond industry is known for its ‘5th C.’ In addition to the classic 4 Cs, which determine the value of a diamond - carat, color, cut and clarity - our 5th C is the commitment to Compliance, Confidence and CSR. This is the core of our business model and a strong focus in our medium and long-term strategy, not only for the Antwerp diamond industry but also for the global diamond industry. For this reason, AWDC embarked on its first sustainability report to evaluate the accomplishments of 2013 and previous years, and to determine where progress needs to be made.
We believe that the business model of the future must have sustainability at its core. It is our intention to demonstrate that sustainability and growth are not mutually exclusive. So, in the last few years, sustainability has become a priority.
Extensive dialogue with stakeholders ranks high on AWDC’s agenda and played an integral part in producing this report. We took active steps to involve our employees, diamond companies in the sector, NGOs and the broader community in Antwerp. The consulted stakeholders ranked the following issues as the top
five, on which AWDC should focus its activities and report back to affected stakeholders: responsibility and integrity in the diamond supply chain; transparency; compliance; indirect economic impact in Antwerp; indirect economic impact in diamond producing countries. These topics therefore form the basis of our sustainability report. The goal of this report is to illustrate in a transparent manner how we drive sustainability in our business as well as across all tiers in the diamond value chain.

Our external stakeholders expect AWDC’s contribution and leadership. Internally, sustainability and communication surrounding this topic have risen on
AWDC’s agenda.
You can download the AWDC sustainability report here.

AWDC wins Best Belgian Sustainability Report

On December 2 2014, the 16th edition of the award ceremony for Best Belgian Sustainability Report was held. The Award is an initiative of the Belgian Institute of Registered Auditors. It encourages and rewards companies and organizations that, in addition to reporting on their economic and financial data, report on their activities in the framework of sustainable development in a transparent manner. AWDC is the proud winner in the category ‘other organizations’.
The jury found that AWDC’s very first sustainability report was a clear, well- structured report and did not shy away from addressing sensitive issues. Some of the praise AWDC received was as follows:
In the ‘other organizations’ category, the jury considers the AWDC’s report a clear, well-structured and excellent example of a good GRI G4 report. The report succeeds very well in explaining materiality, stakeholder consultation and management of governance and compliance. The jury was also impressed by the fact that AWDC’s report touches sensitive issues in a transparent manner, acknowledging the diamond sector’s weaknesses and including a risk analysis. The jury considers AWDC’s sustainability report an act of courage, and an important signal from AWDC to the diamond sector, sure to have an impact on the industry.
AWDC CEO Ari Epstein was honored to receive the award. This was the AWDC’s first sustainability report, and AWDC meant for it to send a clear message to the industry. Like all other businesses and organizations, AWDC and the Antwerp diamond industry have a major responsibility toward society

AML & Compliance Helpdesk

The AML & Compliance Helpdesk, managed by the AWDC legal department, was launched in 2012. Its purpose is to provide assistance to registered Antwerp diamond companies on various issues such as completing the annual activity report, which is mandatory under the Belgian Anti-Money Laundering legislation. The Helpdesk has an advisory role and operates in close cooperation with the Federal Public Service Economy. In 2014, the Helpdesk received 206 inquiries from Antwerp diamond companies, whereas in 2013 the total amount was 127.
In addition, the Helpdesk organizes AML & Compliance seminars, which offer Antwerp diamond companies an AML best practices guide, tailor-made for the diamond industry, an exclusive preview of the new and improved AML legislation now in force, more information about important new developments and a platform to ask questions and exchange thoughts.
In total, 269 diamond companies participated in one of the seminars. This is an obvious increase in comparison with 2013, when 135 companies participated. The seminar fulfills the requirements of the compulsory training program that Antwerp diamond companies are obliged to follow according to AML legislation. All participants received a certificate from AWDC in cooperation with the Federal Public Service Economy. Furthermore, the AML & Compliance Helpdesk sends out a monthly AML & Compliance Newsletter to inform and update the industry about the new rules and regulations.

AWDC Security Office

AWDC Security Office and the Antwerp Local Police – Diamond Department keep a watchful eye on the diamond area. As with any high-stakes industry, tight and proactive security is of critical importance. The Antwerp diamond industry is no exception to this rule. In 2010, AWDC set up the AWDC Security Office (AWDC SO – formerly known as ADA-Security).
Its mission is to support and facilitate the diamond business, and to protect the diamond community’s personnel, products, reputation, information and assets against all internal, external, deliberate or accidental threats. To this end, it provides awareness briefings on security, tiger kidnapping, cyber and computer crimes and terrorism, among others.
Furthermore, it gives advice and support concerning security and safety in general, police issues and legal questions, private investigations and private detectives, and it delivers crisis communication, victim support and follow-up analyses after an actual incident. It regularly schedules structural meetings with all stakeholders in the district. AWDC SO visits and inspect buildings, implements the mapping of crime in the district and gives training

sessions in security monitoring. In 2014, AWDC SO organized 36 training sessions and briefings for the Antwerp diamond industry. In short, AWDC SO not only aims to protect and serve the industry, but also to increase security awareness in the Antwerp diamond community.
The Integrated Anti-Tiger Kidnapping Program is an important initiative of the AWDC SO, tailor-made for the Antwerp diamond area and set up together with Antwerp local police. Its primary objective is to inform the diamond community on prevention measures and to provide guidelines in the event of tiger kidnapping. Research indicates that prevention measures through adequate organization of home and office security are the most effective. We are fortunate that tiger kidnappings do not happen often, but it is crucial to prevent these types of crimes at all cost and that is exactly why we have set up this Integrated Anti-Tiger Kidnapping Program.
AWDC SO wants to increase awareness in the Antwerp Diamond Community about the recent surge of cyber crime and offer preventive security measures. This briefing is focused on and addressed to CEOs, GMs, CFOs and staff mandated to order or perform financial transactions such as payments, money exchanges
and transfers. There are several physical threats applicable to Antwerp diamond companies: fraud, theft, switching, robbery, burglary, tiger kidnapping … For a couple of months now, AWDC SO has observed another increasing threat: cyber crime. Examples of cyber crime include, but are not limited to: email hacks, caller ID fraud, money exchange fraud, invoice fraud, bank transfer fraud, malware attacks… These briefings are organized on a monthly basis.
AWDC SO also organizes Security Awareness Briefings on a monthly basis. Topics that are being discussed include, amongst others, the services provided by AWDC SO to all involved in the Antwerp diamond district, presentation and visualization of risks, incidents and their impact and recommendation and description of effective security measures.
Furthermore, in its commitment to increase transparency, AWDC set up a reporting desk in 2013, where people can report all forms of crime, suspicious matters and security related issues.
Through a single point of contact, AWDC compiles all the information and passes it through to the local police in Antwerp. On the one hand, AWDC SO wants to create greater awareness and emphasize the importance of reporting any suspicious behavior to the local police. On the other hand, we want to make diamantaires vigilant for any kind of activity that might indicate crime. The reporting desk has had increasing success since its introduction, with 83 reports in 2013 and 257 in 2014.

2.2 Antwerp Diamond Visits

Delegation of Botswana Investment & Trade

Centre visits Antwerp diamond industry

Botswana used to be the most important producer of rough diamonds in terms of value, but was overtaken by Russia in 2014. Aside from being a major diamond producer, the country is also home to De Beers’ Global Sightholder Sales, and is pursuing a beneficiation policy to increase local added value in the diamond industry. The Botswana Investment & Trade Centre delegation stopped in Antwerp on 24 January to visit the diamond industry during their visit to Belgium, which focused on enhancing bilateral trade relations with their home country.

Chinese President Xi Jinping witnesses signing of Cooperation Agreement between AWDC and SDE

On March 31, in the presence of Chinese President Xi Jinping, AWDC and the Shanghai Diamond Exchange (SDE) signed a Cooperation Agreement in Brussels, outlining their cooperation with respect to the development of an exclusive commercial and trade relationship. The signing of such an agreement, in the framework of President Xi Jinping’s first visit to Europe as Head of State, marks the key importance of the diamond trade between Antwerp and China.
In the last decade, the increasing trade and financial flows between the EU and China have considerably heightened their interdependence, a trend also clearly reflected in the diamond trade between the two countries. AWDC has for many years placed a special focus on China, with the goal of increasing cooperation between these two natural partners.
Currently, China and Antwerp enjoy fruitful trade relations, especially in polished diamonds, as reflected in the 2013 trade figures. As a key partner for the Antwerp diamond industry, greater China is second in the ranking of Antwerp’s top trading countries. In 2013, Antwerp exported 1.9 million carats to greater China, valued at $3.7 billion. Imports from greater China amounted to 2 million carats, valued at $3.4 billion.

Sierra Leone President Koroma visits the Antwerp diamond industry

On April 1, the Antwerp diamond industry welcomed Sierra Leone President Ernest Bai Koroma. The visit of the presidential delegation underscores the importance of trade relations between Sierra Leone and Antwerp’s diamond industry. A significant part of Sierra Leone’s diamond production is in fact traded in Antwerp.
AWDC was very honored to welcome President Koroma. Sierra Leone is an important partner for the Antwerp diamond industry. In 2014, Antwerp imported 30% of Sierra Leone’s total diamond production, which translates to 38% of the total value of the country’s production. The average price per carat of a diamond mined in Sierra Leone amounted to $357.50 in 2014, which demonstrates the high quality of the country’s diamonds.
Although Sierra Leone is a rather small diamond producer, its importance should not be underestimated, as the quality of the country’s diamonds is high.

Zimbabwe trade organizations pay visit to Antwerp diamond sector

In the framework of the EU-Africa summit that was held in Brussels, a delegation of various Zimbabwean trade organizations visited the Antwerp diamond sector Wednesday April 2. The delegates had the opportunity to get a unique behind- the-scenes tour of the Diamond Office and the Antwerp Diamond Tender Facility, allowing them to acquire better insight into various aspects of the Antwerp and global diamond industry.

AWDC welcomes delegation of the

International Enterprise Singapore

The AWDC participated in the Royal trade mission to Singapore and Malaysia, during which we organized multiple events, from seminars on diamond banking to B2B-meetings and an Antwerp Diamond Night. During the preparatory process, we welcomed a delegation from International Enterprise Singapore for a tour behind the scenes of the diamond industry on 7 April.

Chinese Ambassador Yang Yanyi visits Antwerp diamond sector

On Wednesday 9 April, Her Excellency Ambassador Yang Yanyi, Head of the Permanent Representation of the People’s Republic of China to the European Union, visited the AWDC. As the visit took place in the context of the International Women’s Day, all of the women affiliated with the Permanent Representation to the EU were invited to participate.
Diamonds are an important product in terms of trade relations between Belgium and China. They constitute 9% of the total exports from Belgium to China. AWDC therefore places a significant focus on strengthening relations with China.

Canadian Ambassador visits

Antwerp diamond sector

On Wednesday 14 May 2014, H.E. Denis Robert, Canadian Ambassador to Belgium, visited the Antwerp diamond sector. The ambassador visited the Diamond Office, HRD Antwerp and the Antwerp Diamond Tender Facility.
Canada is an important trade partner for the Antwerp diamond industry, having produced over 5 million carats of rough diamonds, valued at 970 million US dollars in 2013. Diamonds from the Ekati and Diavik mines are currently being marketed in Antwerp. Canadian miner Stornoway Diamond’s Renard Project is projected to reap a diamond production average of 1.6 carats annually. Stornoway expects commercial production to start by summer 2016. Considering the excellent relationships between Antwerp and the Canadian diamond industry, the Renard Project could signify an important new source of rough diamonds for the Antwerp diamond market.

Antwerp hosts World Diamond Council and KP Chair for renewed ASM MoU

On May 26 the AWDC had the honor to welcome the 2014 Kimberley Process Chair, His Excellency Wei Chuanzhong, Vice- Chair Bernardo Campos and Mr. Edward Asscher, President of the World Diamond Council for the purpose of renewing the Memorandum of Understanding (MoU) on the Kimberley Process Administrative Support Mechanism (ASM).
In the presence of AWDC President Mr. Stéphane Fischler and AWDC CEO Mr. Ari Epstein, Mr. Edward Asscher, World Diamond Council President, and the Chinese KP Chair and Angolan Vice-Chair renewed the MoU which sets out the mutual expectations of the KP Chair and the ASM host organization. The renewal of the MoU reflects the KP Plenary’s and the KP Chair’s continued confidence in the ASM.
In addition, the AWDC reiterated that the debate on a KP reform, initiated and supported by the KP Chair, should be based on KP’s founding principles: inclusiveness, a tripartite structure and bottom-up process.

Mayor of Mbuji-Mayi in the DRC discusses possible cooperation during visit

Rough diamond deposits in the Democratic Republic of Congo (DRC) are mainly situated in the Eastern and Western Kasai Provinces. The city of Mbuji
Mayi could be considered as the diamond- producing center of the DRC. On 4 June, a delegation from Mbuji Mayi, headed by the mayor of the city and including a number of high representatives, visited the AWDC to discuss possible cooperation in the mining industry in the DRC.

Gokhran visit confirms excellent relations between Russia and the Antwerp diamond industry

The Antwerp diamond industry and Russia share a long history of excellent bilateral relations. The country is the largest diamond producer in the world, and sells the majority of its rough diamonds in Antwerp. Gokhran of Russia is a state entity that manages a strategic reserve of precious metals and gems
such as diamonds. The AWDC signed a Memorandum of Understanding with Gokhran of Russia in 2014, in which we committed to foster our bilateral relations. The visit of Gokhran of Russia to the Antwerp diamond industry on 16 June was organized in the framework of this Memorandum.

South African Diamond and Precious Metals

Regulator visits Antwerp diamond industry

The South African Diamond and Precious Metals Regulator (SADPMR) is the Kimberley Process authority in South Africa, and regulates the national and international diamond trade, amongst others via the Diamond Exchange and Export Centre (DEEC). The SADPMR delegation visited the Antwerp diamond industry on 19 June in the margin of their visit to the World Diamond Congress, which was organized in Antwerp.

Namibian Minister of Mines and AWDC

discuss beneficiation during visit

In 27 June, Hon. Isak Katali, Namibian Minister of Mines met with AWDC Management during his visit to Antwerp for the World Diamond Congress. Mr. Katali and AWDC representatives engaged in discussions concerning beneficiation. AWDC and the Antwerp diamond community always strive to maximize returns to the governments and people of diamond producing countries, to provide for their raw materials.

Zimbabwe Minister of Mines visits

Antwerp World Diamond Centre

Following a meeting in Brussels with the Zimbabwean Ambassador to Belgium and in the framework of the World Diamond Congress, organized by the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, Mr. Walter Chidhakwa, Zimbabwean Minister of Mines, visited the Antwerp diamond industry on 27 June 2014.
AWDC had the pleasure of welcoming Mr. Chidhakwa for the first time. Following two successful tenders of Zimbabwean goods in 2013 and earlier this year, the Minister’s visit to AWDC is a testimony to the positive trade relationship between Antwerp and Harare. During Mr. Chidhakwa’s meeting with AWDC Management, the ties between the two parties were reinforced.

Ambassador of India to Belgium H.E. Manjeev

Singh Puri visits Antwerp diamond industry

The importance of the Indian community to the Antwerp diamond industry can hardly be overstated. India is our main market for exports of rough diamonds, and our main supplier of polished diamonds.
On 4 July, AWDC invited H.E. Ambassador Manjeev Singh Puri for a visit to the diamond industry and a meet and greet with representatives of our industry, most of them of Indian descent.

AWDC welcomes multiple delegations from China in 2014

The AWDC received multiple delegations from China in 2014, such as the Shanghai Diamond Trade Administration on 1 July, the Diamond Administration of China on 8 July and the Shanghai Foreign Affairs Office on 5 December. China chaired the Kimberley Process in 2014, and the then chairman, H.E. Wei Chuanzhong, was invited to Antwerp to discuss his plans and ambitions for the Chinese KP Chairmanship.

Lesotho Minister of Mines visit confirms valuable partnership

Rough diamonds from Lesotho are among the world’s most expensive, as their quality is often exceptional. This small diamond- producing country exports its entire production to Antwerp. The visit by the Lesotho Minister of Mines to the diamond industry on 23 September confirmed this valuable partnership between Antwerp and Lesotho.

Minister-President of Flanders Geert

Bourgeois visits Antwerp diamond industry

On Tuesday, October 7, 2014 Minister- president Geert Bourgeois visited the Antwerp diamond industry. The visit was part of a series of visits that the Minister- president paid to the most important economic sectors in Flanders. Minister-President Bourgeois visited the Diamond Office, HRD Antwerp and a
polishing facility. At the end of his visit, Bourgeois underlined the importance of the diamond industry for the Flemish economy. He also expressed his support concerning the Antwerp Diamond Bank wind-down and suggested that the Flemish government is willing to share its expertise in the search for a solution.

The European External Action Service receives behind-the-scenes tour of the diamond industry

The European External Action Service (EEAS) is the foreign affairs body of the European institutions. On 7 October 2014, a delegation of EEAS desk officers responsible for relations between the European Union and the countries of Southern Africa, were given a tour behind the scenes of the diamond industry. The AWDC discussed various issues with the delegation, such as the Angolan Kimberley Process Chairmanship of 2015 and the diamond-trading relations between the EU and Zimbabwe.

AWDC invites newly appointed British

Ambassador to Belgium

The departure of De Beers from London and its relocation in Gaborone in 2013 drastically diminished the role of the United Kingdom in the global diamond industry. But this neighboring country remains an important stakeholder for the AWDC. We invited the newly appointed Ambassador H.E. Alison Rose on 3
December for a demonstration of the different activities taking place in the Antwerp diamond industry.

2.3 Local events & initiatives

Antwerp Diamond Trade Fair

From January 26 to 28 2014, Antwerp hosted the fifth edition of the Antwerp Diamond Trade Fair. Buyers from all over the world came to the trading halls of the Antwerp Diamond Bourse, The Diamond Club of Antwerp and the Antwerp Diamond Kring. Close to 90 Antwerp diamond companies were represented at
the ADTF.
At the conclusion of the first day of the fifth ADTF, AWDC organized an Antwerp Diamond Night in the Antwerp Stadschouwburg. Visitors, exhibitors and guests were invited to network during a cocktail reception that included a short entertainment program and a buffet diner.

Antwerp welcomes diamond industry at 36th World Diamond Congress

From June 16 to 18, Antwerp hosted the 36th World Diamond Congress, spearheaded by the AWDC and organized by the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA). Over 200 participants from all over the world, representing the entire industry, discussed key issues and challenges, setting the course for the future of the global diamond industry.
The 36th World Diamond Congress officially opened on Monday June 17 with speeches from industry leaders, including WFDB President Ernest Blom, IDMA President Maxim Shkadov, and AWDC’s President Stéphane Fischler.
Over the course of the four-day event, key stakeholders and industry experts discussed various topics, such as the issue of undisclosed synthetics and the need for uniformity in diamond grading lab reports, as well as the challenge of maintaining and reinforcing the industry’s financing by creating even greater transparency and stakeholder awareness and confidence.
During the Congress, Canada and South Korea were formally approved as members of the WFDB, which now comprises 30 diamond bourses worldwide. In addition, the Gem and Jewellery Export Promotion Council India (GJECPC) was admitted as an Associate Member. In a joint statement, the WFDB, IDMA and CIBJO announced the formation of the so-called ‘President’s Forum’, which is a joint consultative committee with its members being the presidents of each organization. Together they will discuss and formulate coordinated strategies and policies for the industry on important issues of common interest.

AWDC welcomes African Ambassadors during African diamond luncheons

In 2014, AWDC organized two African diamond luncheons on 25 June and 12 September.
The discussions during the luncheons touched upon several critical issues that affect the global diamond governance. AWDC and the Antwerp diamond industry are committed to remaining a stable, reliable and supporting partner for the African diamond producing countries. After two successful editions of the African Diamond Luncheon, AWDC is starting to gain thorough understanding of the main concerns and interests of the African diamond producing countries.

Diplomats from across the globe tour

Antwerp’s diamond sector

In the context of the City of Antwerp Diplomatic Day, on Wednesday 17 September, 150 diplomats descended on Antwerp, paying a visit to the AWDC. The Diamond Office, the beating heart of AWDC, attracted a great deal of interest.
During their visit, the diplomats also learned how diamonds are formed, the production process of a diamond from mine to jewel, and the role of Antwerp in this whole chain. The control procedures conducted in the Diamond Office, inspecting each consignment of imported or exported diamonds, received a great
deal of interest. These strict controls ensure a fair and transparent diamond trade and distinguish Antwerp from other diamond centers such as Dubai or Mumbai.

WDC annual general meeting in Antwerp:

looking to the future

From 28 to 30 October, members of the World Diamond Council assembled in Antwerp for the 2014 Annual General Meeting. The discussions focused on issues associated with the Kimberley Process, 14 years after its establishment, and the role of the WDC in relation to the risks facing the KP.
Upon his election as new President of the WDC, Edward Asscher stressed the need to reform the organization into a transparent, professional and truly representative body for the industry. During the Annual General Meeting, WDC members took the lead in discussing diamond industry issues currently such as market dynamics, generic marketing and financing, among others.

Antwerp Diamond Tender Facility

The Antwerp Diamond Tender Facility, which is operational since October 2012, has once again proven to be a success in 2014. Throughout the year, productions from Jagersfontein and Rooipoort in South Africa were sold via tender, as well as Zimbabwean productions from Diamond Mining Company, Jinan Investments, Anjin Investments, Marange Resources, DTZ and Mbada Diamonds.

Epilogue

Board of Directors

Mr. Freddy Inzlicht (Bourses) President Vice President

Mr. Stéphane Fischler (Industry)

Mr. Santosh Kumar Agarwal (Kedia) (Trade) Vice President

Mr. Kaushik Mehta (Trade)

Mr. Shailesh Javeri (Trade)

Mr. Thierry Polakiewicz (Bourses)

Mr. Samir Mehta (Trade)

Mr. Jacques Korn (Bourses)

Mr. Koen Vandenbempt (Independent)

Mr. Ramesh Patel (Trade)

Mr. Jacques Weisz (Trade)

Management Team

Mr. Ari Epstein
Chief Executive Officer

Mr. Michel Janssens
Head of Finance

Mrs. Manuella Merckx
Head of Diamond Office

Mr. Mark Van Bockstael
Head of Business Intelligence

Mrs. Trisevgeni Stavropoulos
Head of HR, Legal & Compliance

Mrs. Nele Bouchier
Head of PR & Communications

Mrs. Karla Basselier
Head of Public Affairs

Mr. Christiaan Van Dooninck
Head of Business Development

Mr. Stephan Van Hauwe
Head of Security & Operations