Dubai set to steal glitter off Antwerp

Belgiums tough federal legislation regarding money laundering and checks on the use of diamond money to finance ugly conflicts are leading manufacturers to turn their eyes to the tax-free haven of Dubais freezones. According to a founding member of the worlds leading diamond manufacturer, it is in danger of losing its crown to Dubai. The emirate boasts an excellent geographical location, central to the booming diamond markets of China, Russia and the Middle East, while its wealthy population, huge influx of tourists and relatively crime-free streets make for high domestic sales. The GCC is now the third largest market in the world for diamond jewellery.

"The diamond industry moved to Antwerp in the first place because fewer questions were asked there and it was easier for the diamond workers to do business," he said. "Now more and more questions are being asked in Antwerp about sales and margins and where money is coming from, so people are getting fed up and saying lets move to Dubai."
But he added: "Dubai is still small compared to centres like Antwerp and it will take time for any major or significant change." Others were slightly more bullish. Jonathan Chippindale, marketing director of Gulf Markets for DTC, the sales and marketing arm of the De Beers Group, said: "All the major companies are looking at Dubai. Fiscal advantage "Saying that Antwerp is finished would be extremely premature, but the challenge is coming from Dubai. It is a major regional player now and it can be the major global player in the future."

Chippindale said any view that Dubai is unregulated is "way off", but claimed it has "a tremendous fiscal advantage" in terms of its tax-free status. Federal legislation faced by the Antwerp diamond industry is considered to go beyond action taken by other countries. The HRD, an organisation representing Antwerps diamond sector, recently met with Belgium Prime Minister Guy Verhofstadt to discuss a report outlining issues weakening the competitive position of the countrys diamond traders. But according to Chantal Abboud, the HRDs representative in the Middle East, their fears were exaggerated and Antwerps position is likely to remain intact.

"Im not convinced that there will be any shift away from Antwerp," she said. "I have not seen even the smallest trader consider completely closing down their Antwerp offices and move to Dubai." Abboud admitted Dubais diamond sector is growing, but said the two sectors will work in co-operation rather than against each other. Dubai is also considered to have an edge over Antwerp in terms of safety of moving goods. The Belgian city has been rocked by a series of huge diamond heists.