Work hard and you will find success

Eduard Utkin, Director General of the “Jewellers’ Guild of Russia” Association, expert of the RF Chamber of Commerce and Industry’s Committee on Precious Metals and Precious Stones, told R&P about implementing the SIIS PMPS (State Integrated Information...


GOLDNET.MARKET - “We want and are working to provide business with the opportunity to develop a lot of activity areas”

Today, almost all jewellery companies have their own wholesale websites, online stores, and social media pages. But a year ago, GOLDNET.MARKET, the first jewellery wholesale marketplace appeared in Russia, a new effective tool for the jewellery market...

20 september 2021

Platinum’s rare nature gives it additional value and appeal

Huw Daniel is the CEO of Platinum Guild International, overseeing market development activities in China, Japan, India and the USA, on behalf of the platinum producers of South Africa. Before taking up this role in 2015, Huw ran PGI USA for 12 years...

13 september 2021

Marco Carniello: We want to continue to be the engine boosting the jewellery industry

Italian Exhibition Group (IEG) is a leader in Italy in the organisation of trade fairs and one of the main operators in the trade fair and conference sector at European level, with structures in Rimini and Vicenza, as well as further sites in...

06 september 2021

There is a significant need for smart and technological financial solutions in the diamond industry

MDPS, the Israeli start-up Fintech company from the Mazalit Group is gearing up to enter the diamond industry soon. Zeev Maimon, the CEO of MDPS is also the Founder / CEO of MAZALIT, a B2B payment platform designed and dedicated to the global diamond...

30 august 2021

Panama Diamond “Channel”

14 july 2014

The increasing intensity of conflicts in the Middle East, Africa and Ukraine makes it particularly interesting to cast a look at the latest significant innovation in the logistics of the diamond market, which is the Panama Diamond Exchange (PDE). This project is progressing quite well and quite possibly may become one of the main beneficiaries in the difficult situation in which the market may be put through the efforts of politicians.

The need to create a large diamond hub in Panama is tied by the initiators of this idea to a significant increase in regional jewelry trade, the burgeoning middle class and higher purchasing power of the population. However, these are not too convincing reasons - the market of Latin and South America, even taking into account the most favorable conditions for its development, does not stand any comparison with the traditional markets catered by the diamond exchanges of Antwerp, Ramat Gan, Dubai and Shanghai.

There is another reason behind, which bears more weight in this regard. Panama is an offshore exceptional by its characteristics. The country is not a member of the FATF (Financial Action Task Force on Money Laundering), it is not bound by treaties on mutual legal assistance (MLATs) and it does not recognize court rulings of other countries. Confidential corporate information and bank secrecy are reliably protected by the local law. Tax legislation is very liberal: PDE has the status of a free trade zone and all transactions executed on this exchange are exempt fr om any customs duties and taxes.

Using the Panamanian offshore as a “washing machine” for money having criminal origin is a long-time headache of FATF, so the idea to turn Panama into a major diamond hub ran into skeptical judgments even at the stage of admitting PDE to the World Federation of Diamond Bourses. Such views are still expressed - the FATF report on “Money laundering and terrorist financing through trade in diamonds” published in October 2013 often mentions Panama in this context. But apparently, reputational damage fr om operating PDE in the offshore, which is legendary in certain circles, does not embarrass the organizers and masterminds of the project.

The chairman of PDE is Eli Izhakoff and the management of the exchange also includes Ernest Blom, President of the World Federation of Diamond Bourses; Gaetano Cavalieri, President of CIBJO; Avi Paz, former President of WDC; and Erez Akerman, President of PDE. All these persons have an impeccable reputation in the industry and know the peculiarities of the diamond market in their smallest details. And they cannot but be aware that the creation of a significant “diamond channel” in Panama will inevitably reduce the corresponding flow of diamonds at the existing hubs. Wh ere will this happen in the first place?

Here we come to the subject, which is rarely discussed in the mass media for obvious reasons. The rapid development of the Dubai Diamond Exchange resulted in a significant number of attempts by Arab organizations radicalized in varying degrees to penetrate the diamond business, as well as in exclusion of Israeli money from some part of this business. This, obviously, could not but heighten - in a significant way - the activity of Israel’s preventive services. Diamantaires, whose interests have been for a long time and successfully represented in the industry by the above mentioned senior officers of PDE, started to feel uneasiness being dragged into an unpleasant process of this confrontation, which also has a clear trend towards aggravation. Reputational damage from operations of the diamond hub in an area known for circulating huge amounts of hash and cocaine is still less than that of the Arab-Israeli “diamond” confrontation. Therefore, it is easy to assume that a growing diamond flow in Panama will be harmoniously corresponding to a decrease of such a flow in Dubai.

Possible diamond industry sanctions against Russia to be considered the day after tomorrow – on July 16 - at an extraordinary EC summit may be an added bonus for Panama. If these sanctions will affect diamond trade, then some part of the Antwerp diamond flow may be taken up by PDE. Which is not at all bad for business in the opinion of many professional market players – keeping away from politics, from financial and other intelligence services, from bureaucracy, as well as from prying eyes ...

Sergey Goryainov, Rough&Polished