WFDB's 2017 Presidents Meeting Reaches Decisions on a Range of Issues
The WFDB will be creating a financial taskforce to follow up on the Finance Seminar held during the 2017 Presidents Meeting, President Ernie Blom told a press conference at the end of the event on Wednesday, February 8, at the Bharat Diamond Bourse (BDB) following the four-day meeting. Blom said that the comprehensive discussion on financing for the diamond industry, along with the issue of generic diamond marketing and other key topics, had been extensively debated at the Presidents Meeting.
"We had a set of very frank and productive discussions which covered a great deal of ground," Blom told Indian and foreign media representatives. "The cornerstone of this Presidents Meeting was the Finance Seminar. We are determined to show the banks that the idea of the diamond industry as a high-risk sector is a misperception, and the seminar was aimed at correcting that.
"I believe that we are one of the best regulated industries in the world. We are determined to be in complete compliance with anti-money laundering regulations, and are promoting the Know Your Customer concept so that industry members and the banks completely understand what is required from each side."
BDB President Anoop Mehta said, "We spent many months planning the Finance Seminar, and the large turnout showed that it paid off and was much appreciated by WFDB Presidents and representatives of the whole diamond pipeline. We continue to help our members become up to date with the regulations that are required. We do not allow cash transactions, and the BDB has appointed chartered accountants to provide free advice to all our members to help them become more organised and in line with banking regulations. The key word is transparency and we are doing everything to comply."
Blom earlier told the Presidents Meeting on Tuesday that the organisation will work in close cooperation with the Diamond Producers Association (DPA) in order to help boost its generic diamond marketing efforts. Mentioning reports that the DPA was looking to boost its annual budget from the current $6 million, he told the international gathering that the increase in the DPA's budget will allow it to invest in more sophisticated and long-term programmes.
"Advertising today is a different world to the one most of us here grew up with," he commented. "No longer is it simply a case of producing a TV, radio, newspaper or magazine advertisement. Markets are incredibly fragmented, with people getting their information from a wide range of sources, especially the Millennials. That means researching the market and allocating resources in a way that enables you to reach your target audience in the most efficient way possible. The WFDB-supported World Diamond Mark (WDM) initiative will work with the DPA because we recognize that generic marketing is critical for our business. We wish the DPA great success in its efforts and pledge to work together for the good of the entire industry."
Blom laid out the challenges facing the global diamond business, but urged colleagues to remain positive in order to deal with them. "Although the issues of financing, mixing of undisclosed synthetic stones and others are difficult, we must be determined in dealing with them." There are many bright spots from which the trade can draw great confidence, he said, including the tax agreements in Belgium and Israel last year and the Gem and Jewellery Export Promotion Council's (GJEPC) generic diamond promotion campaigns in India with De Beers. In addition, the GJEPC has become a full WFDB member and the Federation is working on bringing in more members, Blom told the meeting. Furthermore, the WFDB is celebrating its 70th anniversary this year, with events to be held to celebrate it, as well as a special commemorative book planned for publication later this year.
Welcoming the WFDB Presidents to India, Bharat Diamond Bourse President Anoop Mehta spoke about synthetic diamonds and the widespread efforts the Indian diamond trade has taken in providing detection equipment and seminars on the issue for traders. GJEPC Chairman Praveenshankar Pandya talked about the challenges facing the diamond industry. "Unless the midstream is strong the rest of the industry cannot be strong," he commented. Meanwhile, Ashish Mehta, the convenor of the Natural Diamond Monitoring Committee established by the Indian trade to monitor the scope of synthetic diamond trading, especially undisclosed mixing, spoke about the work of the GJEPC in this regard across India.
DPA CEO Jean-Marc Lieberherr addressed the meeting, providing an update on the work of the body. The DPA will increase investment in the United States, and plans to enter the Indian market in September 2017 and China in January 2018. He revealed a DPA initiative to combat undisclosed synthetic diamonds by establishing an independent diamond screening equipment testing lab to test the range of detection machines available. "The project will be led by the DPA, but will involve key industry organizations, including the WFDB and GJEPC, and main equipment manufacturers so that the solution delivered meets the needs of the industry and satisfies the manufacturers' expectations of independence and objectivity," Lieberherr explained.
The Presidents Meeting also heard about the success of the Young Diamantaires programme. Following its launch just nine months before at the World Diamond Congress in Dubai, it has quickly gathered pace with a meeting held at the September edition of the Hong Kong Jewellery and Gems Show attracting considerably more participants than forecast, Promotion Committee Chairman Rami Baron told the meeting.
Commenting on the success of the initiative, Ernie Blom said it was the type of venture that the WFDB aimed to encourage since it brings together the younger generation of diamantaires who are the future of the industry.
Meanwhile, in his report to the WFDB President, former WFDB Treasurer-General Dieter Hahn emphasized that only the term "diamonds" should be used and not "natural diamonds", when referring to the natural product.
The meeting also heard a report from World Diamond Council President Andrey Polyakov on the work of the organisation.
Ending the meeting, the WFDB Presidents agreed a proposal to engage with the International Grown Diamond Association, with Ernie Blom saying he will seek to create a dialogue with the organisation.
A special Finance Seminar on Monday heard about the financing challenges facing the global trade and possible solutions, including alternative forms of credit. Addressing the seminar, WFDB President Ernie Blom said the meeting aimed to lay out the reasons that the diamond trade finds it increasingly difficult to secure credit and possible solutions that had not been discussed by diamantaires in the past.
Blom spoke about the withdrawal of some banks from the diamond industry in recent years and the difficulty that diamond companies face in securing credit due to some financial institutions believing that it is a high-risk sector. It was against this background that the diamond financing seminar and roundtable discussion had been organised, he commented.
"We simply cannot afford any longer for the current situation to continue. Our members want action and we are committed as their representatives to work to provide answers to their demands. Our industry depends on it. This seminar will investigate the reasons for the lack of financing available. It will search for the answers as to why current solutions have not been fully successful.
"We would like to find out which additional financing institutions are available to us. And, related to that, alternative financing techniques and how these could bring extra liquidity to the diamond trade which is so badly needed. This means bringing new financing organisations into the dialogue which have not been involved with diamond financing in the past. Beyond this, we would like to establish a regular and ongoing dialogue with banks and other credit providers to develop financial solutions for the diamond industry."
He added that a programme to take the issue forward following the meeting was needed, including finance seminars in Antwerp, Tel Aviv and New York, online information and courses to reach out to all members of individual diamond bourses and the development of financing and risk management tools to help the diamantaires to improve their own risk profile and access to financing. Blom said that the diamond industry was working to ensure that it was in full compliance with regulatory requirements, and that he was optimistic that diamantaires would realise the importance of doing so and move ahead to bring this about.
Bharat Diamond Bourse President Anoop Mehta said that the diamond industry is one of the safest in the world. "The small and medium-size firms, which have been hit by demonetisation, may not be up to date with the measures needed, but we are holding seminars for them to provide the information needed by the banks to ensure they will be in line with requirements."
GJEPC Chairman Praveenshankar Pandya said the diamond industry has to commit to new levels of transparency and to be more forthcoming. "The banks have been supportive, but they must show us the next level needed because the industry has grown in India and we would like to create a committee with the banks to enable a dialogue with them to allow them to have full confidence in the industry. We also believe there should be a uniform rate of interest for diamond firms because now there is a range of 6-7%, and there needs to be a level playing field."
Among the other speakers were former Diamond Trading Company CEO Varda Shine and ABN Amro's Head of Diamond & Jewellery Clients, Erik Jens, who spoke about the nature of the financing challenges facing the diamond trade.
WFDB Vice President Yoram Dvash told the gathering that the 2018 World Diamond Congress will be hosted by the Israeli diamond trade in Tel Aviv in May or June next year.