Brexit Could Halt UK Rough Trade

RAPAPORT... The UK will temporarily be unable to import and export roughdiamonds if the nation leaves the European Union without an exit deal, thegovernment has warned. The UK is currently a member of the Kimberley Process (KP) byvirtue of its being in the EU, enabling it to trade internationally in roughdiamonds. However, once so-called Brexit goes into effect on March 29, it will need to join the KP in its own right. Although the government isnegotiating an EU departure deal that would keep it in all international agreements,including the KP, during an interim period, a "no-deal" Brexit couldstill occur. "In this very unlikely case, you would not be able to tradeinternationally in rough diamonds until we had securedour KP participation," Deirdre Brown, head of the UK Foreign &Commonwealth Office's multilateral policy unit, wrote in a letter to tradersearlier this month. "To prepare for this scenario, you should consider whetheryou wish to make arrangements to have any rough diamonds on consignment or loanto countries in the KP (including the EU) returned to you before theUK has left the EU to avoid delays until we secure independent participation,"she continued. The UK government's plan is to reach a deal with the EU thatwould ensure a transition period until the end of 2020, though both sides have consideredan extension. After that, the UK would have to move to independent membershipof the KP. "A scenario in which the UK leaves the EU withoutagreement...remains unlikely given the mutual interests of the UK and the EU insecuring a negotiated outcome," Brown added. The UK's rough imports are minimal since De Beers moved itssightholder sales from London to Gaborone, Botswana, in 2013. However, some minersstill send goods initially to London before shipping them to Belgium, Bloombergcited the Antwerp World Diamond Centre (AWDC) as saying. "These goods are then transported through the EU commonmarket to Antwerp to be sorted and traded here," the Friday report quoted theAWDC as saying. "It is AWDC's goal to ensure that these trade flows continue topass through Antwerp, even after Brexit."Image: Rough diamonds.