The Russian invasion of Ukraine could also have an impact on Belgian companies, especially in the diamond and agricultural sectors. For the Antwerp diamond trade, Russia is important. “The sanctions should hurt Russia, but there is a chance that we will mostly hit ourselves with them.

Russia is an important partner for the Antwerp diamond trade. Belgium imported over 1 billion euros worth of gems from Russia in 2020. The Russian producer Alrosa, the largest in the world, markets its production of rough diamonds largely through Antwerp.

Chief of European diplomacy Josep Borrell even explicitly mentioned the Antwerp diamond hub after the announcement of the European sanctions against Russia. “No more shopping in Milan, partying in Saint-Tropez or buying diamonds in Antwerp,” he made the sanctions concrete in a since-deleted tweet.

Sanctions can have a significant impact on the diamond business,” confirms Tom Neys, the spokesperson for the Antwerp diamond association AWDC. “It’s a tool that should hurt Russia, but there’s a chance that we’ll mostly hit ourselves with it. The Russians could just as well trade their diamond production through countries outside the European Union.

The diamond trade could suffer especially from travel restrictions or financial penalties. “The free movement of people is important to us. Diamond trade is a physical business. Nobody buys a diamond without having seen it,” says Neys.

Belgian pears

When Russia invaded Crimea in 2014, it was mainly the pear farmers of Limburg who suffered the consequences. In response to European sanctions, their pears were no longer allowed to enter Russia. “Since 2014, the Russian sales market has been lost,” says Vanessa Saenen, spokeswoman for the Farmers’ Union. “In that respect, we have nothing left to lose.

The Farmers’ Union especially fears the consequences on the price of energy and grain. For greenhouse horticulture and ornamental plant cultivation, the energy price is important. And the price of grain affects the price of animal feed. “For us, there are only disadvantages,” Saenen concludes. She particularly fears a blockade of Ukrainian ports on the Black Sea, such as Odessa. Then the price of grain would skyrocket, as Ukraine is a major grain producer.

For the whole of international trade, Russia and Ukraine are of limited importance. Russia accounts for just over 1 percent of Flemish exports (mainly chemicals and machinery). Flanders imports more from Russia than it exports to that country. More than half of the imports concern ‘mineral products’ such as oil. Ukraine accounts for 0.17 percent of Flemish exports.

AB Inbev, Solvay and Bekaert

Dozens of Belgian companies are active in either country. AB Inbev is the most important. Through a joint venture with the Turkish brewer Efes, AB Inbev has eleven breweries and three malt houses in Russia, and three breweries in Ukraine. None of these are located in the disputed “people’s republics” of Luhansk and Donetsk.

Solvay also operates in Russia through its RusVinyl joint venture. “The plant makes plastic products for the Russian market,” says spokeswoman Nathalie Van Ypersele. The risks of sanctions are limited. As an export destination, Russia accounts for less than 1 percent of Solvay’s sales. At Bekaert, which has a steel cord plant in Russia, a similar story rings true. “We source locally, produce locally and sell locally,” says spokeswoman Katelijn Bohez. So there will be no direct impact from sanctions.

Belgian companies are also active in Ukraine, such as Reynaers Aluminium, Materialise, IT company Quadrox and Puratos. The latter company, a producer of bakery ingredients, has a factory near the port city of Odessa. A risk, the spokesman acknowledges, because the port could become a strategic target if the war escalates. That’s why the company is considering moving its stockpiles to the west of the country.