Image: courtesy of Michael Freilich, elected member of the Belgian Chamber of Representatives

Antwerp diamond merchant is fed up with being disadvantaged. Diamantairs should be able to open a current account with a Belgian bank since December. Taking out a loan is not yet possible. For that, more time is needed.

It is madness that diamond traders cannot take out a loan. I will make sure that it will be possible“, says Federal Minister of Economics Pierre-Yves Dermagne (PS), who visited the Antwerp diamond district on Thursday.

Tourists from all over the world flock to Antwerp to buy diamonds. But in their own country, diamond traders are less popular. Even to the point of absurdity: banks do not want to give diamantairs a current account or a loan. In the banking world it is said that the money of diamantairs could well come from money laundering. And if that is discovered, the bank can be declared guilty and risk very high fines.

Rob van Beurden (63) has been a diamond trader for forty years. “I went to the bank on Wednesday to apply for a mortgage for a house“, he says. “The bank clerk was very enthusiastic, because my wife and I only want to borrow half of the amount required for the house. But then he asked me what my profession was. ‘Self-employed in the jewellery sector’, I replied. That did it. I can already inform you right now that there will be a negative advice from Brussels,” said the bank clerk. “And that was just because I work in the diamond industry!”

It is not the first time Rob has experienced this. “A while ago, I also wanted to take out a loan for a car, but that was not possible,” he says. “So I had to take out the loan from the car dealer himself, but that is done through a foreign bank, and that loan is 1% more expensive. But then again, I had no choice.

Open a current account? Denied thirteen times

Rob does not only have a problem taking out loans. “Obtaining a current account for my two companies is an agony,” says Rob. “I have written to thirteen Belgian banks, and never got a positive answer.” So how can he do business? “I use a payment platform, on which deposits can be made,” says Rob. “But I can’t withdraw money from it and I can’t pay in shops with it. Moreover, there is a sword of Damocles hanging over my head. I used to make payments for my business through another payment platform. When that platform was taken over by a Spanish bank, the bank threw all the diamond merchants out. That could happen again now.

Rob’s personal accounts, which are therefore separate from his companies, are also blocked. “It comes down to the fact that I have to live mainly on savings that are in a Dutch account,” says Rob. “It’s unbelievable. I have been paying my taxes honestly for decades and have never caused any trouble. And yet I am considered untrustworthy by all Belgian banks.

Kris Peeters’ empty promise

What Rob is experiencing has been typical for the entire diamond industry for years. In the summer of 2018, then Minister of Economy Kris Peeters (CD&V), who was also heading the party list in the Antwerp municipal elections at the time, proclaimed to an audience of diamond traders that there was a preliminary agreement with the banks to establish a basic service, and that the agony of many diamond traders would therefore soon come to an end. We are now four years later, and nothing has changed.

In 2020, however, the Parliament did approve the ‘basic banking service‘. This means that a bank has to give a valid reason for refusing a diamond dealer. It has to communicate this reason to the Federale Overheidsdienst Economie. If a diamond dealer is denied three times, the government can oblige a bank to give the diamond dealer a current account.

Michael Freilich: “lenders are unfairly penalizing the whole diamond sector

Michael Freilich, a Belgian lawmaker who represents Antwerp, says lenders are unfairly penalizing the whole diamond sector. He’s pushing for a “basic banking” law to take effect, in which a government body can step in and appoint a bank if a company has already been rejected three times.

The bank doesn’t have to take the premise that everyone who is a trader in diamonds is a thief or a thug,” he said. “Every industry will have a certain percentage of fraudsters, and the diamond industry is no different. But it’s also no worse than other industries.

Freilich, from the opposition New Flemish Alliance party, said banks are using rules against tipping off clients on concerns over potential illegal activity to close accounts without explanation — and the problem is now extending to other industries like legal prostitution and gaming.

The problem is that if organizations don’t receive bank accounts, they’ll start using other ways of transferring money, whether it’s cash or obscure moneylenders or obscure online crypto service payments, which will be completely devoid of any government control,” he said.

Dermagne promises a solution

But the law is still not implemented. There is no Royal Decree yet. “There has been a delay because we still had to take into account comments from the Raad van State, for example on the exchange of personal data,” says Minister Dermagne. “By December this year, everything will certainly be in order and diamond dealers and entrepreneurs in other sectors who are affected will certainly be able to open a current account with a bank.

With the basic banking service, diamond dealers will finally be able to open an account, but they will still not be able to take out loans. “That is madness,” says Minister Dermagne. “A diamond merchant told me that he could not take out a loan to buy a new laser cutter. That is incredible. I am going to make sure during my ministry that diamond traders will be able to take out loans.