Antwerp, April 12th 2007
Dear Member,
I have great pleasure in informing you that BVGD’s new Board of Directors is acting decisively to defend the interest of the polished diamond traders of Antwerp.
At the General Assembly held on March 20th, the Board of Directors voted overwhelmingly to continue the struggle for a free and open diamond market by pursuing the issue of SOC. Consequently, the BVGD has filed on April 6th an appeal with the European Court of First Instance in Luxembourg against the decision by the European Commission who, after having introduced minor changes, decided not to act upon our complaint concerning the abusive and anticompetitive SOC program of De Beers.
With the expert advice from competition lawyers in Brussels, we are confident that in a Court of Justice, our case will be successful and justice will prevail.
It is our firm opinion that the Commission has not been objective in reviewing our objections to the SOC. Moreover, at various stages our rights were not respected and, more seriously, the Commission disregarded the mountain of evidence they have received from the many market players and stakeholders.
A free, fair, open and competitive market in diamond trading is essential for the future health of the diamond as well as the jewellery industry. We believe that rejecting the premise of SOC is vital, not only for the small, medium and large independent economic operators, but also for the sightholders.
Together, we all create and add value to the diamond process, from mine to market in the most efficient way by functioning in a free and vibrant market.
However, this is not the sole challenge that this Board had decided to tackle.
Recently, the Antwerp diamond trade has witnessed disturbing investigative methods that have rattled the functioning of the market. While the BVGD supports the strict adherence of the law and condemns those that infringe Belgian laws, we do believe that a fundamental problem has surfaced that puts in jeopardy the presumption of innocence, a fundamental precept of our society. Further, the excessive penalties or provisions asked to cover future and hypothetical convictions put the very functioning of the companies targeted – and by domino effect, their suppliers and customers – in jeopardy, thereby endangering the whole Antwerp diamond industry.
The BVGD together with other organizations is intent on tackling this problem that concern not only diamond companies but other sectors of the economy as well.
That is not all. Following the interest of the Prime Minister last year, it was clearly established that a few reforms were needed in order for Antwerp to function effectively.
Two of three main issues are now resolved. The HRD has been restructured, (it is important to note here that the BVGD has abstained at the final vote because, while recognizing the positive changes, the final version did not conform the original draft and left some important issues unanswered) and the reevaluation of the diamond inventories took place last year. As yet the third pillar of the construction, which is the free port zone at the Brussels-Zaventem airport, is still not in place. It cannot be stressed enough that the establishment of a free port zone is essential to insure Antwerp’s diamond trade very survival in this changing world.
Another issue that we will be pursuing is the issue of transfer pricing or the free repatriation (up to a certain level) of foreign profits made by a subsidiary abroad.
We will inform you more on these issues at a later date.
As a personal note, I wish to extend a word of welcome to the new CEO of the Antwerp World Diamond Center Foundation, Mr Freddy Hannard. He is an excellent manager with great social and communication skills. His open and engaging personality is an asset for our sector. The challenges ahead are immense. The BVGD is looking forward to collaborate constructively and positively with the AWDC in order to implement the needed measures for Antwerp.
Finally, I would like to thank all our members for their continued support. As of now, the new Board has decided to update you regularly. We hope that you will be satisfied with our actions and we encourage you to invite your trader friends, suppliers or customers to join the BVGD so that, together, we can act with more efficiency and a stronger voice on the issues that matter most to us all.
Sincerely yours,
Andre Gumuchdjian
President
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