London Eases Diamond Traders' Concerns Over a Hard Brexit

Rough Market
14/01/2020 09:35

Diamond traders established in the United Kingdom should not be too greatly affected by the latest, if not last, round of negotiations ahead of the country's exit from the European Union (EU). The UK has managed to secure the status of participating member of the Kimberley Process (KP) diamond certification scheme. The UK had already held the status as a member of the European Union.

Buyers and sellers of diamonds in the country were at risk of having their operations blocked in the event of a no deal Brexit as they would no longer be able to use the EU's compliance certificates for the time it took for the UK to apply and be approved as a member of the KP.

The UK's Foreign & Commonwealth Office has clarified the two options: 

  • If the UK leaves the EU with a deal: We have agreed with the EU that they will treat the UK as a Member State for the purpose of the KP until the end of the implementation period. This means you will be able to trade in rough diamonds in exactly the same way as you do now. After the implementation period ends, the UK will remain in the KP as an independent participant
  • If the UK leaves the EU without a deal: If there is no deal, our independent participation in the scheme will begin after we formally exit the EU. The new UK KP certificate will replace the current EU one.

The office further notes: When the UK becomes an independent participant in the KP, all rough diamond exports from the UK to the EU will require UK KP certification. Rough diamond exports from the EU to the UK will also need an EU issued KP certificate.

As recently as February 2019, the UK Parliament sent out notice that in the event of a Brexit, their withdrawal agreement provided that the UK would be treated as a KP member state during the implementation periodare, yet they also noted that in the event the UK was unable to enter an implementation period, their participation through the EU would end. In which case, UK trade would be frozen until their application for participation was approved by the other participants in the Kimberley Process.