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Belgium Parliament Backs New Banking Law

October 2, 2022  |  Joshua Freedman
Polished diamonds. (AWDC)

Belgium’s parliament has voted in favor of a new banking law, paving the way for easier access to financial services among Antwerp’s diamond dealers.

The Basic Banking Law, which must still pass further obstacles, guarantees fundamental banking services to all Belgian companies. Businesses that suffer three refusals from a bank may file a request to a new Basic Banking Services Chamber, which will carry out due diligence and appoint a bank that must provide an account and facilitate transfers in euros and dollars.

The parliament initially approved the law in 2020. At that time, the Antwerp World Diamond Centre (AWDC) expected the changes to go into effect soon afterward, but the process hit hurdles and has still not received final consent. The September 22 vote means the country’s top administrative court will review the law in the coming months, after which the royal decree can be published, the AWDC noted.

“It’s now expected that somewhere at the end of the year we can see implementation of the law,” Tom Neys, the AWDC’s head of media relations, told Rapaport News last week.

The new rules tackle one of the Antwerp trade’s biggest challenges. Many diamond companies have had simple banking services refused because of their involvement in the industry. Earlier this year, a report by the European Banking Authority (EBA) highlighted the phenomenon of “de-risking,” whereby lenders disqualify entire sectors because they consider them risky, rather taking a case-by-case approach.

Those remarks, as well as the progress made with the new law, have already resulted in improvements for Belgian diamantaires, Neys explained. In a February circular following the EBA’s intervention, the National Bank of Belgium (NBB) urged financial institutions to pay attention to the European body’s comments.

“We think that the banks understood the message clearly and are now looking into new policies concerning the diamond industry,” Neys added.

Neys also pointed out that the new banking law was a “plan B.” The best solutions are “structural” ones that fundamentally change banks’ policies and relationships with the trade, he stressed.

Image: Polished diamonds. (AWDC)

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