Italy's luxury sector and Belgium's diamond leaders brace for economic impact from Russian sanctions

As EU leaders band together to decide on an applicable sanctions package for Russia invading Ukraine, it is becoming increasingly clear that the luxury sector will suffer some impact.

Belgium’s diamond businesses and Italy’s luxury companies are two countries who have strong economic ties to Russia. While both support government sanctions, they must face the possibility of the impact on their own sectors to minimise any economic damage.

“Sanctions can have a significant impact on the diamond business,” said Tom Neys, spokesperson for the Antwerp World Diamond Centre (AWDC), reported Gazet van Antwerpen on Wednesday (prior to Thursdays attack). “It is a blow that should hurt Russia but there is a chance that we do more damage to ourselves. The Russians can easily trade their diamonds with non-EU countries.”

The Brussels Times reported more than 1 billion euros of Russian diamonds passed through the Belgian port in 2020. A recently signed agreement between Antwerp World Diamond Centre and Russia’s ALROSA would see 86 percent of its rough diamonds pass through Belgium, the AWDC stated.

In Italy, Carlo Capasa, president of the Italian National Fashion Chamber, said more than 1 billion euros worth of luxury exports to Russia could be at risk, even as Russian buyers return to Milan for the first time since the pandemic thanks to a deal brokered with the government to recognise the Sputnik V vaccine for business travellers, reported Euronews.

"It is high risk, of course, but what is worrying us is the risk of the war,” said Capasa. “The centre of our worry is the death of so many people, the life of the people, the health of the people. We are coming out of two years of pandemic and we don't need a war so we wish that we find another solution."

17.32 - This article has been updated to reflect that Tom Neys' statement in the Gazet of Antwerpen preceded Thursdays attack.

Article source: The Brussels Times, Antwerp Gazette, Euronews