UAE-Israel Accord Could Bring a New Dimension to Dubai Diamond Trade

Right after the UAE and Israel normalized ties, traders in Dubai say that they are continuously receiving enquiries from Israelis, who usually trade in Belgium’s Antwerp – the world’s biggest trading center of rough and polished diamonds.

Israeli diamond trader Zvi Shimshi flew to the UAE for opening a company in Dubai, a pivotal trading hub for the precious stones. He is among 38 Israelis whom the Dubai Multi Commodities Centre (DMCC), home to the Dubai Diamond Exchange, said have recently contacted for a business setup welcoming this new change in global trade dynamics.

On August 29, 2020, the president of the United Arab Emirates (UAE), Sheikh Khalifa bin Zayed Al Nahyan, issued Federal Decree-Law No. 4 of 2020, abolishing Federal Law No. 15 of 1972 on the Boycott of the State of Israel. The purpose of this abolition is to expand diplomatic and commercial cooperation between the two countries. As a result, Emirati citizens and corporations can now freely enter into commercial, financial, and trade agreements with Israeli corporation. It will also allow direct flights between the two countries.

Dubai, with $21.2 billion in diamonds traded last year according to the DMCC, and Israel, with around $12 billion according to its exchange, are the Middle East’s main diamond centers. This initiative will be a game changing opportunity for any Israeli who wish to start a diamond business in Dubai. DMCC figures indicate that Dubai imported $4.2 billion of polished diamonds in 2018, down from $7.3 billion in 2012 – and exported $3.96 billion in 2018 compared to $5.35 billion in 2012.

“Dubai has an opportunity to develop as a global diamond trading network for polished, and open up channels to the rest of the Arab world for diamonds and jewellery,” said Martin Rapaport, the chairman of Rapaport Group.

For Israel, in which there is a substantial market for polished stones, Dubai offers closer links to India and connects it to the Arab world, where most countries still do not have formal ties with the Jewish state.

“We see Dubai as a golden gate,” Israel Diamond Exchange president Yoram Dvash told Reuters.

Ezra Boaron, who owns Israeli manufacturing factory Rising Star Diamonds, agreed: “The entire Arab world passes through Dubai. It’s a giant market.”

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