Chinese using pink diamonds for money laundering in Australia

Wealthy Chinese, Australian pink diamonds – more than meets the eye?

Reuters has reached out to DDCA President Rami Baron for opinion on the surge of cash entering Australia from wealthy Chinese buyers looking for a safe haven away from the market turmoil of their home markets.


Under Australian regulations, foreigners can splurge millions in cash for precious stones or a prime property without having to identify themselves or the source of their funds.

The latest asset of choice for wealthy Chinese buyers appears to be pink diamonds – prized for their rarity. They make up just 0.01 percent of the world diamond market.

Wealth managers and precious stones dealers said Chinese, already the second-largest buyers of diamonds globally, are increasingly flocking to buy the gem in Australia, which produces 90 percent of the world’s pink diamonds.

There is no national data on sales, but these sources say anecdotal evidence shows a sharp rise in buying in recent months.

“Rich Chinese are coming to Australia to buy pink diamonds, only the finest and rarest of pinks are mined here,” Rami Baron, president of the Diamonds Dealers Club of Australia, said.

The price of pink diamonds has nearly doubled in the last five years. Jewelers say one carat of top quality pink diamond can cost more than A$1 million ($690,000) versus about A$23,000 for a flawless white rock.

However, sellers of diamonds are under no obligation to ask buyers where their funds come from, Baron said.

“We are in full support of all steps which eliminates the rogue element in our industry. However, we are neither police nor the tax man.”


Read the full article here:

http://www.reuters.com/article/us-australia-outflows-china-idUSKCN0UZ2T5