"As long as you have women in the world..." says Even Zohar, "you will sell diamonds
"The diamond industry operates by different norms and systems to other industries."
They're buying roughs we don't need for the Israeli industry and selling polished,
"The Indian diamond industry is much larger than Israel's. There are 700,000 cutters in India and 10,000 in Israel. But the cutting is different. In terms of value it equals out. Both industries are worth about 2.7 billion."
Deals are typically sealed with the words mazal u' bracha,/ מאַזלדיק און ברכה Hebrew for "luck and blessings," a phrase so common that even non-Jewish traders use it.) The club even has a "lost and found." It's a matter of pride that no stone goes unreturned.
Panama launches diamond exchange for bling lovers: COMMODITIES
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Latin America is getting a new financial market. But forget frenzied pit trading or the dizzying blur of numbers on screens. In the new bourse, due to open in Panama this year, deals worth millions of dollars will be sealed with a solemn handshake and the Hebrew phrase "Mazal u' Bracha" - "luck and blessing".
Welcome to the hallowed world of diamond dealing. Panama is this week formally launching a $200m Panama Gem and Jewellery Center that will also house the Panama Diamond Exchange (PDE) - a market expected to help the $8bn fine jewellery retail business in Latin America grow to more than $10bn by 2017.
The PDE, which is expected to start trading before the end of the year in Latin America's fastest-growing economy, is the 29th such market worldwide.
But it is the first in a bling-loving region that is home to a fast-growing middle-class, large luxury set and which also has an established tradition as a producer of coloured gemstones, such as emeralds from Colombia .
"Latin America is a jewellery market of great potential that, to date, has never fulfilled its promise," said Eli Izhakoff, honorary president of the World Federation of Diamond Bourses, the World Diamond Council and the World Jewellery Confederation.
A lack of a diamond exchange in the region has meant that Latin American buyers typically had to travel to the US or Europe, or to buy second-hand at a premium, Mr Izhakoff told the Financial Times in emailed responses to questions.
Diamonds will be flown in from places such as New York, Antwerp, Tel Aviv, Dubai, Hong Kong and Mumbai, says Erez Akerman, PDE president.
Exchange members - who are carefully vetted, must provide personal guarantees and adhere to a strict code of conduct - will scrutinise the rough or polished stones under neutral lights in the high-security trading centre before deals can be concluded.
The idea is that the PDE will become a hub for the region billed as the world's most untapped jewellery market.
"The retail value of the fine jewellery business in Latin America is about $8bn and given current growth rates, it is fair to state that it will be worth in excess of $10bn by 2017. The wholesale value will be in the region of about $5bn," said Mr Izhakoff.
Credit: By Jude Webber in Mexico City
Word count: 392
(Copyright Financial Times Ltd. 2014. All rights reserved.)
Old Ways Hinder Tracing of Diamonds
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"In all my years of observing arbitration, I have never heard anyone contest the saying of the word `mazal,'" says S. Herman Klarsfeld, longtime general counsel of the New York Diamond Dealers Club. "It's something that is so steeped in the tradition of the diamond industry, it is almost like an oath."
Antwerp and Amsterdam diamantaires still recall how the Nazis ostensibly made "nice offers," such as: "Hand over all of your diamonds and give us a list of your friends and relatives, for whom we will guarantee safety in return for the surrender of their goods." Many desperate diamantaires complied -- only to discover later that the lists they had prepared were subsequently used to round up the Jews for deportation.
"Many Jews even brought diamonds with them to concentration camps," recalls one dealer. "No one knew they would be taken away." After liberation, some surviving diamond dealers received empty envelopes that apparently had been used when the gems were collected. Some of these envelopes even have a stamp of the Third Reich, the name of the raiding unit, the name of the dealer and the number of carats taken. This attention to detail can be seen in many instances of Nazi looting; inventories were made of each home, as well as each diamond factory raided.
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Old Ways Hinder Tracing of Diamonds
NEW YORK -- Diamond dealers come in all nationalities. But from Bombay to Bangkok, when they seal a deal, they typically do it with a handshake and two Hebrew words: mazal u'bracha -- "luck and blessing."
The widespread use of an oral agreement in the diamond business is making the restitution of inventory stolen during the Holocaust even more difficult than in the cases of hidden Swiss bank accounts and looted canvases. Many diamond-dealing Jews in Antwerp, noting the renewed interest in materials looted by the Nazis, are now turning their eyes to the millions of dollars in gems taken from them during the occupation. At least $25 million in diamonds were taken from Jewish dealers during the Nazi occupation of Belgium, according to postwar intelligence documents.
While banks are required to keep records, and paintings have detailed provenances, diamond deals -- even when they involve millions of dollars -- are done with a handshake. This custom can be traced back to the Talmudic concept of tkias kaf, says vice president of the Diamond Dealers Club, Zvi Farber. "This principle says business deals don't need to be written down, unlike a marriage, where you need written documents." Even after the initial handshake, diamonds are often a cash business without formal records.
"In all my years of observing arbitration, I have never heard anyone contest the saying of the word `mazal,'" says S. Herman Klarsfeld, longtime general counsel of the New York Diamond Dealers Club. "It's something that is so steeped in the tradition of the diamond industry, it is almost like an oath."
But there are certain circumstances where oral oaths are meaningless -- Nazi-occupied Europe was one of them. Many of the diamonds were seized in 1940, when the Nazis took control of 1,200 diamond "factories" in Antwerp. These stolen diamonds were quickly sold, most going to Switzerland and Spain, and the profits from the sales were used to fund the war. After the war, some Jewish survivors actually got their gems back, as the Belgian government set up a commission to redistribute the looted merchandise. Still, millions of dollars remain lost.
Portable, easily concealed and valuable, diamonds saved many lives during the war. Dealers who fled Nazi-occupied territory sewed diamonds into their hats, overcoats, and undergarments, allowing them to bribe guards and customs officials. But some dealers were not able to escape with their inventory; when Hitler's armies crossed into Holland and Belgium, German soldiers seized millions of dollars worth of inventory from Jewish dealers.
Antwerp and Amsterdam diamantaires still recall how the Nazis ostensibly made "nice offers," such as: "Hand over all of your diamonds and give us a list of your friends and relatives, for whom we will guarantee safety in return for the surrender of their goods." Many desperate diamantaires complied -- only to discover later that the lists they had prepared were subsequently used to round up the Jews for deportation.
"Many Jews even brought diamonds with them to concentration camps," recalls one dealer. "No one knew they would be taken away." After liberation, some surviving diamond dealers received empty envelopes that apparently had been used when the gems were collected. Some of these envelopes even have a stamp of the Third Reich, the name of the raiding unit, the name of the dealer and the number of carats taken. This attention to detail can be seen in many instances of Nazi looting; inventories were made of each home, as well as each diamond factory raided.
The diamond industry has historically been shaped by outside forces. It was the Inquisition in the 15th century that forced diamond-dealing Jews to relocate their center of trade from Portugal to the more tolerant Low Countries of Belgium and Holland. The dealers and manufacturers who escaped the Germans' grasp again took the industry with them, forming a "diamond diaspora" in Cuba, Brazil and what was then British-occupied Palestine.
After World War II, the industry was permanently scattered. Most dealers left Cuba and Brazil, and some returned to Antwerp, where the government made a concerted effort to lure them back. But the main beneficiaries of the "diaspora" were Israel and the United States. Most of the cutters who emigrated to Israel stayed there. Officials of the fledgling state saw diamond manufacturing as one of its few industries with promise, and went out of their way to nurture it. Today, thanks in part to low labor costs, Israel is one of the world's leading diamond manufacturers.
Just as the Inquisition created the business in the Low Countries, some say that 47th Street was "created" by the Holocaust. So many diamond-dealing Jews descended on New York in the 40s and 50s that the industry outgrew its traditional home on the Lower East Side and moved uptown to 47th Street, closer to big-name jewelers like Tiffany and Harry Winston.
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'Dirty' Diamonds Debate Rocking Jewelry Business
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In an unprecedented move, this secretive and cliquish industry has decided to join hands and try to cleanse the business of so-called "blood," "tainted" or "conflict" diamonds, as they are called. Industry leaders hope to ward off a potential consumer backlash like the one faced by the fur industry a few years ago. The industry is currently lobbying Congress and the Bush administration to take the lead in the fight against conflict diamonds.
"There is no question we want to protect our industry," said Eli Izhakoff, a diamond dealer and chairman of the World Diamond Council, a body set up by the industry last July specifically to combat conflict diamonds. "When one person's death is associated with diamonds, that's one person too much," he said.
"It is exactly like tap water: when you drink it, you know it is clean because it has been filtered at water-treatment plants beforehand," said Mr. [Jeffrey Fischer], who is also a member of the WDC. "If you are certain the diamond you are buying has been `filtered' at the source, the worries disappear." Experts have been working to set up a reliable certification system for months and a final decision is expected at a meeting this week in Namibia.
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`Dirty' Diamonds Debate Rocking Jewelry Business
By MARC PERELMAN
FORWARD CORRESPONDENT
The only choice they have is between "short sleeves" and "long sleeves," between a machete hack below the elbow or under the shoulder.
They are the estimated 20,000 civilian victims of the gruesome forced-amputation rituals performed by the Revolutionary United Front, a rebel group in Sierra Leone. And they are the diamond industry's worst nightmare.
Proceeds from the diamond trade are the lifeblood of the RUF and other rebel groups in Angola and the Democratic Republic of Congo. So when media and U.N. reports about the deadly gems-for-guns business started surfacing in the wake of a vigorous campaign by non-governmental organizations 18 months ago, alarm bells started ringing in the diamond world, from South Africa to 47th Street, from Netanya, Israel to Antwerp, Belgium.
The campaign is being closely monitored in Israel, which exports half of its diamonds to the U.S. -- about two-billion-dollars' worth in 1999.
"We are obviously concerned about the outcome in the U.S because any strong limitations on imports would mean the end of the game for many people here," said Shmuel Schnitzer, chairman of the Tel Aviv Diamond Exchange.
Jewish dealers play a central role in the diamond business -- one that goes back to Europe and the need for a livelihood that was both lucrative and portable. Ernest Oppenheimer, the founder of De Beers, the South African diamond and mining giant, was a German-Jewish immigrant who later converted to Anglicanism. The "Rappaport price list," named after a Jewish New Yorker who immigrated to Israel, is a standard of the industry.
But possibly the most telling example of the Jewish presence in the diamond trade is the age-old tradition of concluding verbal transactions with a handshake and the recitation of "mazal u' bracha," luck and blessings.
"A number of people in the business are children and grandchildren of Holocaust survivors," said Jeffrey Fischer, the chairman of the Diamond Manufacturers and Importers of America. "So the meaning of the suffering in Africa is not lost on us."
In an unprecedented move, this secretive and cliquish industry has decided to join hands and try to cleanse the business of so-called "blood," "tainted" or "conflict" diamonds, as they are called. Industry leaders hope to ward off a potential consumer backlash like the one faced by the fur industry a few years ago. The industry is currently lobbying Congress and the Bush administration to take the lead in the fight against conflict diamonds.
"The industry is scared that the public will start to think that diamonds, the symbols of love and eternity, are killing children," said Emmanuel Frisch, CEO of Frisch Diamond Corporation in Antwerp.
"There is no question we want to protect our industry," said Eli Izhakoff, a diamond dealer and chairman of the World Diamond Council, a body set up by the industry last July specifically to combat conflict diamonds. "When one person's death is associated with diamonds, that's one person too much," he said.
However, some non-governmental organizations and a few members of Congress worry that the industry's moves are merely window dressing. More fundamentally, it remains to be seen whether conflict diamonds can really be eradicated from the diamond trade.
When the campaign against conflict diamonds was launched in October 1999 by several NGO's, most notably the London-based Global Witness, the diamond industry first downplayed the problem. It claimed such diamonds only account for a mere 4% of the $7 billion world annual production. Global Witness places the figure closer to 8%.
But De Beers, which controls two-thirds of the world diamond production, quickly realized the need to switch to damage-control mode. It prodded the industry to form the WDC and tackle an issue that was also making headway at the U.N, which imposed a ban on diamonds coming from rebel-held zones in Sierra Leone and Angola -- only allowing "certified" diamonds to be exported. However, there was, and still is, a problem: There is no reliable scientific method of tracking the origin of diamonds. And most experts agree this may take years to achieve.
The WDC thus decided to enforce what it deems the best -- if not ideal -- solution to guarantee a clean "mine-to-finger" diamond pipeline: a certificate of origin for rough diamonds.
In concrete terms, rough diamonds would be sealed in tamper-proof containers, authenticated by non-forgeable documents and digitally photographed prior to export. They would only be allowed into processing countries (essentially Belgium, Israel and India) provided they fulfill all these requirements. This means that polished and jewelry diamonds then heading to consuming countries would -- in theory -- be "conflict-free."
"It is exactly like tap water: when you drink it, you know it is clean because it has been filtered at water-treatment plants beforehand," said Mr. Fischer, who is also a member of the WDC. "If you are certain the diamond you are buying has been `filtered' at the source, the worries disappear." Experts have been working to set up a reliable certification system for months and a final decision is expected at a meeting this week in Namibia.
The WDC has decided to focus its efforts on the U.S. because it accounts for half of the $56 billion annual jewelry retail sales in the world. This past September it hired Akin, Gump, Straus, Hauer & Feld, a well-known international law firm based in Washington, D.C., to draft model legislation and lobby for it in Congress.
The draft calls for the banning of diamond imports stemming from countries that have not established a certification system. It also encourages the U.S. president to negotiate an international treaty establishing global rough-diamond control, in line with a resolution unanimously passed by the U.N General Assembly last year.
The initiative has been widely praised, except by Tony Hall, a House Democrat from Ohio, who is about to propose his third bill, the Clean Diamonds Act, on the issue. He will also propose an import ban, but he wants the certification process to include polished and jewelry diamonds. The WDC claims that it is virtually impossible to track the origin of polished and jewelry diamonds, and hence wants to restrict the certification to rough diamonds.
"I don't trust the diamond industry at all, they are just playing games and trying to get a lot of conflict diamonds in the country," Mr. Hall said.
The WDC is confident the differences can be ironed out. The Bush administration has yet to take a stance.
In any case, Americans are not really concerned about conflict diamonds. According to a poll of 300 consumers taken last October by MVI Marketing, 93% of the people interrogated had never heard of them. Still, 76% said they would not buy a diamond if they knew it was coming from "a country where social injustice was occurring as a consequence of its production." "People are not asking, really," said Jacky Kimchi from the polished diamond trading company Tache USA.
His views were echoed by a dozen jewelry sellers on 47th Street, who all brushed aside any possible consumer backlash.
"Okay, the public has not reacted yet," Mr. Hall admitted. "But when people will find out that they are abetting the killing and maiming of children, the diamond industry will have a p.r. disaster to deal with."
However, a rough control system can only work if there are efficient and non-corrupt authorities enforcing it on the ground. And in war-torn Sierra Leone, Angola and the Congo, this is precisely what is missing. The record of the certification systems put in place in Angola and Sierra Leone to comply with U.N. sanctions is mixed at best.
Smuggled or illicit diamonds are believed to represent some 20% of the world production.
"All the big diamond guys have already been granted certificates by the government in Sierra Leone and are back dealing in conflict diamonds as usual," said Will Reno, a political science professor and expert on Sierra Leone at Northwestern University.
"It sells well to say we only buy diamonds coming from government-controlled mines," said a rough diamond trader based in Tel Aviv. "But we all know this is not true and this is why the certificate sounds like b-- to me."
"I am a not a big shot in the business, so if I start asking whether the diamonds are kosher or not, the sellers will not come to me anymore," he added.
All these difficulties are compounded by several factors. Diamonds are not sold individually, but in parcels, which means they are sorted and mixed many times before they reach a processing center. Moreover, because the gems of Sierra Leone, Angola and Congo are high quality, they are an obvious temptation for unscrupulous traders. And there is nothing easier than hiding and smuggling a diamond -- even more so in lawless areas.
The rebels have indeed been able to channel their diamonds to countries such as Liberia, Burkina Faso, Gambia, Ivory Coast, Guinea, Togo and Ukraine. By simply checking customs records, the U.N. found that the diamond exports of these countries are actually much higher than their actual production capacities.
The problem is not limited to African countries. For example, huge quantities of diamonds are passing through Switzerland's so-called tax-free areas, or Freilager, at Zurich and Geneva airports. They are essentially De Beers diamonds headed for London, where the company sells its rough diamonds. But Swiss authorities do not record their country of origin. When they enter the U.K., they are officially imports from Switzerland. Their real origin is thus lost. In addition, the parcels can be opened and sorted in the free areas before being sent elsewhere by some 40 companies.
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The Israeli Diamond Exchange is one of the country's major exporters. But with rival bourses eager to win more business and one of its traders accused of defrauding $65m, it is being urged to beef up regulation. By John Reed
Housing a world where deals worth millions of dollars are sealed on the basis of handshakes, a slip of paper and the Hebrew oath "Mazal u'Bracha" (trust and bless), the Israeli Diamond Exchange is home to one of the world's largest trading floors of its kind. On any given day, according to the diamond controller, some $10bn of the precious stones are on site, in safes, boxes, pouches or piled on the white paper blotters of some of its 2,500 registered "diamantaires", the traders and cutters of the stones.
The system, say its advocates, is built on trust. But the opaque world of Israel's diamond bourse in Ramat Gan, near Tel Aviv, is under rare public scrutiny due to a criminal investigation into one of its own. Hanan Abramovici, a veteran diamantaire, was arrested by Israeli police on April 20, triggering an investigation into accusations that he defrauded fellow traders of $65m worth of money and stones. He has not been charged.
The incident threatens to have a direct effect on traders who have allegedly lost out. But more widely, it will raise questions about the regulation and operation of a market where the presence of the state is limited and business disputes great and small are settled internally between traders. At stake is the future of a major industry in Israel with deep roots in Jewish history. Depending on what the investigation turns up, it could intensify calls for the authorities to introduce more transparency into the market.
The bourse runs an internal arbitration system to resolve disputes, and traders avoid going to law enforcement authorities except as a last resort. The system's failure to solve this one, which prompted traders to lodge a police complaint, is what makes it so rare.
Some officials, including former Bank of Israel chairman Stanley Fischer , have previously urged the exchange to embrace greater transparency to attract financing and remain competitive.
Administrators say the bourse is open to greater transparency and liken it to a "family", adding that they want to keep it that way. "Diamantaires when they have problems usually like to solve it in the family," says Eli Avidar, a former Israeli diplomat who is the bourse's managing director. "Just because we have one crook among us [would not]mean we need to change our culture. We definitely don't have to delete our trust system. He adds: "This is an industry of families; we have families of diamantaires with the fourth generation entering business. This is the way we do it, and we love it."
Uncomfortable questions
While much of Israel's traditional diamond-polishing business has decamped to India or other cheaper countries, some rough stones - particularly higher-value ones - are still polished in the country. The overall industry, from high-tech polishing operations in Ramat Gan to jewellery retail - employs about 17,000 people, not including employees and affiliates of Israeli diamond businesses overseas. Net polished diamond exports from Israel were valued at $5bn in 2015, more than 10 per cent of the total goods the country sold overseas, with the US and Hong Kong the biggest buyers. However, the figure represented a 20 per cent drop on the year before, as the industry continued to face pressure from growing competition and a long-term fall in diamond prices.
The case of Mr Abramovici - whose lawyers say is innocent of any wrongdoing - has raised uncomfortable questions, some of which go beyond the alleged fraud. Why did it take his fellow traders seven months after he stopped paying them to report his alleged wrongdoing to police? More broadly, why does Israel - a country with top credit ratings and a reputation for solid regulation of business - allow a lightly regulated market regime to persist?
The bourse has been tarnished by scandal before. In 2011 the police accused five diamantaires of running an "underground bank". Two have been jailed, with other cases still pending, after prosecutors found that some traders were using fake invoices or stones and fictitious diamond deals to move hundreds of millions of dollars through the market.
There are no allegations of money-laundering in the Abramovici case. His lawyers, Adi Carmeli and Uri Keinan, say their client is fully co-operating with police, and "is confident that he didn't commit any crime" .
Instead they blame shortcomings in the operation of the bourse for their client's situation. They say his only offence was falling into financial difficulties during the 2008 crisis, and they fault other exchange members for saddling him with more debt than he could repay.
"He has been a member of the bourse for 31 years," says Mr Carmeli. "The people they should be pointing a finger at is themselves: they gave him . . . more than he could take by giving him credit."
Yoram Dvash, the bourse's newly elected president, has declared a commitment to open up the market and has "put his full weight behind the police investigation," says Mr Avidar. However, critics - including current and former traders interviewed by the Financial Times - say the bourse still has work to do.
"There is nothing transparent in the whole business," says one trader who alleges that bad practice is rife. "It never was transparent, never was supposed to be transparent - but it was thought to be transparent between the traders."
Raviv Drucker, an Israeli investigative journalist who reported extensively on the "underground bank" trial, says: "The diamond market is operated in a stinky way that does not suit the modern society that we are familiar with. This is another case where the heat is so big that they cannot contain it inside their closed buildings."
Code of conduct
In what may be a sign of the bourse's commitment to openness - or perhaps of the pressure it faces - it invited the FT to visit the high-security exchange that sprawls across three interconnected buildings: a self-contained world that includes five synagogues, restaurants and an L-shaped trading floor.
Yaakov, who like other traders interviewed asked that his name be changed to avoid being identified, says Mr Abramovici was able to continue doing business even as his debts mounted. "It went on for the last eight months," he says. "For a lot of that time he was claiming that he would pay back the whole 100 per cent" of what he owed.
Under its internal code of conduct, a diamantaire can be disciplined if another trader files a legal complaint with the bourse. Two board members then call a meeting to interview both parties and issue a verdict, which could be a fine or temporary expulsion from the trading floor. In a glass noticeboard at the entrance to the trading floor, there are "Wanted"-style posters bearing the names and photographs of banned diamantaires.
Mr Abramovici had fallen into difficulty before in 2008, when the global crisis froze credit lines. Fellow traders reported him to the bourse after some of his cheques were returned. Unable to pay his debts, he went through an internal process arbitrated by the bourse. Mr Avidar says he paid his creditors back 70 cents on every dollar he owed and resumed his operations.
When Mr Abramovici's problems recurred last year, other traders held off complaining because he told those he owed money: "Next week I have an excellent deal coming," says Mr Avidar. When they did finally complain he encouraged them to go to the police.
The diamond industry - with its roots in Jewish trading centres in Europe and central Asia - began migrating to Ramat Gan during the second world war, when Belgium and the trading centre of Antwerp fell under Nazi control. It flourished into the 1980s, when the country was hit by recession. Highlighting the importance of diamonds to the economy at the time, traders were exempted from capital controls and welcomed by the state as a steady source of hard currency from overseas for an economy starved of it. Today, the global diamond trade is in the crosshairs of regulators as a potential tool for money laundering.
"Diamonds, like expensive artworks, bearer bonds and thousand Swiss Franc notes, are not just easy ways to transport high values across borders, but extremely hard to trace," says Nicholas Shaxson, a journalist and author of the book Treasure Islands , who writes on tax havens and avoidance.
Meir Ohana, a Ramat Gan trader, was convicted of laundering cheques and creating fictitious accounts in the 2011 "underground bank" case. He was also found guilty of moving money abroad under the cover of importing diamonds, without reporting any of it to tax authorities. The state, in its indictment, said Mr Ohana imported fake stones in place of real diamonds. He was sentenced last year to 10 years in prison and fined 1m shekels ($265,000).
In the same probe Menachem Magen, another trader, was convicted of providing unauthorised currency trading under the guise of selling diamonds. According to the state, no accounts were kept on the transactions, nor receipts nor invoices issued. Mr Magen is serving a 60-month prison sentence.
Bourse officials say the affair was a one-off. Yet some traders say questionable business practices are still common. A former trader - known as Shlomo - says handwritten scrips are common, and recalls writing one himself on a napkin. He says these receipts are treated as the equivalent of cheques, and sometimes used as collateral to raise money from the banks operating in the bourse. He also alleges that overstated or fictitious diamond sales have been used to channel money through the market, because a 1.3 per cent tax is assessed on diamantaires' turnover.
"Many people are trying to use the system of taxation in the diamonds to take money and make it 'white'," he says. Mr Avidar says that while many trades are still done with handshakes or handwritten scrips, this does not relieve traders of the duty to document deals with proper paperwork, and that they are complying. Mr Abramovici's aggrieved business partners have presented police with a paper trail of invoices and receipts.
"Being a diamantaire in Israeli in 2016 is more complicated than being any other type of businessman, because of the large amount of regulation and the necessity of filing reports and complying with local and international regulations," says Mr Avidar.
Shlomo claims that the margins on diamond trading are now so poor - with prices having dropped nearly a third since 2014 - that financial engineering seems to be the rule rather than the exception on the bourse. Anyone who wants to deal in diamonds without dabbling in financial transactions, he says, will not survive. When asked what 2,500 traders are doing on the bourse, Shlomo says: "Fighting for their lives."
The regulator
Shmuel Mordechai, the director of Israel's Diamond Controller and the market's senior regulator, sits in an office inside the Ramat Gan complex. His office has only 10 staff. "We do two things: licences and customs," he says. Mr Mordechai adds that his office does not get involved in disputes between traders. "It's not my problem," he says.
All diamonds that enter Israel go into the customs room overseen by his office, part of the economy ministry. One or two stones per parcel are spot-checked to confirm their declared value is correct, he says.
A new law on money laundering, due to take effect in September, will prohibit cash deals and require greater disclosure. Traders who receive more than 50,000 shekels of diamonds - a small amount, by the standards of the trade - will have to declare it, as will any two people who trade diamonds worth more than 50,000 shekels a month.
When asked if Israeli enforcement needs to be tougher, Mr Mordechai replies that he believes a stricter approach would make the diamond trade migrate away from Israel. "No problem - give me another 100 people," he says. He adds: "If you put in another 100 people . . . I am not sure you would find a business here." In the diamond business, "you can move in five minutes to Dubai if you have a foreign passport, or Belgium, or Hong Kong."
Speed read
Credit crunch Hanan Abramovici also faced problems in 2008, going through an internal process arbitrated by IDE
Regulatory push A new law on money laundering will ban diamond dealing in cash and require greater disclosure
Problems on the bourse Israeli police in 2011 prosecuted five diamantaires for running an 'underground bank'
Credit: By John Reed
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(Copyright Financial Times Ltd. 2016. All rights reserved.)
Best in Show: Hot News + Trends From 2007
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Last year, a common question at The JCK Show was "Palladium jewelry: What's that?" This year, the phrase was "Palladium jewelry: Tell us how to sell it!" The market for the light, white, precious metal is growing significantly. In 2005, there was virtually no palladium jewelry at the show; in 2007, palladium accounted for up to 20 percent of some companies' jewelry intros.
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Trade fairs are the perfect venues for discovering what's best, what's next, and who's making the biggest splash. Following are JCK's picks for Best in Show from this year's jewelry week in Las Vegas.
BEST PLACES TO SPOT ATTAINABLE, FASHION-FOCUSED JEWELRY
The Gold Expressions by Bel-Oro booth focused on marketable interpretations of top Italian design, and the World Gold Council booth high-lighted pieces selected by its Blue Ribbon Panelfor fashion sense and salability. Both collections are sure to appeal to self-purchasing women--the category JCK has been touting for years as the industry's best opportunity for growth. Investment icon Warren Buffett 's recent purchase of Bel-Oro International and Aurafin LLC makes us feel even more certain that our passionate belief in this category is on target.
BEST RESULTS WE'VE SEEN IN COMPETITION
Diamond Promotion Service 's 2007 Journey winners illustrate why the concept took off like a rocket, with sales going from zero to $1 billion in one year. (The designs are a vast improvement over those submitted for DPS's right-hand-ring competition a few years ago.) All the winning Journey designs were good, and some, like Colorcraft 's convertible drop-to-hoop earring, were especially notable. Though it received an honorable mention and not top prize, we think two classic, elegant looks in one earring is totally clever!
BEST IDEA FOR CUSTOMERS WHO CAN'T MAKE UP THEIR MIND
Just when you thought you had seen everything, Tetsuo"Teddy" Maruyama of C. Link , Japan, showed hanks of color-changing pearls. These have been coated in some secret fashion--apparently using nanotechnology--with a material that changes color when exposed to ultraviolet light. Strands of pink, mauve, blue, cream, and green pearls change back to white when taken out of the sun.
BEST FASHION-FORWARD GEM JEWELRY
If you didn't get to the Feninjer show in São Paulo, Brazil, the Brazilian Pavilion in the World's Fair section of The JCK Show was the next best thing. Exhibitors in the section are continuously raising the level of quality, design, and use of Brazilian gem materials. From Vianna and FR Heub at the front of the section, to Stone World and Ben Sabbagh at the back, it was a gemaholic's dream--not to mention that the finished jewelry designs were also excitingly fresh.
BEST ALMOST-EDIBLE JEWELS
Yes, chocolate pearls are treated, but they're still gorgeous! Just be sure to disclose everything and alert customers to any special care requirements beyond the usual no-perfume advice. Best sparkly version? Chocolate diamonds. We taste a trend here, and it's one that offers some enticing in-store promotion possibilities. Women and chocolate are tailor-made for a great event! Witness the hordes mobbing the chocolate fountain at the Le Vian Red Carpet Fashion Show on Sunday afternoon if you don't believe us.
BEST TURNKEY TV AD PROGRAM
Spot Runner 's customizable TV commercials are professional and on trend, and the program is designed to help jewelers identify the best media placement based on their individual store, budget, and target market. The Diamond Promotion Service was the first in the industry to team up with Spot Runner, and now Stuller has introduced a new Spot Runner program for its customers as well. Stuller's series of ads, introduced at The JCK Show, are different from the DPS ads and incorporate Stuller product.
BEST ASSOCIATION MERGER
Terry Chandler (president/CEO, Diamond Council of America ) and Cindy Ramsey (deputy executive director, American Gem Society ) tied the knot June 5 in the wedding chapel at the Venetian. This one's for real, folks! They got engaged during AGS Conclave in April (you should see the canary beauty she's been sporting) and moved their September nuptials to June at the conclusion of The JCK Show. The festivities were attended by a host of industry faces as well as Terry's son, Ian, and Cindy's daughter, Sheri. As we in the industry say when a deal is closed, mazal u'bracha (luck and blessings)!
BEST NIFTY GEM TRICK
Chi Huynh, gem and jewelry artist at Galatea: Jewelry by Artist , San Dimas, Calif., was told by pearl experts that his idea of using gemstone bead nuclei in black-lipped oysters wouldn't work. They were wrong. After persuading implantation experts that his idea could succeed, he began growing black pearls using citrine, amethyst, and turquoise bead nuclei. Three years later, he harvested beautiful AAA quality Tahitian-like (but Vietnamese) black pearls and carved them to expose the nuclei. It stunned the pearl world--and us.
BEST DISCLOSURE
Red corundum, as any gemologist knows, is called ruby. But when the mineral has been enhanced through beryllium diffusion--and it generates red-colored corundum--suppliers are reluctant to call it a ruby. Suppliers of beryllium-treated sapphire deserve praise for calling it red sapphire instead.
BEST JEWELRY/CULTURE EVENT
The World Gold Council 's "Italian Passion: Food, Fashion, Gold!" at Piero Selvaggio's Valentino restaurant presented the Italian-focused Gold Expressions jewelry collection by dividing it into the three categories from which its designers hail: Piemonte, Toscana, and Veneto. Each occupied a separate room, where delicious food and wine from the respective locales poured forth. Tasting black risotto with cuttlefish, drinking a full-bodied red wine, looking at gorgeous gold jewelry, and chatting with miraculously revived industry peers ... it doesn't get much better than that.
BEST EASY PLEASURE
Amid the show's intensity, one booth was surprisingly, appealingly soothing. Toby Pomeroy 's collection doesn't change drastically from year to year, but with its beautiful matte finishes and small sprinklings of diamonds, it's consistently good and lovely to behold and wear. Notable this year was a beefed-up basic: an elongated gold-and-diamond hoop earring. An added bonus: Pomeroy's gold is green. Not in color, but in environmental consciousness, as he uses EcoGold, a reclaimed gold, in all of his pieces.
BEST COOL NEW PEARL JEWELRY
Vibe , a new-to-the-market company--represented by Fragments showroom--stood out even among the plethora of companies offering new and interesting pearl designs. One of our favorites at Vibe featured a baroque pearl with a chain of linked golden seahorses.
BEST WATCH WINDERS
The surge in self-winding (automatic) mechanical watches, from affordable to luxury, has prompted growth and advances in watch winders. Orbita 's Avanti 12 , the first wall-hung multiple watch winder, has programmable microprocessor controls for each module. For the Underwood (London) Biometric Lock System , the "key" to the briefcase in which watches and their winders are kept is the watch owner's fingerprint (pressed on a tiny pad), providing security at home, in-store, and when traveling. Wolf Designs ' 4.0 single module rotator has a patented connecting system, enabling the serious enthusiast to add modules as his or her collection grows.
BEST NEW PROFIT IDEA
Last year, a common question at The JCK Show was "Palladium jewelry: What's that?" This year, the phrase was "Palladium jewelry: Tell us how to sell it!" The market for the light, white, precious metal is growing significantly. In 2005, there was virtually no palladium jewelry at the show; in 2007, palladium accounted for up to 20 percent of some companies' jewelry intros. The "Palladium: The Time Is Now" seminar, hosted by Palladium Alliance International (www.luxurypalladium.com ), welcomed about 275 retailers. PAI unveiled sales training, bench guides, and other free materials to help jewelers and is developing a national marketing program.
BEST CELEBRITY SPOTTING
Those looking for famous faces saw several in Las Vegas. Actress, author, and entrepreneur Suzanne Somers gave the opening-day keynote address. Six-time Grammy award winner Toni Braxton appeared at the booth of watch brand Von Dutch . Mrs. America and Mrs. World were at Le Vian 's Red Carpet Fashion Show. Mike Bibby , of the Sacramento Kings , and Mageina Tovah , a star of the Spiderman movies, could be seen at luxury watch brand D.Atlantis 's booth. And screen legend Elizabeth Taylor put in a brief appearance at the House of Taylor salon at LUXURY by JCK, supporting her self-designed, eponymous jewelry collection.
BEST FAUX-CELEBRITY SPOTTING
" Richard Gere ," " Angelina Jolie ," " Paris Hilton ," and " Johnny Depp " all were on hand (sort of) one afternoon to greet visitors at the Egana-Goldpfeil watch stand. The celebrities were actually impersonators who so resembled their counterparts in looks, dress, and mannerisms that throngs of astonished passersby stopped, gawked, and asked for photographs and autographs.
BEST REASONS TO START COLLECTING
Limited editions of timepieces have become an active category among aficionados who love to collect them. Among the many on display at The JCK Show: handcrafted and signed Hardcore Watch Co. 's Artistry in Time collection, by designer and craftsman Steve Soffa , have sculpted dials and come with a matching painting by the artist; D.Atlantis 's Cliento series of diamond and ruby skeleton timepieces have interchangeable bezels.
BEST TOURBILLON WATCH THAT DOUBLES AS A DESK CLOCK
Bell & Ross 's square Instrument BR01 Tourbillon is the hands-down winner. (It's the only tourbillon watch that doubles as desk clock.)
MOST EXPENSIVE PIECE OF CLOTHING
Dalumi Group brought its $1.3 million diamond-studded top to the show. Created by world-renowned fashion designer Gianfranco Ferré in a joint effort with the diamond company, the outfit was introduced during Milan Fashion Week , as part of Ferré's runway show and was on display in Basel, Switzerland. Yuval Kemp , Dalumi marketing and business development manager, told JCK the top will soon be placed for auction. With Ferré's untimely death just weeks after the show, the top should gain even more value above its already stratospheric price tag.
BEST USE OF RECYCLABLE PRODUCTS IN JEWELRY DESIGN
The Technonature collection of amber jewelry from Polish company Ambermoda consists of microprocessor boards from computers. Pieces of amber replace the processors, and the pieces as a whole resemble satellite imagery of large metropolitan areas. Mariusz Gliwinski , co-owner of the family firm, designed the collection after his daughter's laptop broke. "Down there, the people are in motion--just like the tiny electrons on a computer's mainboard," he said. "The nature and civilization constantly overlap, inspiring each other."
BEST USE OF FIBER-OPTIC LIGHTING
The fiber-optic lighting in showcases from Genius POF Industries Ltd. , a Hong Kong company with a U.S. office in Solon, Ohio, producesno heat and is more efficient than other types of lighting. The cool white color (more than 4,000 Kelvin) can be adjusted for brightness, and the spotlights are flexible enough to use in a number of positions. The company sells custom-designed showcases in a variety of wood, metal, and laminate styles, but the lighting also can be used in those built by other companies.
BEST CHARITABLE PARTY
The Green Initiative Celebration , held at the Venetian 's V Bar, touted the Diamond Empowerment Fund , an international nonprofit founded by Russell Simmons , head of Simmons Jewelry Co. , and other members of the jewelry industry. It raises money "to support education initiatives that develop and empower people in African nations where diamonds are a natural resource," according to a DEF statement. The Green Initiative designates 25 percent of proceeds from a line of African-mined malachite jewelry to DEF. A malachite and rough diamond bracelet, given to party guests, retails for $125, and half of proceeds from its sales also go to DEF. One industry notable said of Simmons, who attended the party, "Can you think of anyone else in this industry who attracts this kind of attention?" Not really.
BEST GIVING RECORD
Since 1999, Jewelers for Children has given a whopping $28,765,000 to charities benefiting sick or needy children. But it deserves special recognition for its minuscule administrative overhead: 92 percent of every dollar raised goes to charity, a figure practically unheard-of in the nonprofit world. Says JFC executive director David Rocha, "We work hard at keeping it low. Since we don't actually administer programs, we give the money away. According to the IRS, over 75 percent is considered good, so I guess we're doing OK."
BEST NEW LOOK IN MEN'S JEWELRY
The Vertebrae collection is inspired by--you guessed it--bones. Not only human bones but also snake vertebrae made into jewelry by street vendors in West Africa. Jewelry designer Timothy Meier caught sight of the latter during a trip and fabricated oxidized sterling and stainless-steel versions when he returned home. Pieces from the Vertebrae collection are massive, masculine, and hard not to notice.
BEST NEW TRADEMARK
The World Federation of Diamond Bourses is throwing a lot of support behind its WFDB Mark, which will stand as a sign of assurance to retailers (and possibly consumers) that the seller abides by the World Federation's Code of Principles. The mark takes its place beside De Beers ' Forevermark and BHP 's CanadaMark , but WFDB president Ernie Blom notes that, while other companies can try to enforce their "Best Practice Principles," WFDB has not only an established ethics code but also a system that enforces those ethics.
BEST EFFORTS TO JOIN THE PARTY
We're used to synthetic diamonds making a bigger splash in the consumer media than in the jewelry industry. But at this year's JCK Show, Gemesis , the Florida-based company that manufactures fancy-colored lab-grown stones, was, if not high profile, still a presence. Several vendors exhibited their stones, and Gemesis executives--accompanied by De Beers veteran Joan Parker --threw a party and attended numerous events and seminars. A week later, Gemesis announced that Larry Pollock , a former CEO of Zale and veteran of both Karten's Jewelers and J.B. Robinson Jewelers , was joining its board of directors. It was a classy and welcome sign that Gemesis doesn't see itself as opposed to the jewelry industry, but as part of it.
BEST LOGIC FOR MAKING A SALE
Couples willingly shell out thousands of dollars for wedding invitations, party favors, food, flowers, and other short-lived elements of the big day, but shop for bargains on the most long-lasting symbol of their commitment: their wedding rings. While hoping to build sales in its own category, Platinum Guild International 's " Take Back the Wedding " initiative helps jewelers increase their share of wedding dollars. And the free morning coffee and bagels in the Platinum Pavilion were a great enticement to sit and watch the "Take Back" video.
BEST USE OF WEB-VIDEO TECHNOLOGY
EyeOnJewels Corp. 's video-based e-commerce platform allows jewelers to make live, private video presentations for clients from their home, office, or anywhere in the world--and then complete the transaction online. In addition, the company provides links to the store Web site, e-commerce capabilities that can be integrated into a store's existing Web site, and online marketing capabilities. The cameras (users need a Web camera) and the Web-based software also can be used for 24-hour store surveillance.
BEST NEW WAY TO FIGHT BLUE NILE
GemFind.net has started a new business-to-consumer Web site ( www.gemfind.com ). The site gives consumers a choice of making diamond purchases online or going to the nearest jeweler in the GemFind network to purchase diamonds. Either way, the jeweler gets credit for the sale and shares in the profit--20 percent net profit--according to Louis Valentine of the Laguna Niguel, Calif.-based company, "without ever seeing that customer."
BEST WORLD PREMIERE
Luxury jewelry- and watchmaker Harry Winston got into the Las Vegas spirit, launching its limited edition Exotic Birds collection of watches with painted enamel dials. The launch took place at the invitation-only Swiss Watch by JCK , with a cocktail reception in a suite that was swathed in pink flamingo feathers, pink lighting, and even boasted a room-size golden cage, with two showgirls wearing pink flamingo feathers from top to toe.
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Copyright Reed Business Information, a division of Reed Elsevier, Inc. Aug 2007
Oldest are the Cochin Jews, who arrived at the Indian subcontinent some 2,500 years ago and settled down in Cochin, in the southwestern region of Kerala.
A New Facet of Diamond Industry: Indians
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Abstract
Shifts in influence seldom take place without a struggle and in Antwerp's diamond industry Jews are changing the way they operate to hang on to their business. In the retail sector, secular Jews are breaking ranks with the Hasidim by keeping their businesses open on the Sabbath to avoid being undercut by Indian competitors. Many Jews, who used to buy and sell diamonds on the trading floor of Antwerp's imposing diamond market, the Beurs voor Diamanthandel, now prefer to meet clients in the privacy of their offices -- a common practice of Indian dealers -- to keep other traders from poaching their business. Some also have moved their cutting and polishing factories from Belgium to low-cost centers such as Thailand and China.
Indian dealers, meanwhile, are demanding greater representation in the Antwerp diamond world to mirror their economic might. They want a greater presence on Antwerp's high diamond council, the powerful body that regulates Antwerp's diamond industry. In February, the first two Indians were elected to the council's 20-member board of directors, but some Indians say it isn't enough: "We make up the bulk of Antwerp's diamond trade and yet have no voice on the most important bodies in town," fumes Bharat Shah, president of Diampex Diamonds. Peter Meeus, the high diamond council's chairman, says he is working hard to change the institutional imbalance.
In Antwerp, Jews and Indians have come to be so embedded in each other's lives that many of the Indian dealers speak Hebrew and Yiddish. Most traditional Indian weddings have a special kosher section. After a devastating earthquake in the Indian state of Gujarat in 2001, Jewish diamond traders raised thousands of dollars for humanitarian aid. A few years ago, there was even a marriage between an Indian girl and a Jewish boy -- though such links are rare.
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Antwerp, Belgium -- IN WHAT WAS ONCE a predominantly Jewish neighborhood near Antwerp's central station, young Indians in Armani suits haggle with Hasidic diamond buyers in long black coats, side curls and yarmulkes. Hoveniersstraat, a street once celebrated for its kosher restaurants, now offers the best curry in town.
The orthodox European Jews who established the world's most famous diamond district are being supplanted by Indians -- who, among other things, aren't required by their religion to close their businesses from sundown Friday to sundown Saturday.
"Many of the Hasidim have failed to keep up with globalization," says Ramesh Mehta, a diamond trader and one of the pioneers of Antwerp's Indian diamond community. He has helped bring over 50 diamond-trading Indian families, mostly from the northern Indian state of Gujarat, to Belgium since the early 1990s.
Among the world's most successful entrepreneurs, Indian diamond traders are so adept that many are challenging Jewish dealers, even in Tel Aviv. About 80% of all polished diamonds sold world-wide now pass through Indian hands.
In Antwerp, Indians account for about 65% of the port city's $26 billion-a-year in diamond revenues, up from about 25% nearly 20 years ago. During that period, the portion of Jewish trade has fallen to about 25% from 70%, according to Jewish and Indian experts on the local diamond trade.
The new economic power of the Indian diamantaires (as Antwerp diamond traders are called) has spilled over to the U.S. diamond market. After gaining a foothold in Antwerp, many of the Indian traders have expanded their businesses globally, to include California and New York.
Because the Indians have lower costs than competitors, they have improved profit margins without having to raise prices. Those cost savings get passed on to consumers from Bombay to New York's famous diamond district where Indian wholesalers and retailers are experiencing a boom. "We Indians love America because of its entrepreneurial spirit that prizes success over ethnicity," Mr. Mehta says.
Shifts in influence seldom take place without a struggle and in Antwerp's diamond industry Jews are changing the way they operate to hang on to their business. In the retail sector, secular Jews are breaking ranks with the Hasidim by keeping their businesses open on the Sabbath to avoid being undercut by Indian competitors. Many Jews, who used to buy and sell diamonds on the trading floor of Antwerp's imposing diamond market, the Beurs voor Diamanthandel, now prefer to meet clients in the privacy of their offices -- a common practice of Indian dealers -- to keep other traders from poaching their business. Some also have moved their cutting and polishing factories from Belgium to low-cost centers such as Thailand and China.
Indian dealers, meanwhile, are demanding greater representation in the Antwerp diamond world to mirror their economic might. They want a greater presence on Antwerp's high diamond council, the powerful body that regulates Antwerp's diamond industry. In February, the first two Indians were elected to the council's 20-member board of directors, but some Indians say it isn't enough: "We make up the bulk of Antwerp's diamond trade and yet have no voice on the most important bodies in town," fumes Bharat Shah, president of Diampex Diamonds. Peter Meeus, the high diamond council's chairman, says he is working hard to change the institutional imbalance.
The stakes are huge. Antwerp, a city of 500,000 people, is the most important diamond trading center in the world. About 90% of the world's uncut diamonds and half of its polished diamonds are sold here each year. The city, which even has a trolley stop called Diamant, is home to 1,500 retail and wholesale diamond companies and four diamond exchanges. One of the oldest, the Beurs, was founded by Jews in 1904.
The Jewish diamond trade in Antwerp goes back to the 15th century. Jews expelled from Spain and Portugal settled in what is now Belgium. Today, the diamond district has more than 25 synagogues and several Jewish schools. Large groups of Hasidim assemble on Hoveniersstraat and talk into their cellphones, giving the neighborhood the atmosphere of a modern-day shtetl -- a traditional Eastern European village where Jews lived in the 19th century.
The Indian diamond traders, who began arriving in the 1970s from Palanpur, in Gujarat state, are followers of Jainism, an Indian religion emphasizing nonviolence, vegetarianism and respect for all life. After nearly 30 years in Antwerp, the Indians are building their first Jain temple, another sign of their increasing sense of confidence.
Mr. Mehta says Jains, like Jews, have a cultural affinity for the diamond business: They value kinship and cross-border networking and pursue their work without calling attention to themselves. Most Jain businesses are operated by families -- many sharing the surnames Mehta, Jhavari and Shah -- that span the globe.
Indians like Mr. Shah had a commercial edge over the Jews because, until recently, the Jews polished and cut their diamonds locally. The Indians send their rough diamonds to India, where labor costs are about one-tenth of those in Antwerp.
In Antwerp, Jews and Indians have come to be so embedded in each other's lives that many of the Indian dealers speak Hebrew and Yiddish. Most traditional Indian weddings have a special kosher section. After a devastating earthquake in the Indian state of Gujarat in 2001, Jewish diamond traders raised thousands of dollars for humanitarian aid. A few years ago, there was even a marriage between an Indian girl and a Jewish boy -- though such links are rare.
Still, the shifting balance of power is so pronounced that today many religious Jews work for Indians as diamond brokers. Some Jews wonder if such changes signal the beginning of the end of Antwerp's Jewish diamond district. In the past few years hundreds of Jews have abandoned the trade altogether.
Mr. Mehta says the Indians are philosophical about their success -- in part because of their belief in the notion of karma, the idea that destiny is determined by one's actions in a former life. "If we do badly in business, we blame it on bad karma," Mr. Mehta says. "Bad karma is almost impossible to break -- just like a diamond."
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Copyright Dow Jones & Company Inc May 27, 2003
Then there are the Baghdadi Jews, who migrated to the city Mumbai from Iraq, Iran, Afghanistan, and neighboring countries about 250 years ago.
Later waves of exiles joined them from Palestine, after the Muslim conquest of Persia and after expulsion of Jews from Spain.
Traditionally the Cochin Jews spoke Judeo-Malayalam, which is variably regarded as a separate language or a dialect of Malayalam.
This is particularly true of mixed Jewish languages: just as the Cochin Jews regard Judeo-Malayalam to be a distinct language, so too the Mountain Jews of the Caucasus consider Judeo-Tat to be a different language from the Muslim variety of Tat.
The Cochin Jews are scrupulously observant of Judaism in their private and public lives.
Today, some 8,000 Cochin Jews reside in Israel, whereas only 53 still live in Kerala.
Their oral history contained stories of having arrived from outside India, but the specific place of origin was not mentioned, and they did not call themselves Jews.
These observances were recognized by Christian missionaries and other Jews around the 18th century when the name Bene Israel was bestowed on them.
A much more recent Jewish group in India is the so-called Baghdadi Jews.
Unlike the Cochin Jews and Bene Israel, the Baghdadi Jews identified themselves with the British Raj rather than with Indian society.
Nor did the Baghdadi Jews mix with other Jewish communities; rather they built schools, synagogues, hospitals, and cemeteries to service only members of their own community.
After the formation of the State of Israel, most Baghdadi Jews emigrated to the new country.
In addition to the Bnei Menashe, Shavei Israel has worked with the Bnai Anousim of Spain, Portugal and South America, the Subbotnik Jews of Russia, and the "Hidden Jews" of Poland from the time of the Holocaust.
Shavei Israel remains a highly controversial organization in Israel, in part because they settle many of those "Lost but newly found Jews" in settlements outside the Green Line, with the goal of boosting the Jewish population in the West Bank.
