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London Bourse 'Well Placed' to Cope With Brexit

Jul 4, 2016 9:50 AM   By Rapaport News
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RAPAPORT... The London Diamond Bourse (LDB) said it is in a strong position to face the post-Brexit storm because of its access to a bonded warehouse enabling duty-free trading but warned of currency headwinds.

A bonded warehouse is a facility overseen by customs authorities where imports that are subject to customs duty are stored duty-free before being re-exported. 

The U.K. capital’s diamond industry is hedged against the outcome of discussions over the country’s future relationship with the European Union, the gem exchange pointed out in a statement to Rapaport News. The British electorate voted to leave the bloc in a referendum on June 23.

“LDB is really well placed to defend its members as the future negotiations of the European Union and U.K. play out,” said Victoria McKay, the exchange’s chief operating officer. LDB members’ access to the bonded warehouse means if the EU imposes import restrictions on the U.K., they will be able to use the facility further.

“If we remain part of the single market, we will still be able to offer bonded warehouse facilities to those members wishing to purchase outside the EU,” McKay added.

However, the dive in the pound’s value – falling about 12 percent against the dollar since the referendum results – makes life harder for London traders because they buy in the greenback and sell in sterling.

“The major problem for our members is the uncertainty in the currency,” McKay said.
Tags: Bonded Warehouses, bourses, Brexit, EU, European Union, london, London Diamond Bourse, Rapaport News, trade, u.k., Victoria McKay
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