Illegal trade of conflict diamonds continue despite EU ban in Zimbabwe

Conflict diamonds
[Image courtesy - CNBC.com]

The origin of mined diamonds has long been a controversy. Some of these diamonds have been known to support civil wars, insurgency and warlord activities. Called as blood diamonds, conflict diamonds mining and trade resulted in slavery and child labour, dangerous working conditions, low wages and forced displacements, as first reported by Global Witness in 1998. While, measures are being taken to prevent infusion of conflict diamonds into diamond pipeline, the illegal trade of these diamonds are still prevalent in some parts of the world.

Global Witness reports illicit conflict diamonds trade

European Union (EU) had introduced sanctions against Zimbabwe in 2002. However, according to a report published by Global Witness, a link between Zimbabwe and Antwerp diamond trading hub in Belgium has been discovered, showing the violation of sanctions put by EU against Zimbabwe. The report gives a detailed coverage of the study conducted by Global Witness on Zimbabwe’s diamond sector since 2011.

There have been indications where Zimbabwe’s Marange Diamond mining companies have been linked with various external sources like Kusena Diamonds, which has been reported to carry out trade with Antwerp and Dubai; Anjin and Jinan appears to be linked with Zimbabwe’s military – Zimbabwe Defence Industry (ZDI). Global Witness thinks that Antwerp Diamond Trader Facility (ATF) and First Element Bvba have traded with Anjin on at least three occasions between December 2013 and September 2014.

According to the available government reporting, only USD 300 million in diamonds can be identified in public accounts. Whereas, according to Kimberly Process reports, Zimbabwe had officially exported over USD 2.5 billion in diamonds.

Petra Diamond’s Shipment Seized

A shipment of diamond from Petra Diamond’s Tanzanian mine Williamson Diamonds was seized at the Julius Nyerere International Airport before they were to be exported to Belgium. The diamonds were declared undervalued. According to the Tanzanian government, Williamson diamonds documented the value of these diamonds at USD 14.7 million. Whereas, the actual value of the shipment is USD 29.5 million.

After Tanzanian government confiscated the shipment, Petra Diamonds temporarily stopped the production of its Williamson Diamonds mine. As per the East Africa Community Customs Management Act 2004, Section 210(G) a consignment can be nationalised, whether imported or exported but whose value is knowingly under declared. On the basis of this act, Minister of Finance Dr Philip Mpango, threats to nationalise the shipment. However, Petra Diamonds have documents including receipts, diamond-valuation certificate and a Kimberly Process certificate stating that the shipment weighed 71,654 carats and valued at USD 14.8 million. Moreover, it says that the company has no role in valuing a gem parcel and that a government agency is responsible for that.

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