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Upsurge in Rough Diamond Smuggling in Central African Republic

08 september 2014

After suspension of its membership in the Kimberly Process (KP), the organization set up for curbing the circulation of conflict diamonds, since May 23, 2013 the Central African Republic (CAR) has not officially exported even a single diamond mined on the territory of the country. This resulted in the loss of substantial revenues to its economy.

According to Le Monde, in spite of the fact that the bulk of rough diamonds has been smuggled fr om the CAR, the country legally exported 372,000 carats of rough diamonds in 2012 for a total of about EUR45 million.

Nowdays, the Embassy of France in Bangui, the capital of the CAR, calls for lifting the sanctions. Two months after the Moslem coalition Séléka seized the power, an embargo on rough imports fr om the country was imposed to prevent the armed groups to get financing through selling the gems, but the embargo brought about a surge in rough diamond smuggling.

On June 30, the World Diamond Council in its turn threatened with sanctions to those who would violate the embargo. Kardiam, an Antwerp-based diamond company, was in particular under suspect and two weeks ago its offices were searched. 

Nowadays, the KP experts try to find out whether the CAR rough diamonds were in the ‘mixed lots’ that came to Antwerp from Dubai. According to the sources familiar with the process, one of the ways of smuggling the stones from the CAR is putting them to ‘laundry’ by mixing with rough diamonds from other sources. 

Meanwhile, according to the UN Expert Group On Sanctions, Sodiam, an Angolan state sales company, is actively buying rough from the CAR - waiting for lifting the embargo - and has already a stock exceeding 40,000 carats worth about EUR6 million.

In this connection, the market watchers ask whether these gems would be considered ‘pure’ after the embargo is lifted, and how the company is able to ‘freeze’ such a significant amount of money for an uncertain period of time.

The second major player is Badica, the bureau for purchasing rough diamonds in Central Africa, whose financial capabilities are limited but, according to some information, it keeps on buying rough from the eastern CAR mines that were earlier under the control of the Séléka militants.

According to Aurélien Llorca, the UN Expert Group coordinator, the images received via the tracking satellites confirm the resumption of work at the mines and that the Christians-rebels from the Anti-balaka movement have reset their relations with Sodiam and Badica. They are no longer willing to deal with buyers from Chad, and they are also trying to resume their trade with the Senegalese and Malians because they are short of money, says Le Monde’s well-informed source.

The CAR precious stones cross the border with the Democratic Republic of the Congo wh ere they get into the retail chains of the Lebanese, mainly Shiah. According to the information provided by the well-informed sources, due to the connivance of authorities these illegal export channels lead mainly to Dubai wh ere rough diamonds are easily provided with the KP certificates prior to their shipment to Antwerp, Tel Aviv and Mumbai.  

Llorca believes that in this situation the main task of the UN peacemakers, whose deployment will be completed in the CAR before November 15, will be the restoring of control over the diamond industry.

For years back, the CAR had been a ‘gemocracy’ and all of its governors, starting from Emperor Bokassa, tried to take control over the diamond trade. 

The other wealth of the CAR, apart from diamonds, are the gold fields; gold exports are continued and the Anti-balaka rebels, in their turn, are already making efforts to take control over the Ndassima gold mine in the Bambari region. 

 Аlex Shishlo, Editor in Chief of the European Bureau, Rough&Polished