BlueRock boosts H1 output, grade at Karevleei as loss narrows

BlueRock Diamonds has recorded a 79% increase in carats produced at Kareevlei Diamond Mine in South Africa to 8,949 carats in the six months to June 2021 compared to 4,981 carats, a year earlier.

Today

Moscow to host KP Plenary meeting on 8-12 November 2021

The Russian Federation, as the Chair of the Kimberley Process (KP) said the next KP Plenary meeting will be held in Moscow on 8-12 November 2021 in a hybrid format including online and in-person participation for those who will be able to visit...

Today

S&P revises Botswana's outlook to 'stable' as diamond sector improves – report

Ratings agency S&P has revised Botswana’s outlook to 'stable' from 'negative' due to an economic recovery buoyed by a strong diamond sector. "We expect Botswana's diamond export-dependent economy will rebound by 8.5% in real...

Yesterday

India’s cut and polished diamond export increases by 68.64%; rough imports up 142.62% in August

India’s export of cut and polished diamonds at $ 2051.88 mn in the month of August 2021 shows a growth of 68.64 per cent as compared to $ 1216.70 mn for the month of August 2020, according to data available in gjepc.org.

Yesterday

Global jewellery industry calls for immediate action on gender equality

The global jewellery industry has called for collective and immediate action on gender equality, a crucial building block in developing a strong and responsible supply chain that contributes to achieving UN Sustainable Development Goal 5.

Yesterday

Money laundering and terrorist financing through trade in diamonds - FATF

04 february 2014

The Financial Action Task Force’s (FATF) latest typologies report has concluded that the diamonds trade is subject to considerable money laundering and terrorist financing vulnerabilities and risks. The FATF is an inter-governmental body established in 1989 by the ministers of its member jurisdictions. It currently comprises of 34 member jurisdictions and two regional organizations, representing most major financial centres in all parts of the world.

The FATF and the Egmont Group of Financial Intelligence Units collaborated on a typologies research project to identify the money laundering and terrorist financing (ML/TF) vulnerabilities and risks of the “diamond pipeline”, which covers all sectors in the diamond trade: production, rough diamond sale, cutting and polishing, jewellery manufacturing and jewellery retailers.

Based on research conducted, analysis of case studies collected by the project team and after consultation with the private sector, the report concludes that the diamonds trade is subject to considerable vulnerabilities and risks. The closed and opaque nature of the diamonds markets and the high value of diamonds combined with a lack of expertise in this area on the part of the authorities have left this industry susceptible to abuse by criminals.

While taking note that the diamonds trade has existed for centuries and had developed a unique culture and trade practices, which have their own characteristics and variations across countries and continents, the report however indicated the many changes in the international diamond trade in the last few decades like, De Beers losing monopoly; entrance of  smaller diamond dealers; diverse distribution channels; new trade centres; shift of cutting and polishing from Belgium, Israel and US to mainly India and China; emergence of smaller cutting centres; cash transactions diminishing; and Internet becoming a diamonds trading platform to name a few.

These significant changes in the "diamonds pipeline" structure and processes raised the question of whether the risks and vulnerabilities remain the same and whether current anti-money laundering / countering the financing of terrorism (AML/CFT) standards and national regulations are sufficient to mitigate the different ML/TF risks and vulnerabilities identified in the research.

The case studies included in the report demonstrate the creative methods that criminals have used to exploit diamonds trade for the purpose of money laundering and terrorist financing. This report aims to help build awareness with the regulatory, enforcement and customs authorities as well as reporting entities about risks and vulnerabilities of the diamonds trade, and how to mitigate them.

Some of the risks and vulnerabilities of the diamonds trade identified in this report are the nature of trade which is transnational and complex, thus convenient for ML/TF transactions that are mostly of international and multi-jurisdictional nature; the use of diamonds as currency is rampant as diamonds are difficult to trace and can provide anonymity in transactions; and Trade Based Money Laundering (TBML)  which is widely used as the specific characteristics of diamonds as a commodity as well as the significant proportion of transactions related to international trade, makes the diamonds trade vulnerable to the different laundering techniques of TBML. In addition, the high amounts in diamond can reach tens of millions to billions of US dollars. This results in laundering of very large amounts of money.

According to the report, the level of awareness about ML/TF schemes through the trade in diamonds, by law enforcement and AML/CFT authorities as well as financial intelligence units (FIUs) is unfortunately limited.

Aruna Gaitonde, Rough&Polished, Mumbai