WDC Warns Against Smuggled CAR Diamonds

RAPAPORT… The World Diamond Council (WDC) has cautioned the trade to be vigilant when buying diamonds from the Central African Republic (CAR) since most of the country’s rough is being smuggled across its borders.

The Kimberley Process (KP) certifies production from six designated areas known as “green zones,” which account for only a small portion of the country’s rough supply.

“People should know that by purchasing CAR diamonds outside the KP green zones, they’re supporting criminal gangs and unlawful activity,” WDC president Stéphane Fischler (pictured) told Rapaport News on the sidelines of the Dubai Diamond Conference last week. “The industry must take responsibility and exert due diligence to make sure that when they buy CAR rough, it is production that has been exported with a KP certificate.”

The KP in 2015 approved six green zones in the western part of CAR, from which rough diamonds can be exported. However, much of the mining takes place in the east, where the government has struggled to maintain control over rebel groups. Although the parties signed a peace agreement in February, only diamonds from the government-controlled zones meet the KP’s minimum requirements for export, the WDC said in a statement Tuesday.

The government recently lowered the export tax from 10% to 4% to incentivize miners to sell their diamonds through official means, Fischler reported. Still, about 90% of the country’s annual production of around 330,000 carats is smuggled out, he estimated.

The KP monitoring team, chaired by the US, acts as one of few stabilizing factors in a country that has long suffered the devastation of civil conflict and these continuing efforts are crucial to bringing peace and stability to the region, Fischler continued.

“To ensure stability, the country needs to build its income through official channels,” he explained. “The industry must play its part. If there’s any doubt about where the diamonds come from, the trade must abstain.”