U.S. Reacts to Angola Sanctions Violations

150 150 Rapaport News

By Daniel Parker

Diamond Correspondent

The debate centering on methods of controlling the flow of diamonds from Angola’s rebel faction, the National Union for the Total Independence of Angola (UNITA), broke new ground last month. A United Nations investigative report, six months in the making by a special committee under the direction of Canadian Ambassador Robert Fowler, has both shed new light on the situation and cast serious allegations against a number of African political leaders and European diamond companies.

The debate focuses on UNITA’s ability to fund its war efforts against the recognized government of Angola by selling diamonds on the world market despite UN sanctions banning business relations with the rebel group. Among those the report implicates as having defied the sanctions and allowed business activities with UNITA to continue are Togolese President Gnassingbe Evadema and Burkina Faso’s President Blaise Compaore, as well as government officials in Gabon, Rwanda, South Africa, Congo, Republic of Congo, Ivory Coast, and businesses in Bulgaria.

It should be noted that almost every country implicated in the report has denied knowledge of involvement.

U.S. Concerns

While these country’s particular violations include providing fuel and arms to the militant faction, activities that seem far removed from the wholesale diamond industry in the United States, the situation does raise issues that American manufacturers and wholesalers are concerned about.

For example, the report also implicated the Antwerp diamond center as having “extremely lax controls and regulations” related to the importation of rough diamonds. A week prior to the release of the report, Belgium instituted new measures to tighten controls of its market, but the report and charges by human rights organization, Global Witness, intimate that thousands of stones that have gone through the traditional routes of the Antwerp market in recent years have originated from mines controlled by UNITA, and therefore have funded the continuing rebel war efforts in Angola. It can be assumed that more than a few of these stones have ended up on the fingers of American brides.

The industry around the world recognizes the possibility of a backlash against the diamond product if consumers feel that their engagement rings are funding bloody wars in Africa.

But just what can be done to make sure UNITA is not funding its war efforts with the dollars of innocent grooms world-wide? Eli Haas, president of the New York Diamond Dealers Club (DDC), vice president of the World Federation of Diamond Bourses (WFDB), and principal of ENH International Inc., believes the situation, though clearly difficult, has improved with certain industry controls and the media attention that the crisis has received of late.

Besides sponsoring the resolution that was adopted by WFDB at its annual conference in July 1999, the DDC has also published a resolution which prohibits its members from dealing in diamonds from UNITA.

“It must be said that there is no way to determine, by checking a diamond, where it came from,” said Haas. “There are 850 million individual diamonds sold every year, most of which are sold in large parcels at some point and include very small stones. It would be impossible to have a certificate of origin to go along with every single diamond. I admit it sounds like a good idea, but its implementation is not possible. It is an unfortunate fact of life that the entire process of issuing certificates of origin, as Fowler’s report stated, is extremely ‘porous’ and undependable.”

Another New York manufacturer who did not wish to be named, said “the fact that determining country of origins is nearly impossible is crucial to this issue. And diamonds are small, making them fairly easy to smuggle. As long as there is someone willing to smuggle stones across borders, these people will continue to make money. It is a very dangerous situation.”


The way to ensure that money is not unwittingly channeled to UNITA, according to Haas, is something he has suggested to the U.S. State Department and the National Security Council on separate occasions. “We must concentrate our efforts, both government and industry, on those relatively few individual firms that do business with UNITA — I believe that the pressure put on these companies has already resulted in a very significant reduction of approximately 80 percent compared to two to four years ago. Today I believe that very few legitimate, refutable firms are doing business with UNITA because they know the industry won’t tolerate it.”

Ambassador Fowler also said the new vigilance on the sanctions was already beginning to have an effect. The reports noted that beginning last summer, UNITA was finding it harder to locate suppliers who would risk being exposed.

In further action by the international diamond community, two initiatives were announced at last month’s International Rough Diamond Conference in Tel Aviv. De Beers’ managing director Gary Ralfe announced that the Central Selling Organization (CSO) would sever ties with any sightholders found to be dealing in “conflict” rough. Representatives of several banks that finance the industry, including ABN AMRO and Israel Discount Bank, also said they would cease relations with such companies.

But despite the strides made to curtail the industry’s involvement, wars in Angola and Sierra Leone continue. Just last month, 500 UNITA gunmen charged into a remote mining town in Angola and killed 30 diamond prospectors, according to a report from Angolan state radio. It is estimated that UNITA diamond revenue over the last few years has exceeded $4 billion, and it is impossible to know how much smuggling is still done today to continue to fund UNITA efforts.

Haas and others concede that there is always someone who is willing to contravene the law, and that 100 percent security against leakage of UNITA rough is unlikely.

Leave a Reply

Your email address will not be published.