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The Illicit Diamond Trade, Civil Conflicts, and Terrorism in Africa



Diamonds have long been viewed as a highly valued precious stone. Although a diamond is a symbol of love for those who can afford it, it has turned out to be the rebel's best friend in war-torn West Africa. The international lust for diamonds propelled the growth of a global market over the past three decades, with trade being conducted both legally and illegally. In the 1990s, the illegal diamond trade financed bloody wars in several African countries. Rebel armies, terrorists, warlords, and smugglers have exploited the weaknesses in the regulations governing the diamond trade and in the process reduced organized states into chaos. More than 4 million people have been killed in Angola, the Democratic Republic of Congo, Sierra Leone, and Liberia since 1992. In this article we examine the nexus among the diamond trade, armed conflicts, and terrorism. We further explore the nature of the diamond markets, the various actors, and the impact of illicit diamond trade on individual countries and the global security system.
The Illicit Diamond Trade, Civil Confl icts,
and Terrorism in Africa
J. Anyu Ndumbe and Babalola Cole
Diamonds have long been viewed as a highly valued precious stone. Although
a diamond is a symbol of love for those who can afford it, it has turned out
to be the rebel’s best friend in war-torn West Africa. The international lust
for diamonds propelled the growth of a global market over the past three
decades, with trade being conducted both legally and illegally. In the 1990s,
the illegal diamond trade fi nanced bloody wars in several African countries.
Rebel armies, terrorists, warlords, and smugglers have exploited the weak-
nesses in the regulations governing the diamond trade and in the process
reduced organized states into chaos. More than 4 million people have been
killed in Angola, the Democratic Republic of Congo, Sierra Leone, and Libe-
ria since 1992.1 In this article we examine the nexus among the diamond
trade, armed confl icts, and terrorism. We further explore the nature of the
diamond markets, the various actors, and the impact of illicit diamond trade
on individual countries and the global security system.
A complex web of illegal practices has plagued the diamond trade in
Africa, starting in 1866 when these precious stones were rst discovered
in South Africa. The unprecedented and seemingly inexhaustible supply of
diamonds attracted many investors ready and able to exploit it, resulting in a
1. Global Witness, Broken Vows: Exposing the “Loupe” Holes in the Diamond Industry’s Effort to
Prevent the Trade in Confl ict Diamonds (Washington, DC: Global Witness, 2004), 7.
J. Anyu Ndumbe is assistant editor of Mediterranean Quarterly and associate professor of public
administration/policy at the University of the District of Columbia. Babalola Cole is associate pro-
fessor of government and international relations at Howard University.
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 53
massive infl ux of diamonds to Europe. It is against this backdrop that Cecil
Rhodes decided to syndicate diamond mines in South Africa with the objec-
tive of creating a balance between demand and supply, and the coalition of
the Kimberly and De Beers companies transformed the industry from one
characterized by uncertainty to one based on speculation. Soon thereafter,
the German discovery of diamonds in German Southwest Africa (Namibia)
greatly undermined the objective of the syndicate. In spite of these develop-
ments there was an infl ux of South Africa’s diamonds to Antwerp, Belgium,
making it one of the world’s leading diamond centers.2
By the dawn of the twentieth century, De Beers controlled about 90 per-
cent of the international diamond trade. The Great Depression in the 1930s
infl icted serious fi nancial strain on the diamond industry, but this did not
deter De Beers from continuing to pursue a grand design of building a global
diamond empire. In response to the falling prices of diamonds caused by the
Depression, the company initiated a scheme of purchasing virtually all the
diamond mines in the world, thus bolstering its fortunes through monopo-
listic practices. The De Beers trading company—Central Selling Organiza-
tion—controlled global diamond output until recently.
The diamond trade in Africa has been a mixed blessing. A diamond is a
highly valued mineral in many areas around the world, but it has also fueled
civil confl icts in Africa. This is nowhere more true than in Angola, Sierra
Leone, the Democratic Republic of the Congo, and Liberia.
Diamonds have played an important role in the civil war in Angola. This
bloody confl ict began in 1956 with the struggle against Portuguese colonial-
ism and the formation of the Popular Movement for the Liberation of Angola
(MPLA) and the National Front for the Liberation of Angola (FNLA) in 1961.
A third group, UNITA, soon began fi ghting the Portuguese, the MPLA, and
the FNLA. Soon the armed struggle acquired ethnic and regional character-
istics as well as an ideological split. UNITA disliked the fact that the MPLA
was dominated by mestico (mixed race) intellectuals from coastal cities who
2. Richard Cowen, “Diamonds, Gold, and South Africa,” at See also
“Diamond History,” at
54 Mediterranean Quarterly: Spring 2005
opposed the FNLA because of the support it received from the United States
and its control by northerners. UNITA followers believed they represented
“real Africans” from the central highlands of the country and therefore could
lay legitimate claims to preeminence.
In 1975, Portugal ended its colonial rule, leaving the MPLA in charge
of Luanda, the capital, and Angola’s independence was immediately fol-
lowed by serious ideological differences that culminated in a civil war. The
Cold War environment created strange bedfellows. The United States and
South Africa were determined to destabilize Angola and overthrow its Soviet-
backed regime. It was for this reason that they provided support for UNI-
TA’s decision to fi ght the MPLA government, which was supported by Cuban
troops. Although the US assistance to UNITA was a strategic decision that
made sense at the time, it was at the same time a blunder, because UNITA
mistook it as a tacit approval to indulge in criminal behavior, including the
illicit diamond trade and money laundering as its primary means to fi nance
war efforts.
The end of the Cold War altered the dynamics between the two warring
factions. There was increased pressure on them to end the civil war and
nd a peaceful resolution to the confl ict. In 1994, a peace agreement was
reached, but it lasted only four years. The United Nations Security Council
reacted to the collapse of the agreement by imposing an embargo on UNI-
TA’s diamond trade through adoption of resolution 1173. It is important to
note that for decades UNITA had been involved in illicit trade in diamonds
to fi nance its large-scale conventional wars. UNITA violated the sanctions by
increasing its involvement in the illicit trade in diamonds with the complicity
of the international community. The proceeds were used to fi nance its war
against the government of Angola because it was determined to overthrow
the MPLA. It would be only a matter of time before shady traders and greedy
speculators would join faces with terrorists.
Belgian, African, and Western intelligence reported a link between sev-
eral Lebanese diamond traders and Hezbollah and noted that these diamond
traders bought diamonds from UNITA in violation of Security Council sanc-
tions.3 The leader of UNITA, Jonas Savimbi, was in control of diamond min-
3. Ibid.
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 55
ing, trading, and fi nancing operations. It is therefore not surprising that his
death signifi ed the removal of the single main anchor of UNITAs illicit dia-
mond trade and would result in the unraveling of the complex and corrupt
arrangements that surrounded the diamond operation in Angola. For the fi rst
time since independence in 1975, Angola saw prospects for peace.
Savimbi’s death did not completely end UNITA’s involvement in the illicit
diamond trade. Rebel soldiers had stockpiled huge reserves of diamonds
that they had to sell in order to meet UNITA’s immediate fi nancial obliga-
tions. UNITA took the absence of any meaningful international mechanism
to enforce the sanctions regime as a de facto license to continue its smug-
gling operation. In this respect, the lack of accountability and transparency
within the diamond industry made it easy for UNITA to sell its diamonds
on the international market, where the difference between legal and illegal
products was diffi cult to detect. Between 1992 and 2001 UNITA operated
the largest and most organized illegal diamond traffi cking operation in the
world. For example, between 1992 and 1997 it earned $3.7 billion from the
sale of illicit diamonds, with the proceeds used to fi nance the war against
the MLPA.4 Two neighbors, the Democratic Republic of the Congo (DRC)
and Zambia, became the main conduit for diamond exports and arms pur-
Evidence pointing to Zambias role as an important route used by UNITA
to smuggle diamonds to international markets is overwhelming. The former
UNITA minister of natural resources described Zambia as a crucial route for
Savimbi’s diamond sales. The Mwinilunga region was used by smugglers to
transport the so-called blood diamonds. Other cross-border sites included
the Mongu and Lusaka regions. These were critical, because they provided
an informal market for the smuggled diamonds from Angola.6 Additionally,
4. “Rough Trade in Diamonds,OECD Observer, at
trade_in _diamonds.htm. See also Jayati Ghosh, “Africa’s Bloody Diamond Trade,” Frontline: India’s
National Magazine, April 2004, 10–23, at www.fl 2108/stories/20040423003304700
5. Global Witness, For a Few Dollars More: How al Qaeda Moved into the Diamond Trade (Wash-
ington, DC: Global Witness, 2003), 21.
6. United Nations Security Council, “Report of the Monitoring Mechanism on Sanctions against
UNITA Pursuant to Paragraph 6 of Resolution 1374 of 19 October 2001,” S/2002/XXXX, New
York, UN, April 2002, 15.
56 Mediterranean Quarterly: Spring 2005
UNITA was alleged to be carrying out illegal transactions with De Beers.
For example, a security company called British Mine Police working with
De Beers used helicopter gunships to protect UNITA-controlled diamond
By the end of 2002 and early 2003, publicity surrounding the efforts by
international nongovernmental organizations (NGOs), including Global Wit-
ness, exposed the role of diamonds in funding civil wars and threatened the
destruction of a diamond industry that was previously shrouded in secrecy.
This compelled diamond producers and traders to explore new ways to con-
duct business in a transparent manner with the objective of eliminating the
trade in “confl ict diamonds.”8
By 2001 Angola also began to look for ways to address the problem of
trade in confl ict diamonds by implementing the certifi cate-of-origin label
on most of its diamonds. However, the full extent of the problem remains
an estimate because of the absence of statistical data to enable compara-
tive studies that would pinpoint sources of the diamond trade. Nevertheless,
the Security Council embargo is still in place and the government is mak-
ing some progress in its attempt to control both the small-scale mining and
the illicit trading circuits. The government of Angola has put in place a new
security system, the Diamond Inspection and Security Corps, which is a joint
venture between the Stanwest Limited, Endiama, and the Ministry of Geol-
ogy and Mines, SINFO (intelligence service), the Ministries of Interior and
Finance as well as the National Directorate of Criminal Investigation. This
system will monitor the production and sale of diamonds, including com-
pliance with the certifi cation process, the identifi cation and interception of
smuggling operations and the registration and licensing of diamond buyers.
Additionally, Angola’s National Directorate of Criminal Investigation cre-
ated a specialized unit to control the illicit diamond trade.9 These efforts,
coupled with the pressure from the international community, might redress
the problems plaguing the industry if there are similar sustained efforts on
the part of all parties involved in this trade.
7. Janine Ferrell-Roberts, “Glitter and Greed: The Diamond Investigation, at
8. Global Witness, Broken Vows, 8.
9. UN Security Council, 19.
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 57
Democratic Republic of Congo
During the Cold War era, the DRC was a critical smuggling route for UNITAS
diamonds and a source of con ict diamonds, as well. One of the most impor-
tant diamond-producing regions in the DRC is in the Equateur province,
where high-value stones were held by the rebel movements (RCD-Goma and
RCD-Kisangani-MLC) and their Rwandan and Ugandan allies. More than 75
percent of all the diamonds produced in the DRC before 2000 were smug-
gled out of the country. For example, in 1999 offi cial exports were valued at
$261,361,308 (35 percent) as compared to an estimated $490,613,333 (65
percent) smuggled.10 The smuggling operation shows a unique quality: there
is no evidence showing any “physical transit point” of a diamond through
any country, but there is a clear link between UNITA and the Congolese.
The Lusaka agreement identifi ed UNITA as one of the armed groups pres-
ent in the DRC. Diamond traders previously linked to UNITA had formed
an alliance of convenience with the rebels in the DRC. For example, Philip
Surowiez, a Belgian who was captured in Kisangani in November 1998,
had previously worked for the Cuango Mining Corporation in the Luzumba
region during the period of UNITA occupation and was licensed to do so by
the group. UNITA introduced to RCD several mining companies that were
willing to cooperate with the rebels and their allies Rwanda and Uganda.
For example, Victoria Diamond (Voktoria), a Uganda-based consortium, had
been selling diamonds to an Antwerp-based dealer since 1999 and the trade
continued through 2001. In 2000, the company was identifi ed by the Panel
of Experts on the Illegal Exploitation of Natural Resources and Other Forms
of Wealth in the Democratic Republic of Congo.11 Victoria supplied invoices
that were linked to the presidency of the DRC, despite the fact that the DRC
was embroiled in a civil war. Implicit in this were two scenarios: (1) either
the invoices were fraudulent or (2) the company acted in complicity with the
illicit diamond traders in Antwerp. This undoubtedly implicates Antwerp in
the illicit diamond trade, and the Belgian government was furnished with the
evidence of Belgian diamond traders’ involvement in illicit trade.12 Intensive
investigation ensued on several fronts. Realizing the gravity and intensity
10. I bid., 24 .
11. Ibid., 26.
12. Ibid., 27.
58 Mediterranean Quarterly: Spring 2005
of the pressure being exerted by the international community, the diamond
industry opted to resolve the problem by working with diamond-producing
and -consuming nations to enact new rules governing the diamond trade
around the globe.
Sierra Leone
The recent history of Sierra Leone, too, can be examined through the prism
of a diamond. Trade in diamonds here began in the 1930s, and it is impos-
sible to examine any signifi cant development in this country without a dia-
mond connection. By 1937, its annual mining capacity was 1 million carats
of diamonds, an amount that doubled by 1970. Between 1930 and 1998,
Sierra Leone’s offi cial mining gures show annual production at 55 million
carats of diamonds.
In 1935 the British colonial government concluded an agreement with the
De Beers mining company to grant it prospecting mining rights in Sierra
Leone for ninety-nine years. The lucrative nature of the diamond trade also
attracted smugglers. By 1956 there were reportedly about seventy thousand
illegal diamond miners in the country, a number that paved the way for smug-
gling on a large scale.13 Most of the smugglers at the time were Mandingo
and Lebanese traders. The intensity of the trade culminated in lawlessness
that forced Lebanese traders to reroute their operations through Liberia. In
1955 the British government nullifi ed the De Beers monopoly and limited
the company’s activities to two fi elds. A year later, new licensing arrange-
ments called for both buying and mining licenses be granted to indigenous
mines. These licenses could also be traded, and invariably many ended up in
the hands of Lebanese merchants whose families had been settled in Sierra
Leone for centuries.
When Siaka Stevens became prime minister, he quickly turned diamonds
and the Sierra Leone Selection Trust (SLST) into a political problem, tacitly
encouraging illegal mining. In 1971, Stevens nationalized De Beers’ opera-
tions by creating the National Diamond Mining Company, which in effect
13. “History: Pre-1990s Sierra Leone: A History Linked to Diamonds,” at
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 59
meant nationalization of the SLST. The new company operated under the
supervision of the prime minister and his trusted friend, Jamil Mohammed,
a Lebanese businessman. In 1984, the SLST sold the rest of its mining
shares to Precious Metal Mining Company, an outfi t controlled by Moham-
med. Stevens’s successor, Joseph Momoh, who not only continued with his
predecessor’s policies but entrusted Mohammed with greater control of the
government.14 This climate encouraged the illicit trade and management of
diamonds that was evident in the successive drop in Sierra Leone’s produc-
tion levels. Thus, legal exports of diamonds dropped from 2 million carats in
1970 to 595,000 in 1980 and 48,000 in 1988.15
The merger of politics and personal interest meant resources were divided
among party loyalists rather than being used for the nation as a whole. Eco-
nomic decay and ineffi ciency characterized the 1970s, 1980s, and 1990s
and eventually manifested themselves through successive coups d’état and
nally a bloody civil war.
In the early 1990s, President Momoh’s search for new investors was con-
tinued by the military regime of the National Provisional Ruling Council. De
Beers, the largest diamond dealer in the world since the 1930s, had been
relegated to the background, and the government received contract bids from
small mining fi rms, including AmCan Minerals, Diamond Works, and Rex
Diamonds. These fi rms not only were interested in mining operations but
were deeply entrenched in the internal politics of Sierra Leone. In 1995,
Diamond Works, a Canadian company with offi ces in London, had acquired
Branch Energy Limited. The latter introduced the international security
rms Executive Outcomes (EO) and Sandline to President Valentine Stras-
ser. The relationship between these fi rms suggested the existence of a quid
pro quo. For example, the chain of events prior to the Revolutionary United
Front’s (RUF’s) attempts to take control of Freetown supports the conten-
tion that a shady arrangement had been made between the government and
some of the mining companies. In 1995, when the RUF was on the verge of
14. J. Anyu Ndumbe, “ Diamonds, Ethnicity, and Power: The Case of Sierra Leone,” Mediterranean
Quarterly 12, no. 4 (2001): 90–105.
15. Ibid., 92. See also Ian Smillie, Lansana Gberie, and Ralph Hazleton, The Heart of the Matter:
Sierra Leone, Diamonds and Human Security (Ottawa: Partnership Africa-Canada, 2000), at www
60 Mediterranean Quarterly: Spring 2005
overrunning Freetown, the president’s last and only resort was to engage the
services of EO to assist in defending the country. EO forced the RUF out
of Freetown, forced it to retreat, and captured the diamond mines. Shortly
after this offensive, Branch Energy Limited secured a twenty-fi ve-year lease
on a Sierra Leone diamond concession. In addition, Rex Diamond received
concessions in Zimmi and Tongo as compensation for acquiring ammunition,
engines, and spare parts (approximately $3.8 million) for the government of
Sierra Leone.16
Political manipulation and mismanagement have been parts of Liberia’s
involvement in the illicit diamond operation since the 1950s. Liberia played
a signifi cant role in the ousting of President Momoh of Sierra Leone and the
civil war that ensued in that country. Its president, Charles Taylor, was driven
by a desire to pillage diamonds from Sierra Leone in order to fund a grand
scheme to consolidate his power in the West African region. To achieve this
goal, he helped the RUF in its efforts to topple the government in Sierra
Leone in exchange for the diamonds. From the start, Liberia played the role
of banker, trainer, and mentor to the RUF.17 At the height of the war, Liberia
provided the RUF with an outlet for illicit diamonds in return for the supply-
ing it with illegal arms. Liberia’s diamond production capacity between 1994
and 1998 was between 100,000 and 150,000 carats. Paradoxically, records
of the Hoge Raad Voor Diamant in Antwerp, Belgium, during the same
period showed that it had exported more than 31 million carats of diamonds
to Belgium, with an annual average of more than 6 million carats.18 The
logical explanation to this discrepancy between Liberia’s production capacity
and its exports is that this country was part of a complex and well-planned
network of diamond-smuggling that involved other countries.
The UN Security Council’s evidence indicates that Taylor and private busi-
nessmen, such as Ibrahim Bah (a conduit between RUF leaders and buyers
16. Smillie, Lansana, and Hazleton. See also Ndumbe, 99–100.
17. N dum b e, 9 8 .
18. Integrated Regional Information Network, Diamond-Fuelled Confl ict (New York: UN Offi ce for
the Coordination of Humanitarian Affairs, 2000).
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 61
from al Qaeda and Hezbollah)19 and Victor Bout (an arms merchant who
supplied weapons across Africa and to both the Taliban and the Northern
Alliance in Afghanistan)20 used covert sanction-busting mechanisms that
included money laundering and other international criminal activities. The
Security Council indicated that there was conclusive evidence that implicated
Taylor in arming the RUF in return for proceed from the sale of smuggled
diamonds from the RUF-controlled areas in Sierra Leone.21 The Taylor–al
Qaeda connection in Sierra Leone and Liberia illustrates the damage that
corrupt leaders and terrorists can infl ict on failed, weak states as well as the
implications for the international community.
The Global Community and Illicit Diamond Trade
Although the illicit trade in diamonds had been occurring for decades, it is
the bloody wars in Angola, Sierra Leone, and other African countries that
elevated the problem to the forefront of international discourse and action.
Additionally, the diamond industry recognized the growing danger that dia-
monds originating from war zones could pose to the industry’s integrity and
saw that this illicit trade, if left unaddressed, could undermine consumer
confi dence. These factors were instrumental in the decision of the interna-
tional community to address the issue of confl ict diamonds. The US-led inter-
national condemnation of the illicit trade in diamonds forced the diamond
industry to begin to reexamine its trading practices. Since 1999, the United
States had been involved in various initiatives designed to eliminate the
illicit trade in diamonds. The Clinton administration encouraged a partner-
ship among legitimate diamond-producing states, diamond-consuming and
-marketing nations, and the diamond industry. The administration helped tai-
lor the framework for the May 2000 conference in Kimberley, South Africa,
where the United States, Britain, Belgium, major African diamond-producing
19. Douglas Farah, “Al Qaeda Cash Tied to Diamond Trade,” Washi ng t on Post, 2 November 2001,
20. Douglas Farah and Richard Shultz, “Al Qaeda’s Growing Sanctuary,Was hin gto n P ost, 14 July
2004, A19.
21. Bram Posthumus, Sierra Leone Seeks a Way Out of the Abyss (Utrecht, the Netherlands: Euro-
pean Center for Confl ict Prevention, 1999), at ict/guide/surveys.
62 Mediterranean Quarterly: Spring 2005
countries, NGOs such as Global Witness and Partnership Africa-Canada,
diamond-trading nations, and companies, including De Beers, agreed in
principle to halt and prevent trade in confl ict diamonds and to protect legiti-
mate diamond trade.
The Kimberley Process
The Kimberley Process included three provisions:
1. All participating countries agreed to trade only rough diamonds and to
establish national export-import control regimes to keep illicit diamonds
from the legitimate diamond trade.22
2. Diamond-producing and -trading countries must certify that all their
rough stones are confl ict free. The certifi cation system relies on partici-
pants implementing an effective control system to preclude trading in con-
ict diamonds.
3. The process defi nes confl ict diamonds as rough diamonds used by rebel
armies or their allies to fund wars and to undermine legitimate govern-
ments as defi ned by the UN General Assembly Resolution 55/56.23
For countries to participate in the Kimberley Process they must meet the fol-
lowing minimum requirements:
1. Countries will enact and implement legislation and/or regulations that
would keep confl ict diamonds from the market.
2. They will ensure that exports and imports of rough diamonds are trans-
ported in tamper-resistant containers.
3. They will produce a Kimberley certifi cate that satisfi es the require-
ments (such as carat weight, value, proof against forgery, country of origin,
and so forth) outlined in the agreement.
4. Finally, countries must collect, maintain, and exchange offi cial statisti-
cal data on the production and trade of rough diamonds.24
22. Margaret Bald, “New Rules to Stem Illegal Diamond Trade,” World Press Review, October 2000,
23. Alan Cowell, “Controversy over Diamonds Made into Virtue by De Beers,New York Times, 22
August 2000.
24. Global Witness, Broken Vows, 9.
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 63
Criticisms of the Kimberley Process
Although the Kimberley Process was lauded as a step in the right direc-
tion, it suffers from major defi ciencies that, if not corrected, could destroy
the intent of its framers—keeping confl ict diamonds from the global market.
Predictably, after more than three years of the process, there is ample evi-
dence to suggest that the loopholes in some of the provisions have provided
opportunity for those who are bent on destroying it. Some of the criticisms of
the Kimberley Process include the following:
1. The agreement granted the industry the power to regulate itself in Janu-
ary 2003. How is this possible? This remains the unanswered question
given the diamond industry’s questionable past.
2. Governments have resisted the call for a “systematic, impartial review
of all participants’ diamond control system to assess how they were work-
ing in practice.” During the negotiation process, NGOs insisted that an
impartial monitoring system be included in the agreement, but their efforts
were rebuffed by governments. However, in October 2003, the European
Commission and South Africa pushed for the adoption of a voluntary peer
review system.25 While the peer review system is an important milestone,
its effectiveness is predicated on thorough examination of all countries
every four years. This further illustrates the weakness of the amendment
that was introduced to mitigate fl aws in the initial agreement.
3. The absence of sanctions for countries found to be violating the agree-
ment further amplifi es the impediments that are inherent in the effective
implementation of the Kimberley agreement.
Kimberley was not the only weapon to be employed in the fi ght against
illicit trade in diamonds, however. Other initiatives were employed by govern-
ments, such as the Uniting and Strengthening America by Providing Appro-
priate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
Act), enacted to fi ght terrorism and money laundering.
25. Allan Rock, ambassador of Canada to the UN General Assembly, statement on the role of dia-
monds in fueling armed con icts, New York, April 2004, at
64 Mediterranean Quarterly: Spring 2005
The USA PATRIOT Act and the Diamond Industry
The evidence of a correlation between the confl ict diamonds and terror-
ism offers a logical reason to examine such a relationship more deeply. The
PATRIOT Act was enacted on 26 October 2001 with the main purpose of
preventing terrorist attacks in the United States. Other provisions of the law,
such as those addressing money laundering, are relevant to the diamond
industry. The law requires that “fi nancial institutions,” including the jewelry
industry, take the following steps:
1. They must create, implement, and test written anti-money-laundering
2. Employees of the jewelry industry must act as compliance offi cers.
3. These employees must be trained about the program.
4. There must be “independent testing” of the program to ensure its effec-
Although the many provisions of the PATRIOT Act have been criticized
on the grounds that they violate privacy rights and civil liberties of Ameri-
cans, the money-laundering provision could be a powerful weapon to prevent
the use of proceeds from the sales of confl ict diamonds to fi nance terrorist
acts and other criminal enterprises. The law is having profound implications
for the diamond industry across the globe and might compel companies that
are interested in trading with the United States to take meaningful steps
to ensure that their goods are not used for money-laundering purposes.27
Other countries have also adopted similar money-laundering measures. Ben
Kinzler, the executive director of the Diamond Manufacturers and Importers
Association of America, cautioned the diamond industry to disassociate itself
from terrorism. Arguing that a failure to address the association between the
industry and terrorism could seriously undermine consumers’ confi dence in
the diamond industry, he rhetorically demanded that consumers, suppliers,
and vendors should comply with the PATRIOT Act.
26. The proposed rule states that dealers must develop and implement all provisions within ninety
days of the rule’s coming into effect. See US Treasury Department, “Notice of Proposed Rulemak-
ing, Financial Enforcement Network,” 19 February 2003; “Anti-Money Laundering Programs for
Dealers in Precious Metals, Stones, or Jewels,” Rapaport, 19 February 2003.
27. Merle Almedlda, “India Seminar: Compliance and Consequence,” Rapaport, 29 January 2004.
Ndumbe & Cole: Illicit Diamond Trade, Civil Confl icts, and Terrorism in Africa 65
It is a very disturbing irony that diamonds, seen by many as a symbol of
love, harmony, and luxury, have also been the propelling force behind the
money-laundering machine of terrorist groups and other criminal syndi-
cates for decades. Without the diamond-related blood wars in Sierra Leone,
Angola, and the Democratic Republic of Congo, and the complicity between
terrorists and illicit trade in diamond, the international community would
have continued to be oblivious to the issue of confl ict diamonds and crimi-
nal connections. Mounting evidence from international organizations (includ-
ing the Security Council), NGOs such as Global Witness, and governments
around the world show a cozy relationship between illicit trade in diamonds,
civil confl icts, and terrorist organizations. The cost of the trade in illicit dia-
monds is evident by innumerable innocent civilians slaughtered, the desta-
bilization of weak and fragile governments around the world in general and
Africa in particular, and the adverse impact of the complex network of the
money-laundering machine created by terrorist organizations on the global
security system. Failure to address the underlying problems within the dia-
mond industry could result in decline of the industry because of shaken con-
sumer con dence and a stress on the global economic system. It is hoped
that cooperation between diamond suppliers and consumers would offer a
better understanding of the gravity of the problems created by trade in con-
ict diamonds. Containment of the problem would require that governments
around the world to play a proactive role to end all transactions involving
such trade. Failure to halt illegal trading practices could fi nance future acts
as heinous as the 11 September attack on the United States and the geno-
cide that occurred in the Democratic Republic of Congo and Sierra Leone
in the 1990s. If such human tragedies are to be averted, then multilateral,
concerted action initiated by the international community seems to be the
proper course of action to stop all illegal activities tied to confl ict diamonds.
... In the continent of Africa, the social forces that build up the diamond sector are the political groups, diamond smugglers, business elite, and individual countries. As an illustration, the involvement by the Victoria Diamond (Voktoria) in Democratic Republic of Congo and the Lebanese in Sierra Leone's diamond trade (Ndumbe and Cole, 2005) sector requires attention. These groups dominate the diamond sector in order to serve their own interests. ...
... In this respect, the authors saw the need to provide a nuanced theoretical approach to the study of the role played by diamonds in financing and perpetuating conflicts in the continent of Africa. Useful literature such as Smillie et al. (2000), Tamm (2002), Smith (2003), Ndumbe and Cole (2005) as well as de Wit et al. (2016) were extracted. The study utilized the qualitative and an exploratory design. ...
... In order to provide a context specific illustration, Gambia, Liberia and citizens from countries such as South Africa, Tajikistan, Ukraine, Netherlands, Russia, Belgium, Israel, Kenya, and the United States were involved illegal transactions in the Sierra Leone war. Liberia provided the RUF with diamond routes and in exchange of weapons (Ndumbe and Cole, 2005;Maconachie and Binns, 2007). In addition, Banat (2002) maintains that other players such as the Ukraine have supported the RUF in Sierra Leone in the revolutions as well as the exploitation diamond resources in Sierra Leone. ...
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This study unpacks dynamics in African war financing particular focusing on the role played by diamonds. The study of war financing is important in contemporary academic scholarship for a number of reasons. An exploration of financing war helps assist scholars understand the potential outcome of war. The way in which the war is financed determined its outcome. Insufficient war finance can lead to the failure to secure weapons, pay soldiers, and other expenses thereby weakening the military. Scholars that have explored the phenomenon have failed to provide a context specific theoretical explanation to the role played by diamond in financing civil wars. In order to address this knowledge gap, the authors found that the discourse of war finance is reflected in Gramscian theory of power. What this study retain from Gramscian discourse of power is the manner in which the country’s economic indicators are transform into military aptitudes.
... Neither petroleum nor diamonds were heavily traded commodities prior to the late 19th century (Black, 2012;Ndumbe and Cole, 2005). Therefore, their presence should have no differential effect on conflict in the pre-colonial period. ...
... The first oil well was not tapped until 1859(Black, 2012), and diamonds were not discovered in South Africa until 1866(Ndumbe and Cole, 2005).5 Dincecco et al. (2019) show that historical warfare in sub-Saharan Africa is associated with the creation of specialinterest states whereas conflict in Asia and Europe is associated with the creation of common-interest states-the slave trade being an important distinguishing factor between these regions. ...
... Skins, pelts and fur are the main traded animal products, followed by elephant ivory, meat and other body parts, bones and teeth, and horns (Rosen and Smith, 2010). The high demand for these products and subsequent wildlife poaching has been one of the main threats to the conservation of species (Challander et al., 2015;Dinerstein et al., 2007;Naylor, 2005). ...
... Permits and law enforcement are unlikely to stop laundering from occurring. As a comparison, illicit diamonds still comprise a considerable fraction of the global diamond trade (Ndumbe and Cole, 2005), and some 3%-15% of the diamond industry still consists of so-called 'blood diamonds' (Fishman, 2013). ...
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Wild animals and their derivatives are traded worldwide. Consequent poaching has been a main threat to species conservation. As current interventions and law enforcement cannot circumvent the resulting extinction of species, an alternative approach must be considered. It has been suggested that commercial breeding can keep the pressure off wild populations, referred to as wildlife farming. During this review, it is argued that wildlife farming can benefit species conservation only if the following criteria are met: (i) the legal products will form a substitute, and consumers show no preference for wild-caught animals; (ii) a substantial part of the demand is met, and the demand does not increase due to the legalized market; (iii) the legal products will be more cost-efficient, in order to combat the black market prices; (iv) wildlife farming does not rely on wild populations for re-stocking; (v) laundering of illegal products into the commercial trade is absent. For most species encountered in the wildlife trade, these criteria are unlikely to be met in reality and commercial breeding has the potential to have the opposite effect to what is desired for conservation. For some species, however, none of the criteria are violated, and wildlife farming can be considered a possible conservation tool as it may help to take the pressure off wild populations. For these species, future research should focus on the impact of legal products on the market dynamics, effective law enforcement that can prevent corruption, and wildlife forensics that enable the distinction between captive-bred and wild-caught species.
The chapter argues that the process of natural resources extraction qualifies as the most visible cause of conflicts and crises around the world. This is quite understandable given that a resource is a gift of nature; and nature is that phenomenon that every human, group and nation claims to represent, or, believe to represent them. Natural resources therefore are considered as the resources of and for all. However, following the social conflicts that emerged after the period of homoeostatic equilibrium and subsequent commencement of ownership of private property, alienation has overtaken natural resources that used to belong to all, at least theoretically, and both the state and non-state actors have been culpable in alienating others from the resource of nature. Natural resource actors include the state, indigenes, and multinational companies and so on, and conflicts often emerge when there is clash of interest among them. Thus, in Africa, for example, natural resources have generated war and conflicts in Nigeria, Democratic Republic of Congo, South Africa and Angola to mention a few. These conflicts have led to loss of lives, internal displacement of huge parts of populations, refugees and asylum seekers that have become burdens on other nations around the world, as well as many international organizations. The natural resources related conflicts can be seen to be pronounced in Africa, its effects and consequences are intertwined among nations of the world. Even multinational companies that deal in them, from what their name implies, are representatives of the business interests of many nations and are often not neutral in wars and conflicts generated by natural resources. Thus, this chapter focused on the dynamics and complexities associated with natural resources in Angola. It found that natural resource conflict has led to multiple forms of resource curse, which undermined nation building in Angola.
Existing scholarship on the political economy of political violence, to date, has mostly focused on how formal economies shape or are shaped by conflict and overlooked the informal sector. In this article, we posit that intrastate conflicts are likely to fuel the growth of shadow economies by harming the formal economic sector, undermining governments’ ability to regulate their economies, and fostering illicit trade. We also hypothesize that the effect of internal conflicts spreads across national boundaries, increasing the amount of shadow sector activity in neighboring states. Results from a global analysis spanning from 1971 to 2012 provide significant evidence that internal conflicts positively contribute to the growth of informal economies in conflict states and their neighbors. Additional analyses also show that the growth of shadow economies does not contribute to the outbreak of intrastate conflicts. Our findings have important implications for understanding the transformative economic consequences of violent conflicts and the longer-term economic legacies they might leave.
In the early 1990s several rebel groups turned to natural resource extraction to pay for war. A key form of this is rebel diamond production, commonly referred to as conflict diamonds, which is widely perceived as being highly beneficial to insurgent organisations. Yet in the Angolan Civil War (1992–2002), the use of conflict diamonds by the National Union for the Total Independence of Angola (UNITA) resulted in a decisive insurgent defeat. How can this outcome be explained? Offering a nuanced understanding of how conflict diamonds affect civil war, this article shows that although diamonds generated considerable revenue for UNITA, they were not an effective method for them to take on the Angolan government. This was for two reasons: internally, the rebels greatly struggled to convert their diamond proceeds into sufficient goods and services; and externally, it left the group highly vulnerable to international countermeasures in the form of United Nations Security Council sanctions. Natural resource extraction may therefore not be as useful to rebel groups as is frequently believed.
The relationship between drug trafficking and terrorism remains a contentious issue. While some assert that drug trafficking is a strong predictor of terrorism, others contest this observation. This study focuses on the impact of the Afghan opioids trade on terrorist violence in Central Asia, a region of drug transit states. We employ GIS-enabled visualizations of the drug trade and terrorism as well as statistical tests to study the drug-terror relationship at the subnational level. Our findings lend support to the argument that drug trade facilitates terrorism, but we also find that the drug-terror relationship is multi-faceted, complex, and intimately linked to the state.
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African trade statistics suffer from errors of commission and omission. A quarter-century ago, Alexander Yeats (1990) compared receipts of importers and exporters and concluded that the data could not be used to determine the magnitude, direction, or composition of trade. The only fact to be safely deduced from the evidence was that the statistics were plagued by widespread smuggling and/or underreporting. More than two decades later, despite improvement in external economic conditions, trade statistics continue to be lacking in quality.
Recent studies point to how resources such as diamonds have funded insurgency movements and how their geographic presence can foment the incidence but not necessarily the onset of civil wars. Such empirical studies are based on global models; however, we believe regional effects may be present. In order to address this, we disaggregate the empirical findings based on Africa as a region. By estimating a panel study of African states, we discover that those that are secondary diamond producers are not only vulnerable to domestic strife, but also prone to lower levels of economic growth, coup d'etat episodes, and state failure-conditions that inhibit democratic state-building. We also find that secondary diamond-producing states in Africa are prone to both the onset and incidence of civil wars, a finding that diverges from previous empirical work. In asking how states may obviate this curse, we affirm a claim of state developmentalism: that in order to prevent collapse, states must harness the revenue potential of diffuse resources. The regulation and legitimisation of diamond production is an effective bulwark against the potential opportunity structures that such lootables may provide to warlords, insurgents, and military factions.
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Since independence in 1961, Sierra Leone has had numerous ethnic and political conflicts. Like many African countries, it is home to a multicultural society with some seventeen ethnic groups broadly divided into two main groups - the Mende and the West Atlantic groups.1 Minor ethnic disputes can easily degenerate into armed struggle. The civil war (1991 to 2000) in Sierra Leone was eventually a struggle of various ethnic groups to control the diamond-rich mines of the country and external influences. The interplay of these factors paved the way for the tragedy that the world has witnessed in Sierra Leone over the past decades. For more than a decade, the war in Sierra Leone brought misery and suffering to its citizens. The war destroyed the social fabric, weakened the economy, and left administrative structures and institutions in a fragile and decaying state. An effective solution to address the conditions created by the war cannot be arrived at until the factors that created the climate for hostilities are addressed. It is vital to reconstruct institutions and structures that are needed to educate the people of Sierra Leone on the administration of government. A careful definition of the role of the military must also be crafted. International assistance is absolutely imperative to develop a system in which the rule of law and not the power of the barrel is supreme. Therefore, the international community must be committed to institution building. Without such assistance there is a greater probability that the security of Sierre Leone could once again deteriorate into another disaster, perhaps even becoming a regional war.
Al Qaeda Cash Tied to Diamond Trade
  • Douglas Farah
Douglas Farah, " Al Qaeda Cash Tied to Diamond Trade, " Washington Post, 2 November 2001, A10.
Al Qaeda's Growing Sanctuary
  • Douglas Farah
  • Richard Shultz
Douglas Farah and Richard Shultz, " Al Qaeda's Growing Sanctuary, " Washington Post, 14 July 2004, A19.
New Rules to Stem Illegal Diamond Trade
  • Margaret Bald
Margaret Bald, "New Rules to Stem Illegal Diamond Trade," World Press Review, October 2000, 33.
Controversy over Diamonds Made into Virtue by De Beers
  • Alan Cowell
Alan Cowell, "Controversy over Diamonds Made into Virtue by De Beers," New York Times, 22 August 2000.
countries must collect, maintain, and exchange offi cial statistical data on the production and trade of rough diamonds
  • Finally
Finally, countries must collect, maintain, and exchange offi cial statistical data on the production and trade of rough diamonds. 24