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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 fi 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.
Angola
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 www.geology.ucdavis.edu. See also
“Diamond History,” at www.diamondland.be/contentview.aspx.
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
fi 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 UNITA’s 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-
chases.5
Evidence pointing to Zambia’s 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 www.oecdobserver.org/news/fullstory.../Rough_
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 onnet.com/fl 2108/stories/20040423003304700
.htm.
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
mines.7
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 www.macha.f9.co
.uk/d_ch1_hunt.html.
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 UNITA’S
diamonds and a source of confl 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 fi 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 www.cryfreetown.org/
pre90s.html.
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
fi 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
fi 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
.web.net/pac/pacnet-1.
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
Liberia
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,
A10.
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 www.euforic.org/euconfl 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-
fl 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,
33.
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 confl icts, New York, April 2004, at www.un.int/canada/s-14Apr2004Rock
.htm.
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
procedures.
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-
tiveness.26
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
Conclusion
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 confi 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-
fl 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.