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RUSSIA LOOKING TO LIST RESTRICTION ON ONLY COUNTRY STILL LISTED AS PRODUCER OF CONFLICT DIAMONDS

According to Kimberley Process (KP) rules, there is only current source of goods in the market that can be qualified as conflict diamonds, and those are rough goods being mined by artisanal miners in the Central African Republic (CAR).

That could be about the change, however. According to a statement released in late February by Alexei Moiseev, the deputy finance minister of the Russian Federation, which in 2020 is chair of the KP, his country plans to work to lift restrictions on the export of diamonds from CAR.

As quoted by Reuters, Moiseev stated that the current restrictions meant to ensure that only KP-compliant goods are exported from CAR have not really  affected the country’s total output of rough goods, but rather has increased the amount of diamonds being sold generating profits for middlemen rather than local communities.

“That’s not what we want,” the Russian deputy finance minister stated.

CIVIL CONFLICT DATING BACK TO 2012

The current civil conflict in CAR dates back to December 2012, when forces of the Seleka faction attacked government forces, eventually overthrowing it in March 2013. 

In response to reports that the Seleka had been funded by the sale of alluvial rough diamonds, in May 2013 the Kimberley Process announced it was suspending CAR’s membership in the KPCS, thus making it illegal for all other member countries to permit diamond exports from that country. 

According to the KP, in 2012, the year before the ban, CAR officially registered 371,917 carats of diamond exports, worth more $62 million.

Bangui,  the capital and largest city of the Central African Republic.

In June 2016, following the election eight months earlier of President Faustin-Archange Touadera, CAR resumed limited exports of rough diamonds, according to a program developed with the KP, which was supported by the United Nations. 

The program dictates that the only diamonds that been mined in “green” compliant zones would be eligible for export with a KP certificate issued by the CAR government. These zones are in areas under secure CAR-government control, and where the KP also has determined that production meets Kimberley Process Certification Scheme (KPSC) operational framework traceability requirements. For this to occur, there can be no evidence of armed rebel group activity, free movement is permitted of persons in and out of the area, and mechanisms have been put in place by the government to monitor diamond production and the diamond trade.

All KPCS-certified rough diamonds from the CAR need to be approved for export by the Kimberley Process’ specially designated CAR Monitoring Team. But only a small proportion of the rough goods being mined in the country have actually been submitted for approval to the CAR Monitoring Team, making them are eligible for export with a KPCS certificate from the CAR authorities.

The current civil conflict in CAR dates back to December 2012, an in May 2013 the Kimberley Process announced it was suspending CAR’s membership in the Kimberley Process Certification Scheme. Limited exports resumed in June 2016.

INCREASED VIGILANCE REQUIRED IN TRADING CENTERS 

The original operational framework structure of the CAR Monitoring Team required that KPCS-certified rough diamonds from the CAR had to be pre-approved for export by a designated CAR Monitoring Team. With its volunteer members spread out across the globe, from a practical perspective this meant that exports took place just one week out of every month. Some was felt that this the bottleneck may by partially responsible.

At the most recent Plenary Meeting of the Kimberley Process, which took place last November in New Delhi, it was  proposed that the system be restructured on a provisional basis, allowing the CAR government to issue at will KP certificates to rough diamond shipments, for goods being sourced in the eight approved green zones. 

The CAR government will continue to record all export data, which will be submitted to the Monitoring Team for review. The success of the revised process will be assessed during the course of 2020. If no noticeable improvement in the volume of legal exports is recorded, it will likely return to its original structure within 12 months.

The U.S. State Department representative, which chairs the CAR Monitoring Team and pushed for the provisional change, stressed that the restructuring did not represent a relaxation of the monitoring of legal exports from the country. Under the new system, copies of all KP export certificates received from the CAR government will be cross-checked against the confirmations of imports of the corresponding shipments, and the latter need to be supplied by the authorities in the importing countries.

But, as the World Diamond Council (WDC) pointed out in a notice it sent out to the trade on December 2, 2019, the new operational framework system does shift some of the burden of verifying the provenance of the goods to the trading centers. 

Enhanced vigilance, the WDC states, requires the trade to take all reasonable measures to ensure that shipments from CAR only include goods that have been sourced from the approved green zones, and always are accompanied by an official CAR Government KP certificate.