Commission and Belgium set to battle over illicit diamonds

Date: 04/04/02

By David Cronin

THE European Commission and Belgium are at loggerheads over planned new rules aimed at stamping out the illicit diamond trade blamed for fuelling some of Africa's bloodiest wars.

Due to be published this summer, the Commission proposal will try to establish a legally-binding EU instrument on halting the flow of 'conflict diamonds' into Europe. The London-based International Institute of Strategic Studies estimates that revenue from between 5% and 20% of all the diamonds traded in the world could be funnelled to armed groups in Africa - particularly in Angola, Sierra Leone and the Democratic Republic of Congo.

Commission insiders say their suggested 'regulation' will lay down requirements for the 'certificates of origin' needed to show that diamonds imported into the EU come from bona fide traders.

It will also give details on what controls should apply between the import and export stages - when the gems are in transit or storage.

But Belgium is concerned that the proposal could jeopardise the control system it has introduced for the Antwerp diamond centre, which handles 80% of the world's trade in rough stones.

Under this system, each of the 50,000 parcels of diamonds imported to Belgium every year is opened by qualified inspectors.

The inspectors, who are paid by the jewel industry, are obliged to report any suspicion of illegality.

The Commission believes that the system breaches EU single market legislation. As a large proportion of the diamonds examined have been imported by another member state before being transported to Belgium, the Commission feels that they cannot legally be subject to these controls in a free trade area.

'We will have to deal with this issue,' said one insider.

While the Belgians acknowledge their system is not foolproof, they say it has been effective in curbing illegal imports. In April 1999, for example, a consignment of diamonds from Angola was seized because the accompanying documents were forged. The jewels were immediately confiscated.

'We are not opposing what is going to be done on a European level and we are very happy that action is being taken to tackle the 'conflict diamond' question,' said a Belgian official. 'What we want is that the Commission will pay a lot of attention to our own system so that what we have put in place can remain as such.

'For us, it would be very difficult to accept a weakening of the Belgian control system.'

One idea being touted to ensure effective monitoring of the trade is that there should only be two points of entry for all diamonds into the EU: one in the UK and one in Belgium.

But the Commission is likely to reject this. 'There is no reason to have artificial restrictions [on trading],' said one official.

The Commission's proposal will be one of the most-awaited initiatives under the so-called Kimberley Process - initiated by the South African government in May 2000 in a bid to break the link between diamonds and conflict.

Although UN resolutions have led to certificates of origin being introduced for diamonds from Angola and Sierra Leone since 1998, campaigners feel much more needs to be done.

Oxfam's EU spokesman, David Earnshaw, said strong measures on policing the trade would be in both the interests of consumers and legitimate jewellers.

'I'm sure consumers would like to have confidence that they are not buying something tainted with blood,' he said. 'If you don't have safeguards, then maybe this beautiful thing which costs a fortune could be helping rebels in Sierra Leone or leading to the mutilation of children by landmines.'

Meanwhile, leading diamond exporter Botswana is anxious that its reputation should not be tarnished by any association with smuggling. It has hired the Brussels branch of public relations giant Hill and Knowlton to organise a campaign promoting its diamond industry as 'clean'. Sales of the jewel account for 80% of the Botswana government's foreign exchange earnings.

The European Commission and Belgium are at loggerheads over planned new rules aimed at stamping out the illicit diamond trade blamed for fuelling some of Africa's bloodiest wars.