Illicit Diamond Trade Used by Hizballah and Others

July 7, 2008 - 8:17 PM

Nairobi, Kenya (CNSNews.com) - The international community should speed up efforts to prevent terrorist groups from using the proceeds from illicit diamond trade to finance their activities and launder their funds, campaigners say.

A Nairobi-based African affairs analyst, Adan Mohamed, said it was "very likely" that groups like Hizballah still use the trade to raise additional revenue.

"Nothing much has happened in putting mechanisms in place to prevent diamond trade from being used to clean dirty cash or finance conflicts," he said.

Investigations by researchers, human rights groups, the United Nations and media organizations have revealed how Hizballah exploited weakness in the international diamond trade monitoring systems to hide their assets and raise funds.

The illicit trade was mainly carried out in the West African nations of Sierra Leone, Liberia and the Ivory Coast, and further south in the Democratic Republic of Congo (DRC).

The trade was allegedly facilitated in part by former Liberian President Charles Taylor, now facing war crimes charges in The Hague.

Taylor was the main sponsor of the notorious Sierra Leone rebel group the Revolutionary United Font (RUF), which controlled a significant segment of the country's rich alluvial diamond mines.

The RUF waged a brutal five-year war against the Sierra Leone government in which it targeted non cooperative civilians and punished them by amputating their arms. Some RUF leaders are in the custody of the International Criminal Court.

The gems mined by RUF were shipped to Taylor's Liberia for onward transmission to Hizballah, al-Qaeda and other illicit international buyers, according to published accounts.

The small but influential Lebanese community in West Africa, comprising mostly Shiites, was also found to be instrumental in facilitating the transfer of illicit diamonds to Hizballah.

A 2004 report in the Middle East Intelligence Bulletin, a publication of the Middle East Forum and the U.S. Committee for a Free Lebanon, said that although the U.S. authorities had been able to reduce the flow of Hizballah financing from networks in the U.S., "it appears that one lucrative source of Hizballah financing is still growing: the diamond trade in West Africa."

Security information consultant group Strategic Forecasting (Stratfor) said last month that Hizballah could finance new attacks on Israeli targets abroad using funds from a profitable "blood diamond" network in West Africa.

Another group that has in the past documented how Hizballah and al-Qaeda have used diamonds from West Africa to finance their terrorist activities is the international NGO, Global Witness.

In a new report, the group says efforts to monitor the international movement of diamonds have not been successful and more needs to be done.

Global Witness estimates that four percent of illegal diamonds get into the international market every year. The overall global diamond trade is worth over $60 billion and most of the retail sales are in the United States.

A project known as the Kimberley Process Certification Scheme (KPCS) was started in 2003 to monitor international diamond movement, in a bid to prevent the gems from being used to fund conflicts and fuel human rights abuses. Seventy countries have agreed to implement the plan so far.

Pamela Wexler, an attorney who authored the new report, said that although there was much to praise about the KPCS inaugural phase, it had not yet evolved into a fully credible check on the international movement of diamonds.

"Foremost are gaps in oversight, specifically of internal control systems in individual countries and of the peer review monitoring system overall."

Another key weakness was inadequate checks on private industry by individual governments.

The KPCS requires governments to implement import/export control regimes and to adopt systems to oversee their private sectors, and so keep a documentary record of rough diamonds as they travel from the mine to their polished state.

Diamonds must be shipped in sealed containers and export agencies must certify that parcels are free from "conflict diamonds."

Members also agree to prohibit entry of uncut stones arriving unsealed or without proper certification.

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