Blood diamonds

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The term blood diamond emerged from the civil wars in Angola and Sierra Leone, and has become a generic term for gems mined outside international controls and used to finance armed conflict. Formally, the United Nations adopted the term conflict diamond for gems that
originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments, or in contravention of the decisions of the Security Council.[1]

This definition was adopted "as a contribution to prevention and settlement of conflicts (A/RES/55/56). In taking up this agenda item, the General Assembly recognized that conflict diamonds are a crucial factor in prolonging brutal wars in parts of Africa, and underscored that legitimate diamonds contribute to prosperity and development elsewhere on the continent. In Angola and Sierra Leone, conflict diamonds continue to fund the rebel groups, the National Union for the Total Independence of Angola (UNITA) and the Revolutionary United Front (RUF), both of which are acting in contravention of the international community's objectives of restoring peace in the two countries."

Illicit gemstone markets form an informal value transfer system and have been used for the financing of terrorist groups in a manner invisible to financial intelligence. After the 1998 attacks on U.S. embassies and civilian facilities, in Nairobi, Kenya and Dar-es-Salaam, Tanzania, the Clinton administration froze some $240 million in assets belonging to Afghanistan's Taliban government and Osama bin Laden. al-Qaeda, caught by surprise, searched for an alternative to confiscated gold reserves.

The decision was made to shift funds from the formal banking sector into negotiable commodities, such as diamonds and tanzanite. These minerals were already in places without tight controls:

  • Tanzanite is only found in a small corner of Tanzania,
  • The diamond trade into which al Qaeda tapped, in West Africa, was centered in Liberia, where the corrupt regime of Charles Taylor also controlled diamonds mined by his allies in neighboring Sierra Leone. In Sierra Leone the diamond fields were under the control of the Revolutionary United Front (RUF).

"Al Qaeda already had long-standing ties to the gemstone trade. Documents and testimony presented during 2000 the trials of Wadih el Hage and Mohammed Sadeek Odeh show that al Qaeda, even before the U.S. embassy bombings, was dealing extensively in diamonds, tanzanite, amethyst, rubies and sapphires, mostly as money making ventures. According the trial transcripts, senior al Qaeda leaders were deeply concerned about the possibility that an al Qaeda operative was carrying a large quantity of stones when he drowned while crossing a lake."[2]

The Internal Revenue Service has since instituted new anti-money laundering regulations to control the gem trade.[3]

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