- The Washington Times - Friday, January 3, 2003

The United States and more than 30 other countries this year will try to stop trade in diamonds used to finance warlords and terrorists through a new system to monitor where the gems originate.
The program's success will hinge on writing laws and implementing enforcement measures necessary to block trade in "conflict diamonds."
The Bush administration, which in November officially signed onto the international program that began Wednesday, has sent legislative proposals to Congress, and new laws could be in place in the first few months of the year, according to a House Republican aide.
The House passed conflict-diamond legislation last year, but a measure with stronger wording died in the Senate.
"The United States is committed to ending the use of rough diamonds by rebel groups to fund insurrections against internationally recognized governments and atrocities against civilian populations," Philip T. Reeker, a State Department spokesman, said in a statement released this week.
But he acknowledged that the Kimberley process, as the United Nations-brokered diamond certification program is known, requires legislation to work.
"We will work expeditiously with Congress to pass legislation as soon as possible in 2003," Mr. Reeker said.
Conflict diamonds have been primarily associated with Angola, the Democratic Republic of Congo, Liberia and Sierra Leone, where warring groups have funded their battles with proceeds from diamond sales. Diamond trade also has been tracked to terrorist groups.
The new program, which applies only to rough diamonds, not to cut stones, requires a certificate to accompany each shipment of diamonds. Individual countries are responsible for establishing internal controls, such as licensing diamond mines, and generating the certificates.
The process is generally credited by human rights groups and observers as a positive step, though it is not considered a cure-all. While requiring nationally issued certificates that indicate where rough diamonds originate and that they are legitimate for trade, the plan relies heavily on voluntary participation, industry self-regulation and occasionally inadequate controls along the supply chain, according to a General Accounting Office critique published last year.
"I applaud the Kimberley process. My question is how effective it will be. Let's not assume that with the implementation we will see the problem of conflict diamonds disappear," said Timothy Docking, an African affairs specialist at the U.S. Institute of Peace, a non-partisan institution funded by Congress..
The trade in illicit diamonds makes up a small percentage of all trade. Industry estimates put the figure at 3 percent of a rough-cut-diamond trade that was expected to produce almost $7.9 billion in output for 2002, according to the World Diamond Council.
But the sale of conflict diamonds, usually mined in African countries lacking strong central governments, allows warlords and terrorists to raise tens of millions of dollars, undermine governments and place civilians in increasing danger, Mr. Docking said.
"It becomes the fuel for these rebel movements and motivation to hold large portions of territory," he said.
The U.S. diamond industry has backed the new monitoring process.
"One thing it is going to do, we will be able to assure customers for first time that measures have been implemented to prevent conflict diamonds from entering the legitimate supply," said Fred Michmershuizen, director of marketing and communications for Jewelers of America, a trade association for retail jewelers based in New York.
Major mining companies, such as South Africa's De Beers, also have backed the process.
U.S. Customs already seizes some diamonds from war-torn countries facing U.N. sanctions, But without an international certification system, conflict diamonds shipped to an intermediary country can be mixed into U.S.-destined shipments, a government report published last year said.
The report, by the General Accounting Office, added that the Kimberley process was not stringent enough to halt trade in conflict diamonds, though the Bush administration disagreed with that assessment.
Legislation in the Senate last year, sponsored by Sen. Richard J. Durbin, Illinois Democrat, pushed for tighter controls, including broadening the definition of conflict diamonds and prohibiting imports of polished diamonds and jewelry when there is sufficient evidence that they were created from conflict diamonds.
"While we are grateful that the system is being implemented, the senator still has serious concerns. We'd like to work with the administration in the upcoming Congress to see where we might be able to strengthen and monitor the system legislatively," said Jenni Engebretsen, a spokeswoman for Mr. Durbin.
The House Republican aide said that a more moderate version of the bill, following administration guidelines, is likely to pass and be signed into law.

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