Trail of “blood” diamonds: Russia’s role in the Kimberley Process

Russia and Belgium, on the sidelines of the plenary session of the Kimberley Process (KP) in Moscow, signed the first agreement on the digitalization of information related to the certification of diamond products. Now documents about “blood” gems will be available on electronic media. The transition to a new level of relations with the representative of the European Union will allow Russia to accelerate the trade turnover of diamond products between business partners.

This will be possible due to the prompt receipt of statistical data on the import and export of diamonds and the automation of the data processing process. Launching a global transition to the digital exchange of CP certificates is one of the priorities of the Russian Chairmanship in 2021. understood what role the translation of certificates into electronic format will play in the development of the Kimberley Process.

Wounds of "bloody" stones

“Conflict” or, as they are also called, “blood” diamonds at the beginning of this century became a big problem for African countries and a threat to all humanity. Funds from the sale of illegally mined gemstones were used to finance terrorism and anti-government armed conflicts. It was because of diamonds that civil war continued for many years in Angola, which gained independence in 1975. And in 2000, the UN condemned Liberian President Charles Taylor, who supported rebel movements in neighboring Sierra Leone with arms supplies and trade in exchange for precious stones.

However, the international community paid special attention to the problem of “bloody” stones on the market only after the terrorist attack of September 11, 2001. According to numerous reports, the activities of banned terrorist groups, including the Taliban (banned in the Russian Federation), which seized power in Afghanistan, were financed through the illegal mining of precious stones.

Realizing that such a smuggling scheme is developing more and more every year, representatives of diamond mining and trading countries held their first meeting in Kimberley (South Africa) in 2000 to develop a mechanism to combat the problem. Thus, in 2003, it was decided to create a process named after this African city and directly supported by the UN.

The main goal of the alliance is to prevent conflict diamonds from entering the international market and, accordingly, to prevent money from being made from illegal mining of stones. Membership in the Kimberley Process gives countries the ability to legally sell them. In this issue, the development of a certification scheme confirming the extraction of diamonds outside the conflict zone plays a key role. For this purpose, each country has an authorized body that inspects stones.

At the plenary session of the organization's member countries in Moscow, the issue of three new states joining the alliance - Mozambique, Qatar and the Republic of Kyrgyzstan - was discussed. Today the union includes 56 participants and 4 observers, who are also manufacturers and importers of precious stones. From among them, a chairman and vice-chairman are elected annually. This year, these powers belonged to the Russian side, which last held this post in 2005. The next country to follow will be Botswana.

Operating procedure [edit]

The working procedure of the KPCS is carried out by the chairman, elected annually at the plenary meeting. The monitoring working group works to ensure that each participant implements the scheme correctly. The working group reports to the Chairman. Other working groups include a technical working group (or diamond expert working group), which reports implementation challenges and propose solutions, and a statistical working group, which reports diamond trade data.

While the Process is widely welcomed by groups seeking to improve human rights in countries previously affected by conflict diamonds, such as Angola, some say it does not go far enough. For example, Amnesty International states: “[We] welcome the Kimberley Process as an important step in addressing the issue of conflict diamonds. But until the diamond trade is subject to mandatory and impartial monitoring, there will still be no effective guarantee that all conflict diamonds will be identified and removed from the market." Canadian aid group One Sky (partially funded by the Canadian government) agrees with Amnesty's view, stating: "If implemented effectively, the Kimberley Process will prevent diamonds from being used to finance wars and atrocities... However, without a system of peer-reviewed, independent and periodic reviews in all countries, the overall process remains open to abuse." The founder of the Fatal Transactions campaign (started in 1998), Anne Yeung, criticized the KPCS in 2008 for not being a legally binding agreement and suggested that the scheme be reconsidered. [16]

Another form of criticism from the African Diamond Council (ADC) is whether the Kimberley Process can truly be enforced. There are many factors that can jeopardize the "official status of certificates and documents" [17] [18] from lack of local enforcement to secrecy in diamond trading centers such as Antwerp. Human Rights Watch also found that there is little independent monitoring of compliance with the Kimberley Process and few penalties for violations. [6]

Working groups [edit]

KPCS has established a number of working groups to carry out its programs. As of 2021, it had 7 working groups: Working Group of Diamond Experts (WGDE), Working Group on Monitoring (WGM), Working Group on Statistics (WGS), Working Group on Artisanal and Alluvial Mining (WGAAP), Committee on Participation and Chairmanship (CPC), Committee on Rules and Procedures (CRP) and Ad Hoc Committee on Reform and Review (AHCRR). [19]

Certificates of the XXI century

The digitalization of KP certificates began precisely in the year of Russia’s chairmanship, which is the world leader in promoting electronic document management in the field of diamond trade. This task became the main one during Moscow's chairmanship. According to the Deputy Minister of Finance of Russia and Chairman of the Committee for Strategy and Sustainable Development under the Supervisory Board of AK ALROSA, Aleksey Moiseev, all observed processes are necessary for the complete abandonment of paper media and the transition to electronic format. However, in his opinion, today there are a number of problems that delay the resolution of this issue.

There are a number of states that are not so advanced in terms of digital development, some of them are currently not ready for this step at all. However, today we are trying to encourage them to start investing in these processes. Will be working. I believe that the complete transition of all countries will not be carried out soon. However, today we have provided a single internationally recognizable format using the Belgian scheme as an example. I think the two largest world centers will set the tone for everyone else ,” Moiseev emphasized.

He noted that today the exchange of certificates will be carried out in a bilateral format. A similar agreement has already been concluded with Belgium, a pilot project has been launched with Belarus, and documents are expected to be signed with India, Armenia, and Kyrgyzstan.

The transition to digital exchange of CP certificates, which are currently issued on paper, will simplify and speed up the procedures for issuing them. In addition, digital documents are a guarantee of the legitimacy of each shipment of diamonds sent. Russia has always advocated promoting the principles of openness in the global diamond trade ,” Moiseev said.

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Current membership[edit]

As of 1 July 2013, the KPCS had 54 members representing 81 countries, with the European Union counting as one member. All major producing, exporting and importing countries of rough diamonds participate in it. [20] Cameroon, Kazakhstan, Panama and Cambodia were admitted as participants in 2012. Below is a list of participating countries, with their year of entry (and, where appropriate, re-entry) in parentheses.

• Angola (2003)
• Armenia (2003)
• Australia (2003)
• Bangladesh (2006)
• Belarus (2003)
• Botswana (2003)
• Brazil (2003)
• Cambodia (2012)
• Cameroon (2012)
• Canada (2003)
• Central African Republic (2003)
• China (2003)
• Democratic Republic of the Congo (2003)
• Cote d'Ivoire (2003)
• European Union (2003)
• Eswatini (2011)
• Gabon (2018)
• Ghana (2003)
• Guinea (2003)
• Guyana (2003)
• India (2003)
• Indonesia (2005)
• Israel (2003)
• Japan (2003)
• Kazakhstan (2012)
• Laos (2003)
• Lebanon (2003/2005)
• Lesotho (2003)
• Liberia (2007)
• Malaysia (2003)
• Mali (2013)
• Mauritius (2003)
• Mexico (2008)
• Namibia (2003)
• New Zealand (2006)
• Norway (2003)
• Panama (2012)
• Republic of the Congo (2003/2007)
• Russia (2003)
• Sierra Leone (2003)
• Singapore (2004)
• South Africa (2003)
• South Korea (2003)
• Sri Lanka (2003)
• Switzerland (2003)
• Tanzania (2003)
• Thailand (2003)
• Togo (2003)
• Türkiye (2007)
• Ukraine (2003)
• United Arab Emirates (2003)
• United Kingdom (2021)
• {US (2003)
• Venezuela (2003, withdrew 2008, readmitted 2016)[21][22]
• Vietnam (2003)
• Zimbabwe (2003)

Candidates[edit]

The following countries have expressed interest in joining the KPCS but have not yet met the minimum requirements:

• Burkina Faso
• Chile
• Kenya
• Kyrgyzstan
• Mauritania
• Mozambique
• Qatar
• Uzbekistan
• Zambia

Refusal[edit]

The World Trade Organization (WTO) approved a waiver for the SSCPA in December 2006, recognizing the importance and effectiveness of the SSCPA. [23]

Statistics[edit]

KPCS places particular emphasis on the collection and publication of data relating to actual diamond production and international diamond trade. Member countries are required to officially report statistical data that can be verified through auditing. [30] In addition, all member countries are required to compile and submit an annual report on diamond trade. [31] According to the KPCS Working Group on Statistics (WGS), in 2006 the KPCS controlled $35.7 billion worth of rough diamond exports, representing more than 480 million carats. The number of certificates issued by KCCP members was 55,000.

In 2014, 100 Reporters published an article showing how the use of KP certificates allowed the publication to uncover transfer pricing manipulation in the South African trade in exported rough diamonds [32], detailing: “Most imported diamonds appear to be re-exported uncut and unprocessed. Although imports amount to a relatively small volume, or carats, they dramatically increase the cost of exporting rough diamonds. If the value and volume of imported diamonds stated in South Africa's KP certificates are subtracted from the corresponding exports, the actual price per carat of rough diamonds is the first time exports fall sharply."

The article revealed that when "asked about anomalies in the reported Kimberley Process (KP) diamond trade data in South Africa, where De Beers is a dominant player, [Lynette] Gould [De Beers' head of media relations] responded: “The main purpose of the KP process (or at least the issuance of certificates) is for governments to certify the origin of diamonds, not to track the volume and value of diamonds imported or exported.” [32]

Annual report[edit]

The annual report of all KPCS members is an integral part of the peer review mechanism established by the KPCS. In the United States, for example, all companies that buy, sell and ship rough diamonds must submit an annual report via email to the State Department by April 1. [33] The report [34] must include company contact information and a detailed breakdown of the total carat weight and US dollar value of rough diamonds imported, exported and stockpiled (still in inventory) for the previous calendar year. They are also sorted by HTS codes for ungraded (gem and industrial) rough diamonds, graded industrial rough diamonds and graded gemstone rough diamonds, the latter of which are more likely to be processed into finished stones and jewelry for retail sale, whereas industrial Diamonds are most likely to be used in cutting and drilling tools. Failure to timely file this annual report may result in a fine of up to $10,000. If found to have committed a willful violation, the person convicted could be fined up to $50,000 and sentenced to up to ten years in prison. [35]

Global Witness[edit]

Global Witness is a London-based NGO, a key element of the SSCPA and was one of the first organizations to bring the issue of "conflict diamonds" to international attention. [43] They claim that the report they wrote, "Rough Deal," partially inspired the film Blood Diamond.

. [44]

According to Global Witness, the Kimberley Process ultimately failed to stop the flow of conflict diamonds, forcing them to abandon the scheme in 2011 [45].

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