ISSUES....
Inside, confidential, off the record

Diamonds underground

Partnership Africa Canada (PAC), an NGO member of KP or The Kimberley Process an international organization that regulate the trade of rough diamonds, is calling for the expulsion of Venezuela from the Process. The demand has been made following PAC's claim that 90 percent of the country’s 150,000 carats annual diamond production is smuggled out of Venezuela. PAC reports that over the past ten years, Venezuela’s declared diamond production has dropped from 300,000 carats a year, to fewer than 30,000 carats. Meanwhile, diamond production in neighboring Guyana has followed exactly the opposite track: from approximately 50,000 carats to almost 400,000 carats. These changes have arisen despite the fact that diamond mining in both countries has remained relatively constant. “The numbers in themselves suggest large scale smuggling, but there is no need to rely solely on statistical inference.” A combination of high taxes, ineffective currency controls, bureaucratic ineptitude, and coruption, has driven Venezuela’s diamond dealers underground. Lax controls mean that the country's entire annual diamond production is smuggled out through Brazil, Guyana, Hong Kong, the United States, and Belgium.

KP or The Kimberley Process is a joint government, international diamond industry and civil society initiative that provided an international certification scheme that regulates the trade in rough diamonds. Its aim is to prevent the trade in conflict - with rough diamonds that are used by rebel movements to finance wars against legitimate governments.

Petroleumworld 11 07 06

ISSUES....

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