August 06,2004

Grassley: Clean Diamond Trade Act Appears to be Working

M E M O R A N D U M

To: Reporters and Editors
Re: Conflict diamonds law
Da: Friday, Aug. 6, 2004

Sen. Chuck Grassley, chairman of the Committee on Finance, worked to help pass the Clean Diamond Trade Act in 2003. The bill, now law, is designed to help stop the trade of diamonds that fund violent civil conflicts in many African countries. The law implemented U.S. participation inthe Kimberley Process Certification Scheme for trade in rough diamonds. The Kimberley plan isan international agreement establishing minimal acceptable international standards for national certification relating to cross-border trade in rough diamonds. Now, according to media reports, the Congo Republic intends to try to restore order in its diamond trade after being dropped from the Kimberley Process list of legitimate diamond traders. Sen. Grassley made the following comment on this development.

“I’m pleased that the Congo Republic is pledging to take steps to help stop trade in conflict diamonds. When Congress passed the Clean Diamond Trade Act in 2003, we hoped it would helpeliminate trade in illegal conflict diamonds. It’s good news that the law appears to be working.” A Reuters story follows.

Congo halts gem exports after blood diamond ban

BRAZZAVILLE, Aug 6 (Reuters) -- Congo Republic has suspended diamond exports while it triesto put the trade in order after a global blood diamond watchdog removed the central African statefrom its list of members.

``All export activities have been suspended,'' Mines and Energy Minister Philippe Mvouo toldparliament late on Thursday.

``What has happened to us is disgraceful. It is a situation that has to be resolved... This is not acountry of hoodlums. It is a sovereign state.''

The Kimberley Process -- a certification scheme launched last year to provide guarantees thatmember countries were not dealing in diamonds which fuel armed conflicts -- struck Congo off itsmembership list in July.

It said authorities were unable to account for a massive discrepancy between the number of roughdiamonds being exported and the absence of any reported production or imports.

Mvouo said that in most diamond-producing countries in Africa, 80 percent of exports weretrafficked illicitly, and acknowledged that artisanal producers in Congo were neither organised norcontrolled.

He said taxes on diamond production and exports earned Congo between 200 million and 400million CFA francs ($368,000 to $736,000) each year.

President Denis Sassou Nguesso has pledged to restore order in the country's diamond trade,promising that ``those who have fished in troubled waters'' would be rooted out and punished.

The Kimberley Process was set up in response to conflicts in African states such as Sierra Leone,Angola and the Democratic Republic of Congo, where armed groups fought to control diamond areasand sold the gems to fund their campaigns.

Congo Republic's exclusion means its diamonds cannot be traded in any of the Kimberley Process's43 member states, which account for over 98 percent of the world's diamond trade.