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USIS Washington File

07 October 1999

Sanctions Chairman Hails De Beers Decision on Angolan Diamonds

(Fowler says the step will hamper UNITA's ability to buy arms) (970)
By Judy Aita
Department of State Washington File Staff Correspondent
United Nations -- The decision by the South African diamond group De
Beers to stop buying diamonds from Angola is an important step in
curbing UNITA's source of revenue to continue the Angolan civil war,
the chairman of the Security Council's Angolan Sanctions Committee
said October 7.
De Beers said October 6 that it would stop buying diamonds from Angola
except for those originating under a preexisting contract it has with
a joint venture of the Angolan government and an Australian mining
company. In its announcement the company cited Security Council
resolution 1173, passed in 1998 -- which forbids the purchase of
diamonds from UNITA -- as the reason for its decision. It noted that
since the resolution was passed, De Beers' purchases of Angolan
diamonds on the open market have dropped to negligible levels.
In the past several months, the Security Council Sanctions Committee
has moved to ensure that U.N. sanctions against UNITA are enforced.
UNITA has used Angolan diamonds, which can easily be identified by
diamond experts, to finance the civil war. Canadian Ambassador Robert
Fowler, chairman of the sanctions committee, has been traveling
worldwide meeting with representatives of the diamond industry to urge
them to take more care to see that the embargo against UNITA is
observed.
Fowler called De Beers' decision an "enormously symbolic" move that
should "put a major crimp" in the rebel group's cash flow.
"The message will be received by other diamond companies and, indeed,
by the government of Angola and the world diamond markets in London,
Antwerp, Tel Aviv, and in Bombay. That will be very important," Fowler
said. "Frankly, I hope UNITA gets the message too."
"Diamonds are very important to the Angolan civil war equation," the
ambassador said. "This enormously high concentration of value
substance is ... extremely difficult to deal with. I don't think we're
going to stop cold anybody from buying UNITA diamonds. This step,
though, is going to put a major crimp in it."
"No one knows precisely how much of the diamond business De Beers
controls, but popular estimates are 65 to 75 percent," Fowler told
journalists. "For De Beers to decide no longer to buy Angolan
diamonds, period ... is hugely symbolic and has quite a lot implicitly
to say about the difficulty of managing this business in detail."
Since the sanctions resolution was passed, "De Beers has not been
knowingly buying UNITA diamonds and had been at pains to reject
certain packages of diamonds proposed for sale which they considered
in some manner suspect," Fowler noted. "But now what they've clearly
done is gone one step further in saying that they won't come close to
running that risk."
Fowler said that the Sanctions Committee has also been pushing the
Angolan government to improve its certificate of origin and "urging
them to clean up, tighten up the Angolan diamond market in general."
"It is not our intention to ruin the diamond industry," the ambassador
said. "It would be irresponsible to tar the entire industry for the
sake of UNITA diamonds."
Angolan diamonds account for approximately 6 percent of the world's
diamonds.
The Sanctions Committee estimates that three to five years ago, UNITA
was making between $300 million and $400 million a year for several
years from diamonds. But it estimates that those sales today have
fallen to perhaps $150 million to $200 million a year.
Nevertheless, the committee estimates that UNITA has earned from
$3,000 million to $4,000 million in diamonds over the course of the
civil war, and "that buys an awful lot of arms," Fowler said.
"Probably, UNITA was able to meet its arms requirements at less than
that and we can only assume that some of that money had been invested
at a time when a whole bunch of people were making a whole bunch of
money in investments."
That theory heightens the Sanctions Committee's interest in trying to
track UNITA investments and move to control those as well, the
chairman said.
The United States also is actively participating in the effort to cut
UNITA's sources of funds to buy weapons. Secretary of State Madeleine
Albright said recently that during her trip to Africa October 17-27
she will press for strong action to control small arms trafficking and
enforce UNITA sanctions.
Participating in a Security Council ministerial meeting on the
proliferation of small arms in September, Albright said that the
United States is behind the new push by the Sanctions Committee to
check UNITA's sale of diamonds to buy weapons to continue the fighting
in Angola.
"It is time to attack the economy of war that supports illicit arms
flows," the secretary said. "In many instances, these transactions are
fueled by sales of gemstones, precious metals, and narcotics."
"Too often, the profits fund violence and mayhem," Albright said.
"The United States accounts for 65 percent of the world's gemstone
market, and we recognize that we must do our part to end illicit
transactions," Albright said. "We hope to work here at the U.N. with
other nations, and industry, to strengthen certification regimes
worldwide."
"We want particularly to work with the diamond-producing countries to
make sure that their interests in strong, stable markets are
protected," the secretary said.
U.S. Ambassador Richard Holbrooke also emphasized the need to stop
UNITA's diamond sales during a Security Council meeting on Africa
September 29.
Holbrooke, who is the chief U.S. envoy to the United Nations, said
that the United States believes "we must attack the economic
structures that fuel the illicit arms trade -- the gray and black
markets in diamonds, precious metals, and narcotics."



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