March 17, 2006

Report Calls for Investigation into Illegal Brazil Diamond Trade

Following the arrest of 10 people involved in Brazil's diamond industry last month, a group monitoring the illegal trade of diamonds has issued a report calling for the halt of diamond exports from the country and an investigation into Brazil's inspection system, according to the Financial Times.

Partnership Africa Canada (PAC), an organization based in Ottawa, Canada, concludes in a report that half of Brazil's diamonds originate from "fraudulent or highly suspect sources." The report also estimates that about half of the certificates issued under the UN-backed Kimberley Process program are false. The Kimberley Process helps participating countries implement internal controls, typically through certificates of origin for rough diamonds, to prevent the trade in conflict diamonds.

PAC's report published last year, which uncovered that large quantities of diamonds were being attributed to fake mining companies and untapped mines, led to an investigation by Brazilian law enforcement that ended in the 10 arrests, including that of a senior official in Brazil's government mining agency.

Officials from the Kimberley Process plan to visit Brazil next month to work with Brazilian authorities to investigate the claims issued in PAC's report.



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