Report: 20% of Guyana’s Rough Diamonds Smuggled Out

As much as 20 percent of the diamonds mined in Guyana are smuggled to Brazil, mixed with Venezuelan diamonds, and laundered back out through Guyana, evading the Kimberley Process Certification Scheme (KPCS).

According to a report by Partnership Africa Canada (PAC), despite Guyana’s good internal controls, as much as 20 percent of its $43 million diamond production are smuggled to the nearby Brazilian border town of Boa Vista, where they are mixed with Venezuelan diamonds and laundered back out through Guyana.

The report, Triple Jeopardy – Triplicate Forms and Triple Borders: Controlling Diamond Exports from Guyana, blames the cross-border diamond smuggling on weak controls in Brazil and Venezuela. The report further warns that the lax controls make the entire diamond industry and the KPCS vulnerable to infiltration from Conflict Diamonds.

“In Guyana, Brazil and Venezuela, the certificates can have little meaning when smuggling is so rampant,” says Ian Smillie, Research Coordinator for Partnership Africa Canada.

“The situation in the tri-border area of those countries undermines the global Kimberley control system and makes the diamond industry wide open to laundered conflict diamonds from other countries, such as Cote d’Ivoire and the Democratic Republic of the Congo.”

PAC calls for the expulsion of Brazil and Venezuela from the world diamond trade body if they cannot immediately bring their diamond industries into proper compliance with the KPCS.

In an earlier report this year, Fugitives and Phantoms: The Diamond Exporters of Brazil, PAC detailed corruption, fraud and mismanagement in Brazil’s diamond industry. Since then, PAC say, all diamond exports from Brazil have been suspended.

The full report is available here.