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Angola Claims No Loopholes in Diamond System - 2001-08-05

Angolan government authorities reject charges that rebel diamonds can be laundered through loopholes in the country's new diamond buying system. But there is startling new insider information to support the diamond-laundering charge.

An Angolan government document obtained by VOA explains why authorities in Luanda dispute suggestions that their country remains a source of so-called "conflict diamonds."

The document, dated in October 2000, claims there are none because the UNITA rebel movement has collapsed. It contends Angola's armed forces, in the words of the document "have regained control" of the whole country.

Analysts describe the claim as preposterous. Even Angolan state-controlled news media continue to report on rebel activities.

But perhaps more significantly, sources inside Angola's government-controlled Ascorp diamond-buying monopoly admit diamonds mined by UNITA supporters are still moving through the state purchasing system.

These sources, speaking on condition of anonymity, also say that despite Ascorp's public position, the firm has never considered its main duty to be halting the trade in conflict diamonds. Instead, they say its primary function is to boost state revenue from the diamond industry.

Ascorp's annual report confirms it was created in February of last year to increase the income out of diamond trading in Angola.

But it goes on to add - Ascorp was also established to control the identity and authenticity of diamonds in Angola and to make sure this industry will not sponsor illegal activity.

Despite this, independent investigators tell VOA they have uncovered a number of flaws, especially with Angola's so-called Certificates of Origin system for diamonds.

Among the problems are what they term "conflicting standards" in the issuance of such certificates. They cite cases in which different stamps of approval are used and in which different people have signed certificates without explicit approval. They also say some certificates have been issued with unrecognizable signatures.

The investigators suggest possible high-level collusion in the issuance of questionable certificates. Among those who investigators say have access to the certificate process is the daughter of Angolan President Jose Eduardo Dos Santos, Isabel Dos Santos. Sources say she has a variety of diamond industry interests.

A previous VOA report quoted diplomats and diamond industry sources as saying rebel diamonds could still be laundered through the Angolan system. For example, by rebels paying local businessmen with diamonds for supplies and these businessmen then selling the diamonds as their own to the state-buying organization.

In response, Angola's Ministry of Geology and Mines hand-delivered a three-page statement to the VOA office in Luanda. In it, the ministry said there was no foundation for allegations that the system allowed for the laundering of diamonds.

The Ministry also challenged allegations that diamond revenues were not all reaching government coffers. The initial VOA report quoted a foreign diamond executive as alleging some taxes were being deposited into a private account controlled by the Deputy Minister of Geology and Mines.

The ministry statement did not specifically deny that allegation. It said only that tax collection was the responsibility of the Ministry of Finance.

The ministry statement challenged the accuracy of diamond export statistics cited in the VOA report, which it said were in conflict with those in existence in the public domain.

But the only useable statistics made public on the government's official web-site date back to 1992.

The Ministry failed to offer VOA any statistics of its own. It also did not respond to a formal VOA request for data or for an interview to discuss diamond-related issues.

The U.N. Monitoring Mechanism on UNITA sanctions also declined to respond to questions about a recent fact-finding mission it undertook to Angola to look into diamond-related issues.