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Angola Monopoly Rejects Accusations of Illegal Diamond Trafficking - 2002-04-11

Angola's state-controlled diamond-marketing monopoly is rejecting charges of involvement in improprieties, including illegal diamond trafficking.

Sources close to the Angola Selling Corporation or ASCorp are angrily accusing local officials and international diamond industry rivals of undermining the monopoly's efforts to control the diamond trade in Angola.

These sources, speaking on condition of anonymity, point to the recent charge by officials of Angola's ruling MPLA party in the diamond-rich province of Lunda Norte. The officials accused ASCorp of illegal trafficking and certifying miners with what were considered dubious pasts. They also complained about a lack of access to mining data and what they considered insufficient royalty payments.

The sources tell VOA these local officials, and others in Angola, have been angered by the establishment of the ASCorp monopoly. They say the officials have, in the words of one source, "been cut out of the action", a reference to years of corruption in the Angolan diamond industry.

"ASCorp has more enemies than you can imagine," says the un-named source. He says these include not only government and ruling party officials but also independent miners, who no longer have the freedom to chose where they sell precious gems.

The source says major international diamond industry institutions also feel threatened because there is now the prospect of increased diamond production from Angola, not only because of diamond controls but also because of the advent of peace, a reference to the recent cease-fire between the government and the UNITA rebels.

"This cease-fire in Angola," the source said, "is potentially a great threat to the likes of DeBeers because what it means is that Angola now has the opportunity to produce more diamonds and flood the international market and reduce prices. These big companies are naturally threatened by peace in Angola, ironic though that may be."

ASCorp is 51 percent owned by the government of Angola and 49 percent owned by foreign shareholders. The monopoly, formed two years ago, has increased tax collections to the government dramatically, yielding over $60 million in taxes last year.

ASCorp has also been credited with curbing smuggling and other industry abuses although the firm itself has conceded some smuggling continues to occur.