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CAR Announces Diamond-Buying Reforms
Oct 3, 2019 10:49 AM
By Rapaport News
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RAPAPORT... The Central African Republic (CAR) on Thursday unveiled a program to overhaul its diamond sector, with the goal of increasing its export revenue.
Diamond buyers operating in the country must pledge to improve transparency and meet the due-diligence guidelines set out by the Organisation for Economic Co-operation and Development (OECD), according to a decree President Faustin-Archange Touadéra signed last week.
The buying houses, which are predominantly small operators that purchase rough from informal miners, must also declare at least $3 million worth of exports each quarter. The government will withdraw the license of the buying house if it doesn’t meet that minimum requirement, explained a statement issued by the special adviser for diamonds to the president.
CAR has seen its official exports slump from 113,000 carats in 2017 to just 12,000 carats in 2018, the statement noted.
An estimated 90% of the country’s annual production is smuggled out, according to Stéphane Fischler, president of the World Diamond Council (WDC), which represents the trade at the Kimberley Process (KP). He warned that the industry may be supporting criminal gangs when it buys CAR rough that is not certified by the KP.
The KP has approved six “green zones” in the western part of CAR, from which rough diamonds can be exported. However, much of the mining takes place in the east, where the government has struggled to maintain control over rebel groups.
Although the parties signed a peace agreement in February, only diamonds from the government-controlled zones meet the KP’s minimum requirements for export. Still, a large proportion of rough from the authorized western areas is also said to be smuggled out, as dealers use their licenses to gain a foothold in the country but declare only a small amount, sources told Rapaport News.
The new decree is designed to incentivize buyers to formalize their operations and increase exports through official channels. Buying houses have until December 31 to meet the conditions that will enable them to enter a new licensing contract with the government, guided by the OECD sourcing protocols.
Image: President Faustin-Archange Touadéra. (Lawrence Jackson)
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Tags:
car, Central African Republic, diamonds, Faustin Archange-Touadéra, Kimberley Process, Rapaport News
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