GGMC seizes 4000 carats diamonds -may have been smuggled

http://www.stabroeknews.com/index.pl/article?id=56531604

GGMC seizes 4000 carats diamonds
-may have been smuggled
By Nigel Williams
Stabroek News, Tuesday, October 23rd 2007

The Guyana Geology and Mines Commission (GGMC) yesterday seized around
4,000 carats of suspected smuggled diamonds bound for Dubai following
cross-checking of documents which showed irregularities in the
paperwork.

Stabroek News was told that executives of the Belgian company, Explorer
Trade and Commerce Limited could be charged with breaching laws and
regulations governing trade in the precious stones. General Manager of
the Company Yuri Zaprudnov, while refusing to comment on the matter
acknowledged that there were some differences between his firm and the
GGMC. He said that in time he will give his side of the story. "I have
no comment to make on the issue…when the right time comes I will let
you know," Zaprudnov told Stabroek News in the compound of his Lama
Avenue, Bel Air, Georgetown office.

He said that it was the first time in the seven years his firm has been
operating in Georgetown that they had had such problems. "We had no
problem with the people before," Zaprudnov, who said that his firm
deals mainly in the exportation of diamonds, declared. Commissioner of
the GGMC, William Woolford could not be reached for a comment but
sources close to his office disclosed that the company submitted
documents for the export to the GGMC and on checking the GGMC was not
satisfied with the paperwork. This led to the inspection of the
precious stones. When the diamonds were inspected it was found several
pieces that were uncut might not have originated from Guyana. "We have
warned them and we intend to prosecute," the GGMC source who asked to
remain anonymous said. Stabroek News understands that the company has
been maintaining that the diamonds were mined here. However, sources at
the GGMC said mining inspectors visited the area where the company
claimed they extracted the precious stones but found no sign of this.

Guyana is a signatory to the Kimberly Process Certification Scheme
(KPCS). The KPCS originated from a meeting of Southern African diamond
producing states in Kimberley, Northern Cape in May 2000. In order for
a country to be a participant, it must ensure that any diamond
originating from the country does not finance a rebel group or other
entity seeking to overthrow a UN-recognized government. KPCS also
mandates that every diamond export be accompanied by a Kimberley
Process certificate proving that no diamond is imported from, or
exported to, a non-member of the scheme. A report from diamond industry
watchdog, Partnership Africa Canada (PAC) last year had said that as
much as 20 per cent of diamonds mined in Guyana are smuggled to Brazil,
mixed with diamonds from Venezuela and laundered back through Guyana,
evading the Kimberley Process Certification Scheme (KPCS). The report
said that although Guyana has good internal controls through the GGMC,
as much as 20 per cent of the US$43M diamond production is smuggled to
the Brazilian border town of Boa Vista, where they are mixed with
Venezuelan diamonds which are then 'cleansed' through Kimberley
Certifi-cation documentation in Guyana before they are exported. The
report had blamed the cross-border diamond smuggling on the weak
controls in Brazil and Venezuela. The report further warned that the
lax controls make the entire diamond industry and the KPCS vulnerable
to infiltration from Conflict Diamonds from some war-torn African
nations.

The PAC in the report had said that it estimates the volume of
Venezuelan diamonds entering Guyana on a yearly basis to be somewhere
between 50,000 to 100,000 carats out of total production figure upward
of 400,000 carats. These diamonds would have come through diamond
dealers in Brazil, the report summed up. "As a result of the
investigative work in Brazil and Venezuela, PAC believes that
significant numbers of Venezuelan diamonds are entering Guyana, and
being exported with Guyanese Kimberley Process certificates", the
report said last year.

In an interview with this newspaper in January Woolford had posited
that the GGMC has been vigilant with the trade of its diamonds long
before the advent of the KPCS and insisted that there was no indication
that blood diamonds were coming to Guyana from any of the conflict
diamonds-reputed Afri-can nations like Sierra Leone, the Democratic
Republic of Congo or the Ivory Coast.

Prime Minister, Samuel Hinds who has responsibility for mining, when
contacted yesterday afternoon, told this newspaper that he was not
briefed on the issue. He however declared that if indeed the GGMC had
intercepted such an export then it was good news for Guyana. "GGMC
ought to be commended for keeping an eye out on diamonds leaving this
country that was not extracted here," Hinds told Stabroek News at his
Wight's Lane, Kingston office yesterday afternoon. He said it was hoped
that this seizure will not put a bad label on diamonds leaving Guyana.
Asked whether government was aware of diamond traders smuggling the
precious stones to this country before exporting them, Hinds said both
the GGMC and the administration were aware. He said only about 15
months ago the GGMC had seized a quantity of diamonds that were not
sourced here from a company. The PM could not provide further details
on what eventually happened to the company, but he hinted that there
were rules which would allow government to seize and impose fines on
defaulters. According to the Prime Minister there was also provision
for the revocation of the licences of companies found with diamonds
that were not extracted here.

In 2004 diamond production reached an all-time high of 425,000 carats
while diamond declaration in 2002 and the years before was at least 50
per cent less. The Prime Minister said that production has since
dropped to around 300,000 carats.