Buyer Beware: Green Diamonds

Posted on Saturday, June 13th, 2015 at 3:47 pm by Diamond Jim

Photo: Inside a polish and cutting shop in Harare, a Zimbabwean worker holds a piece of rough diamond from the country’s Marange diamond fields.

Green Diamond.jpg

BUYER BEWARE:     G R E E N   D I A M O N D S

By Shuan Sim, Rapaport Diamond Report, 06-12-15

Wholesalers attending a seminar at the Natural Color Diamond Association (NCDIA) in New York City expected to find out whether Zimbabwe green diamonds bearing Kimberley Process (KP) certification made them legal to trade.  Instead, they learned that U.S. sanctions against the country made all diamonds from Zimbabwe—not just the green—off limits, regardless of whether or not they were KP certified.  In 2003, then-President George W. Bush signed an executive order for economic sanctions against Zimbabwe President Robert Mugabe, other individuals and companies.  The sanctions were a response to the human rights violations by the Mugabe government, suspected money laundering and alleged funding of terrorist activities.  Around that time, the European Union (EU) had imposed similar sanctions against Zimbabwe. As the majority of the country’s diamond production came under Mugabe’s control, the sanctions effectively stopped diamond trading between Zimbabwe, the EU and the U.S.  About ten years later, the EU, pushed by Belgium, lifted the bans on Zimbabwe’s diamond mining firms.  However, the U.S. kept its sanctions in place.

Many seminar attendees asked speakers Cecilia Gardner, president, chief executive officer(CEO) and general counsel of the Jewelers Vigilance Committee (JVC),and Tom Gelb, educational director of NCDIA, what they could do to protect themselves. “The first thing is to ask for a certificate,” said Gardner.  The onus is on the buyer to make sure that not only is the green diamond KP compliant, as the U.S. is a member of  the agreement, but that the buyer should also ensure that the stone did not come from Zimbabwe. RAREBUT INCREASINGLYPOPULAR Green diamonds are exceedingly rare.  According to Gelb, Zimbabwe accounts for as much as half of global green diamond production.  There has also been a dramatic increase in production because of increased activity in Zimbabwe’s Marange region.  Guyana and Brazil are the other large producers of green diamonds.   Green diamonds started to take off in late 2014, when celebrities were seen sporting emeralds on the red carpet. “Diamond dealers started thinking that if emeralds were popular, why not green diamonds?  We started having people asking us where to source for green diamonds and for the price range,” said Gino DiGeso, director of NCDIA. Over time, industry players became aware of the issues involved in dealing in green diamonds: Namely, the fact that green diamonds were likely to have come from Zimbabwe and that they were illegal.  “NCDIA members would ask, ‘Are we allowed to deal with these goods?’ and ‘ Are they okay if they were KP certified?’” said Gelb, adding that the members mostly asked about  the KP process.  He said that knowledge of the U.S. sanctions against Zimbabwe was scant.  “You have to go searching for it to even know about it,”said Gelb.  Wholesalers have to be extra cautious when dealing in green diamonds or risk violating U.S. sanctions against Zimbabwe.

 



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