Diamonds and Conflict: Background, Policy, and Legislation (CRS Report for Congress)
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| Release Date |
Revised July 16, 2003 |
| Report Number |
RL30751 |
| Report Type |
Report |
| Authors |
Nancy Cook, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
In several diamond-rich countries affected by armed conflict, notably in Africa, belligerents have
funded their military activities by mining and selling diamonds, and competition over the use and
control of diamond wealth has contributed significantly to the depth and extended duration of these
conflicts. Diamonds used in this fashion, labeled "conflict diamonds," were estimated to have
comprised an estimated 3.7 % to 15% of the value of the global diamond trade in 2000. The present
volume of such trade appears is difficult to estimate. Several diamond-related conflicts have ended,
but others have burgeoned. Policy makers' attention has also increasingly focused on the possible
role that diamonds may play in the financing of terrorist operations.
In response to public pressure to halt trade in conflict diamonds, and due to the persistence of
several diamond-related conflicts, governments and multilateral organizations have pursued efforts
to end such trade. Several international policy forums, national legislatures, and diverse private
parties have proposed various reforms and legislation to achieve such goals. Effective regulation of
the diamond trade is difficult. Diamonds are a highly fungible, concentrated form of wealth, and the
global diamond industry is historically insular and self-regulating. The illicit diamond trade exploits
these factors. Proposals to end illicit trading generally center on legally identifying the origin of
diamonds and requiring the registration, identification, and monitoring of cross-border trade in
diamond, as is common for trade in other goods. Methods for achieving such ends include the
cataloging of unique physical diamond features; the "tagging" of diamonds with minute markings;
and the creation of certification-of-origin laws to document the origin of diamonds.
The Clinton Administration worked to create a certificates of origin-based international
diamond trade regime, but sought to ensure that such efforts would not negatively affect the
legitimate industry. It also backed marketing reforms and regulatory capacity building in
diamond-rich African countries, consulted with the diamond industry, pushed for U.N. sanctions to
end the conflict diamond trade, and created an inter-agency group on conflict diamonds. The Bush
Administration has pursued policies that broadly mirror those of its predecessor.
The United States participates in the Kimberley Process Certification Scheme, a global diamond
trade regulation framework. The Administration began implementing the Scheme in the United
States with voluntary interim compliance measures, prior to the passage of H.R. 1584
(see below). Several congressional hearings have addressed trade in conflict diamonds. Potential
links between terrorism financing and trade in diamonds have garnered increasing congressional
attention. The 106th and 107th Congresses considered several diamond-related bills. The 108th
Congress passed H.J.Res. 2 in February 2003; it contained several conflict
diamond-related provisions. Other conflict diamond bills introduced in the 108th Congress include
H.Con.Res. 239 (Watson); S. 760 (Grassley), H.R. 1415
(Houghton), and H.R. 1584 (Houghton). The latter three bills shared many goals in
common with H.R. 1584 , an amended version of which was passed by both chambers
and signed into law by President Bush, becoming P.L. 108-19 .
