Summary: Pursuant to a congressional request, GAO: (1) analyzed South Africa's role in the world diamond market and the feasibility of imposing sanctions on South African diamonds; and (2) addressed the effect of U.S. sanctions on Namibia and the implication of removing those sanctions on the enforcement of the remaining sanctions on South Africa.
GAO found that: (1) a U.S. ban on South-African-origin diamonds would not hurt South Africa's economy because exports only accounted for about 2 percent of its total exports, and sales of diamonds to the United States represented an even smaller percentage; (2) sanctions against South-African-origin diamonds could prove difficult to enforce because the country of origin for individual diamonds cannot be detected by visual, chemical, or physical tests; (3) U.S. sanctions against Namibia had little economic effect because the United States had a very low volume of trade with Namibia prior to the sanctions' implementation; and (4) Namibia exports and imports through South-African-controlled ports, which allows South Africa the potential to evade sanctions by relabelling its exports and imports to indicate they originated in, or were destined for, Namibia.
