India Warned Over Importing Roughs From Zimbabwe.

Indian diamantaires are in a big dilemma. Even though the Kimberley Process Certification Scheme (KPCS) has cleared rough diamonds from Zimbabwe, they will not be able to import them because the US and EU have warned against such transactions. KPCS is the process designed to certify the origin of rough diamonds from sources which are free of conflict funded by diamond production.

The process was established in 2003 to prevent diamond sales from financing rebellious movements. The certification scheme aims at preventing "blood diamonds" from entering the mainstream rough diamond market. It was set up to assure consumers that by purchasing diamonds they were not financing war and human rights abuses.

The US and the European Union (EU) have warned that it will publish the names of those taking delivery of the Zimbabwe goods on their government website and that the Office of Foreign Assets Control (OFAC), which administers all US sanctions procedures, will scrutinize these transactions.

The warning has come after KPCS chairman Mathieu Lapfa Lambang Yamba of the Democratic Republic of Congo (DRC) allowed the resumption of rough diamond exports from Zimbabwe's Mbada and Canadile fields on Monday without consulting US and EU which are KPSC members. The Indian gems and jewellery industry, worth $30 billion, is not in a position to overrule the fresh warnings as 60% of their goods are exported to the US and the UK.

The Gems and Jewellery Export Promotion Council (GJEPC) organised an urgent meeting at its Mumbai headquarters on Tuesday after the ministry of commerce passed on the warning issued by the US and EU .

"The situation is now very fluid and we have to be extremely cautious," said Sanjay Kothari, vice-chairman of GJEPC. "There is no question of going against the warning issued by US and the EU for the sake of a billion dollar worth of annual rough diamond supplies from Zimbabwe. The industry cannot put 60% of its gems and jewellery trade with US and EU at stake," added Kothari.

According to Kothari, notice will be issued to all the GJEPC members to stay away from dealing in rough diamond imports, until the issue between the KP chairman and the governments of U.S and EU over Zimbabwe is not resolved.

Jewellers of America (JA) and the Diamond Manufacturers and Importers of America (DMIA) have issued statement to all their members in India that they require to provide additional written reassurances, beyond the World Diamond Council's (WDC) system of warranties statement, that the diamonds they supply have not been obtained in violation of applicable national laws and have not originated from Marange in Zimbabwe.

"More than half of the gems and jewellery trade is with U.S and EU. However, we have to forget about Zimbabwe at the moment and wait for a concrete settlement," said a DTC sightholder, requesting anonymity.

Source : timesofindia.indiatimes.com