Source: Corriere della Sera

Executive Summary 1-50

A. General 51-57

B. The Work of the Panel 58-63

C. Standards of Verification 64

D. A Reminder 65

I. SIERRA LEONE DIAMONDS

A. Background 66-67

B. Diamonds in the RUF 68-78

C. Estimated Volume of Diamonds Mined by the RUF 79-81

D. How the RUF Move Diamonds out of Sierra Leone 82-90

E. Foday Sankoh’s Post-Lomé Diamond Business 91-99

F. Sierra Leone’s New Diamond Certification System 100-110

G. Conclusions on Sierra Leone Diamonds 111-112

II. INTERNATIONAL DIAMOND STATISTICS AND TRANSIT COUNTRIES

A. General 113-115

B. Provenance and Origin 116-122

C. Case Studies: Liberia, Gambia, Guinea and Côte d’Ivoire 123-141

D. Conclusions on Statistics and Transit Countries 142-144

III. ‘CONFLICT’ DIAMONDS AND ‘ILLICIT’ DIAMONDS

A. The Issue 145-150

B. Conclusion on Conflict versus Illicit Diamonds 151

IV. A FINAL NOTE ON DIAMONDS

A. Some Recommendations from Sierra Leone 152-153

B. Further Research 154-155

V. RECOMMENDATIONS ON DIAMONDS 156-167

I. WEAPONS AND THE RUF

A. Background 168-177

B. Sources of RUF Weaponry Within Sierra Leone 178-180

II. LIBERIAN SUPPORT TO THE RUF

A. General 181-183

B. Training 184-192

C. Safe Haven 193

D. Weapons and Related Matériel 194

III. THE ROLE OF OTHER COUNTRIES 195-198

IV. THE ROLE OF AIRCRAFT IN SUPPLYING THE RUF

A. Direct Flights into RUF Territory 199-202

B. Weapons Flights into Liberia 203-212

C. The Inner Circle of the Taylor Regime 213-218

V. LIBERIA AND INTERNATIONAL TRANSPORT NETWORKS

A. General 219-221

B. Aircraft Registered in Liberia 222-224

C. Key Individuals in Liberia’s Aviation Registry 225-235

D. Offices in the United Arab Emirates 236-237

VI. OTHER ISSUES

A. The Role of Customs in Exporting and Transit Countries 238-240

B. The Role of Airport Authorities and Inspectors 241-243

C. The Non-observance of Moratoria and Embargoes 244-246

D. Further Research 247-252

VII. CONCLUSIONS REGARDING WEAPONS AND THE RUF 253-255

VIII. RECOMMENDATIONS ON WEAPONS,

TRANSPORT & AIR TRAFFIC CONTROL 256-269

IX. CONCLUDING RECOMMENDATIONS 270-273

I. BACKGROUND 274-277

II. AIR TRAFFIC SYSTEMS IN WEST AFRICA

A. Air Traffic Management 278-280

B. Communications 281-285

C. Navigation 286-287

D. Surveillance 288-294

III. THE ROBERTS FIR

A. General 295-303

B. Guinea 304-308

C. Sierra Leone 309-310

D. Liberia 311-313

IV. CONCLUSIONS 314-315

1. Appointment Letter of the Expert Panel
2. Meetings and Consultations
3. Key Figures in the RUF
4. A Sample Communication on Aircraft from Guinea
5. A Note from the Sierra Leone Airports Authority

1. Diamonds have become an important resource for Sierra Leone’s Revolutionary United Front (RUF) in sustaining and advancing its military ambitions. Estimates of the volume of RUF diamonds vary widely, from as little as $25 million per annum to as much as $125 million. Whatever the total, it represents a major and primary source of income for the RUF, and is more than enough to sustain its military activities.

2. A certain volume of RUF diamonds are traded in Kenema and elsewhere in Sierra Leone. These are most likely smuggled out of the country. Some RUF diamonds have also been traded informally in Guinea. But the bulk of the RUF diamonds leave Sierra Leone through Liberia. The diamonds are carried by RUF commanders and trusted Liberian couriers to Foya-Kama or Voinjama, and then to Monrovia. Such trade cannot be conducted without the permission and the involvement of Liberian government officials at the highest level. Very little Liberian trade, in fact, whether formal or informal, takes place without the knowledge and involvement of key government officials. This is true of all imports, and where exports are concerned, it is especially true of diamonds

3. The Lomé Peace Agreement appointed Foday Sankoh Chairman of the Commission for the Management of Strategic Mineral Resources (CMRRD). Between the time he returned to Sierra Leone in 1999 and the resumption of hostilities in May 2000, the Commission never actually functioned, but Foday Sankoh spent money lavishly, without an obvious source of income. Sankoh was, in fact, encouraging a wide variety of potential foreign investors, many thinking they would reap exclusive benefits from the same things. A picture emerges of a double-dealing leader, clutching at financial opportunities for personal and political gain, outside of the governmental framework in which he was ostensibly working. Most of this related to the diamond trade.

4. The report comments on Sierra Leone’s new certification system. Where the RUF’s conflict diamonds are concerned, the legitimate export system is largely irrelevant. As long as there are no controls in neighbouring countries, the RUF will continue to move their diamonds out with impunity. For this reason, it is imperative that a standardized global certification scheme be introduced as soon as possible.

5. A major difficulty in tracking the movement of rough diamonds, whether conflict or otherwise, is the inconsistent manner in which the governments of major trading centres record diamond imports and exports. One issue has to do with the general availability of statistics. Another has to do with a distinction made between ‘country of origin’ and ‘country of provenance’. Country of provenance refers to the country from which diamonds were last imported; country of origin indicates where they were mined. Until recently, little serious attention was paid anywhere to the issue of where diamonds were actually mined. The result is a wide range of anomalies. For example, 41 per cent of British rough diamond imports in 1999 were said to originate in Switzerland, while Switzerland officially imports almost no rough diamonds at all. This is a consequence of diamonds passing through Swiss free trade areas, until recently without record and without serious government oversight.

6. In its search for conflict diamonds from Sierra Leone, the Panel discovered that there is a much greater volume of ‘illicit’ diamonds, and that distinguishing between the two is extremely difficult. A large volume of diamonds entering Europe is disguised as Liberian, Guinean and Gambian in order to evade taxation and launder money. The report describes flagrant examples in Belgium of fraudulent commercial reporting. A country like Liberia, whose name has been used with or without its knowledge by illicit traders, can thus conceal its own very real trade in illicit and conflict diamonds behind larger rackets being perpetrated by others.

7. In order to better regulate the flow of rough diamonds from producing countries, a global certification scheme based on the system now adopted in Sierra Leone is imperative. It will give added impetus to current discussions on this subject if the Security Council endorses the concept of a global system.

8. In the short run, and in the absence of a global system, it is recommended that certification systems similar to that adopted by Sierra Leone, be required of all diamond exporting countries in West Africa, with special and immediate reference to Guinea and Côte D’Ivoire, as a protective measure for their indigenous industries and to prevent their exposure to conflict diamonds. If this has not been completed within a period of six months, the Security Council should impose an international embargo on diamonds from these countries.

9. The Panel further recommends a complete embargo on all diamonds from Liberia until Liberia demonstrates convincingly that it is no longer involved in the trafficking of arms to, or diamonds from, Sierra Leone. The ban should not be lifted until this condition has been met, and until Liberia too has joined the proposed standardized certification system.

10. The Security Council should place an immediate embargo on trade in all so-called Gambian diamonds until such time as its exports of diamonds can be reconciled with imports.

11. Other diamond exporting countries in the region have been designated by the Belgian government as ‘sensitive’ countries, where special attention to imports is required. In addition to the three countries suffering directly from conflict diamonds and those mentioned above, these include Uganda, Central African Republic, Ghana, Namibia, Congo Brazzaville, Mali, Zambia and Burkina Faso. This list is commended to other major importing countries, including Switzerland, South Africa, India, Israel, the United Kingdom and the United States. Invoices from these countries need to be thoroughly checked, and where there is doubt about either provenance or origin, parcels should be seized until the authorities have checked the facts. Delays in processing will increase the cost of doing business and will encourage better paper work. Forfeiture of improperly labelled goods will discourage the habit decisively*.

12. Urgent attention should be given to extending a Sierra Leone-style certification system to these countries as soon as possible.

13. The United Nations, the World Diamond Council and the import control authorities of all rough diamond importing countries should be vigilant for other exporting countries, or for countries in the future, where trade in diamonds has little to do with domestic production or legitimate trading.

14. It is essential, and a matter of urgency, that major trading centres (Belgium, the United Kingdom, Switzerland, South Africa, India, the United States and Israel) come to a common agreement on the recording and public documentation of rough diamond imports that is consistent from one country to another, and that clearly designates the country of origin in addition to country of provenance.

15. An annual statistical production report should be compiled by each exporting country and gathered into a central annual report, compiled by the World Diamond Council and/or by the certification body that is expected to emerge from the ‘Kimberly Process’ of intergovernmental negotiation. Countries of origin must be distinguished from countries of provenance.

16. If diamonds are mixed and/or re-invoiced in a free trade zone, it is imperative that the government of that country take responsibility for verifying the bona fides of the diamonds before they are re-exported. This is especially important with regard to Switzerland because of the large volumes that pass through its Freiläger, losing their identity in the process. The same is true of the United Arab Emirates. In other words, all countries importing rough diamonds must be part of the anticipated ‘rough controls’ system.

17. Throughout its work, the Panel was struck by the widespread breaking of UN Security Council sanctions on both weapons and diamonds. If existing and future sanctions are to be effective, the Security Council will require an on-going capacity to monitor their observance and conduct research. Where diamonds are concerned, there have been three Expert Panels examining many of the same issues concurrently. There has been useful collaboration, but there has also been overlap and duplication. Considering the complexity and the changing nature of the conflict diamond issue the Panel recommends that in future, it would serve the Security Council better to have an on-going focal point within the UN to monitor adherence to sanctions, as well as progress towards the goals stated in the December 1, 2000 General Assembly resolution on conflict diamonds.

18. The attention of the Security Council, the Government of Sierra Leone, donor agencies and other interested parties is drawn to observations contained in the report about the need for probity and transparency. Without serious reform and due diligence within government and government agencies in Sierra Leone, international efforts to assist will be wasted.

19. Despite an ECOWAS-Moratorium on arms shipments to West Africa, the region is awash with small arms. Guerrilla armies receive weapons through interlinked networks of traders, criminals and insurgents moving across borders. Systematic information on weapons smuggling in the region is non-existent, and information that could be used to combat the problem on a regional scale - through ECOWAS or through bilateral exchanges - is generally not available. Few states in the region have the resources or the infrastructure to tackle smuggling.

20. In Sierra Leone, the RUF depends almost exclusively on light weaponry, although it does have access to more sophisticated equipment. It has captured many weapons during confrontations with the Sierra Leone Army, ECOMOG and UNAMSIL forces. The Panel, however, found unequivocal and overwhelming evidence that Liberia has been actively supporting the RUF at all levels, in providing training, weapons and related matériel, logistical support, a staging ground for attacks and a safe haven for retreat and recuperation, and for public relations activities.

21. There is also conclusive evidence of supply lines to Liberia through Burkina Faso. Weapons supplied to Burkina Faso by governments or private arms merchants have been systematically diverted for use in the conflict in Sierra Leone. For example, a shipment of 68 tons of weapons arrived at Ouagadougou on 13 March 1999. They were temporarily off-loaded in Ouagadougou and some were trucked to Bobo Dioulasso. The bulk of them were then trans-shipped within a matter of days to Liberia. Most were flown aboard a BAC-111 owned by an Israeli businessman of Ukrainian origin, Leonid Minin. Details of the flights and dates are included in the report.

22. The role of aircraft in the RUF’s supply chain is vital, especially over the past two years as their sphere of influence in Sierra Leone has widened. It is known that the RUF were supplied by helicopter on a sporadic basis before 1997, and on a regular basis since then. Helicopters originating in Liberia land at Buedu, Kailahun, Makeni, Yengema, Tumbudu and elsewhere in Kono District.

23. President Charles Taylor is actively involved in fuelling the violence in Sierra Leone, and many businessmen close to his inner-circle operate on an international scale, sourcing their weaponry mainly in eastern Europe. One key individual is a wealthy Lebanese businessman named Talal El-Ndine. El-Ndine is the inner-circle’s paymaster. Liberians fighting in Sierra Leone alongside the RUF, and those bringing diamonds out of Sierra Leone are paid by him personally. The pilots and crew of the aircraft used for clandestine shipments into or out of Liberia are also paid by El-Ndine.

24. Regional air surveillance capacities are weak or totally inadequate in detecting, or in acting as a deterrent to the arms merchants supplying Liberia and the RUF. Weak airspace surveillance in the region in general, and abusive practices with regard to aircraft registration, create a climate in which arms traffickers operate with impunity.

25. Because of its lax licence and tax laws, Liberia has for many years been a flag of convenience for the fringe air cargo industry. Liberia also has lax maritime and aviation laws that provide the owners of ships and aircraft with maximum discretion and cover, and with minimal regulatory interference. A schedule of Liberian-registered aircraft provided to the Panel by the government listed only 7 planes. No documentation was available on more than 15 other aircraft identified by the Panel. Many aircraft flying under the Liberian flag, therefore, are apparently unknown to Liberian authorities, and are never inspected or seen in the country.

26. In November 1999, a Kenyan national named Sanjivan Ruprah was authorized by the Liberian Minister of Transport to act as the ‘Global Civil Aviation agent worldwide’ for the Liberian Civil Aviation Regulatory Authority, and to ‘investigate and regularise the ... Liberian Civil Aviation register’. During its visit to Liberia the Panel asked the Transport Ministry, the Ministry of Justice and police authorities about Ruprah and his work, but was told that he was not known to them. Ruprah is, in fact, a well-known weapons dealer. He travels using a Liberian diplomatic passport in the name of Samir M. Nasr, and carries additional authorization from the Liberian International Ship and Corporate Registry.

27. Victor Bout is a well-known supplier of embargoed non-state actors - in Angola, the Democratic Republic of the Congo and elsewhere. He oversees a complex network of over 50 planes and multiple cargo charter and freight-forwarding companies, many of which are involved in shipping illicit cargo. Bout has used the Liberian aviation register extensively, operating mainly out of the United Arab Emirates. Sharjah Airport is used as an ‘airport of convenience’ for planes registered in many other countries. One of Bout’s aircraft, an Ilyushin 76, was used in July and August 2000 for arms deliveries from eastern Europe to Liberia. This aircraft and an Antonov made four deliveries, on July 4 and 27, and August 1 and 23, 2000. The cargo included military helicopters, spare rotors, anti-tank and anti-aircraft systems, missiles, armoured vehicles, machine guns and ammunition.

28. It is difficult to conceal something the size of an Mi-17 military helicopter, and the supply of such items to Liberia cannot go undetected by customs authorities in originating countries unless there are false flight plans and end-user certificates, or unless customs officials at points of exit are paid to look the other way. The constant involvement of Bout’s aircraft in arms shipments from eastern Europe into African war zones suggests the latter.

29. In addition, there have been few significant cases of aircraft with weapons being grounded at important fuelling points such as Cairo, Nairobi or Entebbe, or anywhere in West Africa. Although some countries have temporarily or permanently stopped aircraft registered in Liberia from entering their airspace, the Liberian register continues to be used fraudulently. The practice has clearly been organised from Liberia in cooperation with shrewd businessmen abroad, and Liberian-registered planes remain prominent in many African countries, particularly in countries at war.

30. In short, Liberia is actively breaking Security Council embargoes regarding weapons imports into its own territory and into Sierra Leone. It is being actively assisted by Burkina Faso. It is being tacitly assisted by countries allowing weapons to pass through or over their territory without question, and by those countries that provide a base for the aircraft used in such operations.

31. The report concludes with a full technical report on the adequacy of air traffic control and surveillance systems within the region.

32. The Panel strongly recommends that all aircraft operating with an EL-registration number and based at airports other than in Liberia, should be grounded immediately and until the provisions in the following recommendation are met. This includes planes based in Sharjah and other airports in the United Arab Emirates, in Congo Brazzaville, in the Democratic Republic of the Congo, Gabon, Angola, Rwanda and Kenya. Airport authorities and operators of planes registered in Liberia over the past five years should be advised to keep all their documentation, log books, operating licences, way bills and cargo manifests for inspection.

33. It is further recommended that all operators of aircraft on the Liberian register, wherever they are based, be required to file their airworthiness and operating licences and their insurance documents with the International Civil Aviation Organisation’s headquarters in Montreal, Canada, including documentation on inspections carried out during the past five years. The aircraft of all operators failing to do so should be grounded permanently. Aircraft that do not meet ICAO standards should be grounded permanently.

34. The Security Council, through ICAO, IATA and the WCO should create a centralized information bulletin, making the list of grounded Liberian aircraft known to all airports in the world.

35. Burkina Faso has recently recommended that the UN Security Council supervise a proposed mechanism that would monitor all arms imports into its territory, and their use, for a period of three years. The Panel endorses this proposal. The Panel also recommends that under such a mechanism, all imports of weapons and related matériel into Burkina Faso over the past five years be investigated. The Panel further recommends that any state having exported weapons during this period to Burkina Faso should investigate the actual end-use of these weapons, and report their findings to the Security Council and to the Program for Coordination and Assistance for Security and Development (PCASED) established under the ECOWAS Moratorium.

36. In view of the sanctions-breaking cases investigated by the Panel and the information gathered in the region, it is recommended that the Security Council encourage the reinforcement of the ECOWAS Programme for Coordination and Assistance for Security and Development (PCASED) with support from Interpol and the World Customs Organisation. PCASED should have an active capacity to monitor compliance with arms embargoes and the circulation of illicit weapons in the region.

37. The Security Council should encourage ECOWAS member states to enter into binding bilateral arrangements between states with common frontier zones, to initiate an effective, common and internationally agreed system of control that includes the recording, licensing, collection and destruction of small arms and light weapons. These bilateral arrangements can be promoted and facilitated through ECOWAS and through the Programme for Coordination and Assistance for Security and Development. A common standard and the management of a database on significant cases of smuggling and sanctions busting in the region could be developed by Interpol. The IWETS (International Weapons and Explosives Tracking System) programme of Interpol could be used by all states and the United Nations for the purpose of tracking the origin of the weaponry.

38. In this report, the Panel has identified certain arms brokers and intermediaries responsible for supplying weapons to the RUF. A project should be developed to profile these arms brokers with the cooperation of Interpol. Similarly, considering the importance of air transport in the sanctions busting, profiles of major cargo companies involved in such practices should be developed, with a view to exploring ways and means of further strengthening the implementation of sanctions.

39. Responsibility for the flood of weapons into West Africa lies with producing countries as well as those that trans-ship and use them. The Security Council must find ways of restricting the export of weapons, especially from eastern Europe, into conflict areas under regional or UN embargoes. ‘Naming and shaming’ is a first step, but consideration could be given to placing an embargo on weapons exports from specific producer countries, just as diamonds have been embargoed from producer countries, until internationally acceptable certification schemes have been developed.

40. An analysis of the firearms recovered from rebels should be undertaken in cooperation with Interpol, and its International Weapons and Explosives Tracking System. This would help in further identifying those involved in the RUF supply line.

41. The World Customs Organization should be asked to share with the Security Council its views on creating adequate measures for better monitoring and detection of weapons or related matériel to non-state actors or countries under an arms embargo.

42. Current Security Council arms embargoes should be amended to include a clear ban on the provision of military and paramilitary training.

43. Countries in West Africa that have not signed the 1989 UN Convention on the Recruitment, Use, Training and Financing of Mercenaries should be encouraged to do so.

44. Consideration should be given to the development of special training programs on sanctions monitoring for national law enforcement and security agencies, as well as airport and customs personnel in West Africa, and the development of a manual or manuals on the monitoring of sanctions at airports for worldwide use by airport authorities and law enforcement services.

45. Consideration should be given to placing specialised United Nations monitors at major airports in the region (and perhaps further afield), focussing on sensitive areas and coordinating their findings with other airports. This would enable better identification of suspect aircraft. It would also create a deterrent against illicit trafficking, and would generate the information needed to identify planes, owners and operators violating UN sanctions and arms embargoes.

46. The Security Council should consider ways in which air traffic control and surveillance in West Africa can be improved, with a view to curtailing the illicit movement of weapons. Possibilities include:

1. encouraging the installation of primary radar at all major West African airports, and finding the financial support to do so. Only primary radar can independently detect the movement of aircraft;

2. an alternative could be ‘pseudo radar’ which creates a radar environment with the use of powerful means of transmission of air/ground data through satellite.

3. requiring the use in the region of a Global Positioning System and requiring aircraft to be equipped with the appropriate avionics, with installation of the corresponding equipment on the ground. This would entail requiring aircraft flying in West Africa to have on board or to be equipped with avionics which could enable controllers on the ground to identify any traffic, anywhere and at any time in their sector;

4. encouraging ICAO and other interested agencies to assist states in reinforcing the financial autonomy of bodies established for the management of air navigation services.

47. In this report, the Panel makes a variety of specific recommendations that deal with diamonds, weapons and the use of aircraft for sanctions-busting and the movement of illicit weapons. Many of these recommendations and the problems they address are related to the primary supporter of the RUF, Liberia - its President, its government and the individuals and companies it does business with. The Panel notes with concern that Security Council resolutions on diamonds and weapons are being broken with impunity. In addition to the foregoing, the Panel offers the following recommendations with a view to making the message of this report more clear, and to ensuring that there is better follow-up to Security Council decisions in future:

48. A travel ban similar to that already imposed on senior Liberian officials and diplomats by the United States should be considered for application by all UN member nations until such time as Liberia’s support to the RUF and its breaking of other UN sanctions ends conclusively.

49. The principals in Liberia’s timber industry are involved in a variety of illicit activities, and large amounts of the proceeds are used to pay for extra-budgetary activities, including the acquisition of weapons. Consideration should be given to placing a temporary embargo on Liberian timber exports, until Liberia demonstrates convincingly that it is no longer involved in the trafficking of arms to, or diamonds from, Sierra Leone.

50. Consideration should be given to creating capacity within the UN Secretariat for on-going monitoring of Security Council sanctions and embargoes. This is imperative to the building of an in-house knowledge base on current issues such as conflict diamonds, as noted in paragraph 17 above, but it is even more important to creating greater awareness of, and capacity to deal with problems, which are not likely to be solved in the near future, such as the illicit trade in weapons and related matériel.

51. On August 2, 2000, in reference to Security Council Resolution 1306 (2000) concerning Sierra Leone, adopted by the Security Council on July 5, 2000, the Secretary General of the United Nations appointed a Panel of Experts to collect information on possible violations of the measures imposed by paragraph 2 of Resolution 1171 (1998) and the link between trade in diamonds and trade in arms and related matériel, and to consider the adequacy of air traffic control systems in the region.

52. Paragraph 2 of Resolution 1171 (1998) states that

53. In connection with this Resolution, the Panel took cognisance of Paragraph 8 of Security Council Resolution 788 (1992), which remains in force:

54. The Panel also noted paragraphs 1 to 7 of Security Council Resolution 1306 (2000), which dealt with the issue of Sierra Leone’s diamonds, and in which the Security Council decided that ‘all States shall take the necessary measures to prohibit the direct or indirect import of all rough diamonds from Sierra Leone to their territory.’

55. On October 6, 2000, the Chairman of the Sierra Leone Sanctions Committee informed the President of the Security Council that his Committee had agreed to exempt the export of diamonds controlled by the Government of Sierra Leone through a new Certificate of Origin regime from the measures imposed by paragraph 1 of the resolution.

56. The Panel of Experts consisted of Mr. Martin Chungong Ayafor (Cameroon - Chairman), Mr. Atabou Bodian (Senegal - Expert from the International Civil Aviation Organization), Mr. Johan Peleman (Belgium - Arms and Transportation Expert), Mr. Harjit S. Sandhu (India - Expert from Interpol), and Mr. Ian Smillie (Canada - Diamond Expert). The letter appointing the Panel is included in Annex 1.

57. The Panel first met at UN Headquarters in New York on August 21, and it was subsequently agreed with the Security Council Sanctions Committee on Sierra Leone that its report would be submitted on December 8, 2000. This was subsequently rescheduled to mid December, 2000.

58. The Panel received a great deal of logistical and moral support from the United Nations Secretariat, from UN Resident Coordinators and UNDP officials in almost every country it visited. Many governments helped with detailed information and advice, and many individuals and companies in the diamond industry provided helpful information. The Security Council exploratory hearings on Sierra Leone diamonds held in New York on July 31 and August 1, 2000 were also very helpful in setting the stage for the Panel.

59. The Panel was able to coordinate some of its work with the concurrent Angola Panel. In addition, Panel members were able to attend an important intergovernmental conference on conflict diamonds held in Pretoria in September 2000.

60. The Panel travelled widely to countries involved in the diamond trade, and to countries involved, or said to be involved in the trafficking of weapons and related matériel to Sierra Leone in contravention of UN Security Council embargoes. The entire panel visited Sierra Leone twice, and some Panel members visited three times. In addition to Freetown, trips were made to Daru and to the diamond trading centre of Kenema. In Guinea, Panel members visited Conakry and Nzerekore. The entire Panel also visited Liberia, South Africa and United Nations Headquarters in New York. Travel was undertaken by one or several of the Panel members to Belgium, Burkina Faso, Canada, Ghana, France, India, Israel, Mali, Niger, Nigeria, Spain Switzerland, Ukraine, the United Kingdom, the United States and the United Arab Emirates. Stopover visits were made to Abidjan, but because of elections and subsequent civil unrest, only a limited number of telephone conversations were possible.

61. In each country Panel members met with government authorities, and where relevant, with diplomatic missions, civil society organizations, aid agencies, private sector firms and journalists. The Panel had access to a wide range of public and confidential information provided by official sources, including law enforcement and intelligence agencies. The Panel also contacted a number of key individuals and informants whose names have been a subject of interest and controversy in recent months in connection with the Sierra Leone crisis. A full list of those contacted is contained in Annex 2. Given the sensitive nature of the subjects investigated by the Panel, however, it should be noted that many individuals spoke under conditions of confidentiality. Several meetings held in various countries have therefore not been listed.

63. In August 2000, the Panel requested detailed statistics dating back to 1987 on diamond exports from major producing countries, and imports to countries with significant trading, cutting and polishing industries. The reason for going back to 1987 was to determine what trends might have prevailed before the wars in Sierra Leone and Liberia. In September, the Panel sent reminders to all governments that had not yet provided the requested statistics. In the end, most of the data requested was provided by most governments. Three exceptions stand out, despite reminders: no statistics were received from The Gambia, Côte d’Ivoire and the United Arab Emirates.

64. The Panel agreed at the outset of its work to use high evidentiary standards in its investigations. This required at least two credible and independent sources of information to substantiate a finding. Wherever possible, the Panel also agreed to put allegations to those concerned in order to allow them the right of reply. In the past, allegations against various parties to the conflict in Sierra Leone have been denied with the question, ‘Where is the evidence?’ An example of this is the standard response to charges that weapons have been channelled to Liberia through Burkina Faso. In the report that follows, we have dealt in detail with this particular allegation. It might still be asked, ‘Where is the evidence?’ On this charge and others, full details of the sources will not be revealed, but the evidence is incontrovertible. The Panel examined the flight records maintained at the offices of Roberts Flight Information Region (FIR) in Conakry for all aircraft movement in West Africa during the period in question. It saw photographs of the aircraft being loaded in Burkina Faso. It examined flight plans. It spoke to eyewitnesses of aircraft movement in Burkina Faso and Liberia, and it spoke to individuals who were on board the aircrafts in question. In addition to its own detailed verification, the Panel received corroborating information from international intelligence agencies and police sources operating at international as well as national levels. The assistance of Interpol specialists was also taken as and when required. This is an example of one of the more difficult issues examined by the Panel. All issues have been judged and reported using the same standard.

65. The Panel’s mandate is described in Section A, above. The Panel was reminded of the background to its mandate, however, during its visits to Sierra Leone. There, thousands of civilians, many of them child victims of unspeakable brutality, face a future without hands or feet. Tens of thousands of Sierra Leoneans have lost their lives, half a million have become refugees and three or four times that number has been displaced. As the Panel concluded its report, much of Sierra Leone remained in rebel hands, where people lived without access to medical assistance, education or the means to a secure livelihood. The Panel remained cognizant, throughout its work, of its role and its responsibility in helping to end the suffering of the people of Sierra Leone, and this decade-long tragedy.

66. Each year, over 250 million carats of diamonds are mined worldwide. Even in its peak years of production during the 1960s, Sierra Leone never produced more than 2 million carats annually. But a high proportion of Sierra Leone’s diamonds are gemstones of very high quality and value, and they are much sought after. During the 1970s and 1980s the Sierra Leone diamond industry fell prey to corruption and mismanagement and many of the country’s diamonds were exported illegally. Between 1992 and 1996, average annual exports were less than 200,000 carats and the per carat value was significantly less than the country’s known run-of-mine average. Not only were the bulk of the country’s diamonds being smuggled out, but the emphasis in smuggling seemed to be on higher value diamonds.

67. Between 1997 and 1999 the situation worsened because of the war. In those three years a total of only 36,384 carats were exported officially.

68. The Revolutionary United Front initiated the war in 1991. Until 1995, RUF diamond mining and digging was probably done on a sporadic and individual basis. By 1995, however, the RUF and its patrons were clearly taking a much greater interest in the diamond fields of Kono District, and had to be removed forcefully at that time by the private military company, Executive Outcomes. From then on, the RUF interest in diamonds became more focussed, especially with the 1997 imprisonment of Foday Sankoh in Nigeria. During his imprisonment and subsequently, the diamond areas of Kono and Tongo Field became a primary military focus of the RUF, and diamond mining became a major fund-raising exercise.

69. This finding is supported by the tenacious military hold that the RUF has maintained on Kono District and Tongo Field, the two most valuable diamond areas in Sierra Leone. It is borne out in the written and oral testimony of current and past RUF leaders. It is supported by the testimony of Chiefs and elders from Kono District who are in daily communication with travellers from their areas. It is borne out in written reports made by RUF field commanders to Foday Sankoh. And it is supported by current internal communications between RUF leaders inside Sierra Leone, and between RUF leaders in Sierra Leone and in Liberia.

70. At first, RUF fighters did their own mining, or used forced labour. More recently they have developed a modified form of forced labour, allowing local diggers to keep a certain amount of what they find. One system is to make a group of diggers work for the RUF for four days, and allow them to work for themselves for two, with one day off. More common is what is known as the ‘two pile system’, in which diggers create one pile of diamondiferous gravel for the RUF and another for themselves. The idea is that diggers can then retain what they find in their own pile, although all the washing is watched, and any sizeable diamonds found in a digger’s pile are also taken by the RUF.

71. Once the Kono diamond fields were secured by the RUF, they created a mining unit under ‘Lt. Col Kennedy’. The RUF have since organized something they refer to today as ‘RUFP Mining Ltd.’ As of October 2000, the ‘Chairman’ was ‘Lt. Col. Abdul Razak’ and the Deputy Chairman was ‘Lt. Col. Victor’.

72. In addition to being a source of revenue, diamonds have also been a source of constant friction and confusion within the RUF. In 1999, Sam ‘Mosquito’ Bockarie, a former diamond digger who became the RUF’s ‘Battle Group Commander’ and ‘High Command’, complained to Foday Sankoh that during the AFRC/RUF ‘marriage’ in 1997* Dennis Mingo (‘Col. Superman’) had sold a diamond to a Lebanese businessman. A portion of the proceeds had gone to the AFRC government and the balance, Le 9 million, was intended for the RUF. Instead, however, Superman embezzled the money, according to Bockarie. (A list of RUF leaders and their pseudonyms is included as Annex 3.)

73. Late in 1998, after the AFRC had been forced out of Freetown by ECOMOG, RUF forces led by Issa Sesay and under orders from Sam Bockarie (then referred to as Chief of Defence Staff for both the RUF and the AFRC), undertook a mission to move former AFRC Chairman Johnny Paul Koroma to the safety of RUF headquarters in Buedu. While they were there, Sesay discovered that Koroma was in possession of a parcel of diamonds, and that he was planning to escape to Ghana with his family. Sesay and Brigadier Mike Lamin confronted Koroma, finding it hard to believe that while they were trying to regroup, Koroma would keep diamonds for his own use and flee, leaving them with a problem he had created. The diamonds were subsequently handed over to the RUF leadership. According to internal RUF reports, the diamonds were then given to Ibrahim Bah and ‘Sister Memuna’ and taken to Liberian President Charles Taylor.

74. The name of ‘Ibrahim Bah’ arises frequently in the RUF diamond story. He is said to be a Burkinabe military officer. He is also known as Ibrahima Baldé and Baldé Ibrahima. He was a key player in the RUF-AFRC axis, and has been instrumental in the movement of RUF diamonds from Sierra Leone into Liberia and from there to Burkina Faso.

75. Issa Sesay, the current RUF leader, has had his own problems with diamonds. Late in 1998, Captain Michael Comber of the RUF Mining Unit brought a parcel of diamonds from Kono to the RUF headquarters at Buedu. Sam Bockarie gave the diamonds to Sesay who took them to Liberia where he was to meet Ibrahim Bah. Together they were then to meet a business associate of Foday Sankoh to make arrangements for the procurement of military equipment. Sesay lost the diamonds somewhere in Liberia, claiming he had accidentally dropped the parcel in the mud. This led to a major contretemps between Sesay and Bockarie, although Sesay was eventually forgiven.

76. Dennis ‘Superman’ Mingo, however, still smarting over the allegation that he had embezzled Le 9 million from a 1997 diamond sale, played up Sesay’s loss, fomenting contention within the RUF ranks. In October 1999, he wrote to Foday Sankoh from Liberia, warning him that Sam Bockarie could not be trusted and that Sankoh’s life was in danger. He also said that Bockarie and his men had been squandering funds from diamond sales and that Bockarie had bought a house in Liberia and one in France.

77. Shortly thereafter, a military confrontation occurred between forces loyal to Foday Sankoh and those loyal to Sam Bockarie. Several combatants were killed. Sam Bockarie subsequently went into exile in Liberia, where he remains close to President Charles Taylor.

78. Diamonds continue to cause friction. In September 2000, a dispute arose between Lt. Col. Victor, the Deputy Chairman of RUFP Mining Ltd. and some of his associates: Major Bob Vandy, Staff Captain Koroma and Major Morry Gebaru. RUFP Mining Chairman Abdul Razak undertook an investigation, which uncovered stories of diamond embezzlement by ‘Capt. Prince Khan’ and others who were in conflict with the Deputy Chairman, including ‘Lt. Col. Mustafa Sherrif’. This in turn raised the concern of Issa Sesay, who was at the time carrying out a wider investigation into all RUF financial affairs in Liberia.

79. Estimates of the volume of diamonds mined by the RUF vary widely, from as little as $25 million per annum to as much as $125 million. De Beers has estimated that the total was likely $70 million in 1999. Part of the difficulty in estimating what is available to the RUF is the fact that years of illicit mining and export have served to reduce all official historical production figures, providing no reliable statistics for at least two decades on what has actually been mined in Sierra Leone. In the late 1960s, Sierra Leone exported 2 million carats per annum. The RUF holds the richest diamond areas in the country. If 1999 RUF production was one eighth of Sierra Leone’s best year (i.e. 250,000 carats), the value would be upwards of $50 million. If it was half of the official average exports in the early 1990s (i.e. 100,000 carats), it would be in the neighbourhood of $20 million.

80. There are arguments in favour of lower estimates: the RUF does not have access to heavy equipment and is thus limited to artisanal mining; many former RUF combatants today live very modest lives and say they never saw diamonds. Arguments favouring higher estimates include the fact that the RUF has been able to support 3,500 - 5,000 armed combatants and as many camp followers for several years, and internal RUF communications regularly refer to the importance of diamonds. Knowledgeable diamantaires believe that a very high proportion of the diamonds being exported from The Gambia (which mines no diamonds of its own) originate in Sierra Leone, some travelling there via a third country such as Liberia. Imports into Belgium of ‘Gambian’ rough averaged over $100 million per annum between 1996 and 1999.

81. While the total generated by the RUF, whether it is $25 million, $70 million or $125 million, is very small in relation to the global annual output of diamonds, it nevertheless represents a major and primary source of income to the RUF, and is more than enough to sustain its military effort.

82. Diamonds have always been smuggled out of Sierra Leone, the bulk through Liberia. This historical fact is not in dispute. There have been a variety of reasons for smuggling: to avoid taxes; to avoid the higher cost of corruption in one country over another; to gain access to hard currency; to launder money. Historically, Liberia was the route of choice primarily because of its use of the U.S. dollar as its official currency. Other diamonds found their way to Guinea where they would more likely have been traded for rice and other foodstuffs. And diamonds also travelled further afield to other countries in the region, carried by Madingo and Senegalese traders, known as marakas.

83. Some RUF diamonds have been traded in Guinea. There are reports of one-off deals in which RUF commanders have traded diamonds for supplies, and sometimes for weapons, dealing with individual, mid-level Guinean military officers acting on their own account. One such arrangement in mid 2000 is said to have gone sour, resulting in an RUF attack on the Guinean border town of Pamelap when promised Guinean supplies were not forthcoming. There is no evidence, however, of any official Guinean collusion in such trade.

84. A certain volume of RUF diamonds are being traded in Kenema and elsewhere in Sierra Leone. It is an open secret that RUF traders bring diamonds to Kenema from Tongo Field, only 28 miles away, on a regular basis, and exchange them for food and other supplies. This would account for the continued presence in Kenema of more than 40 separate diamond dealers, many of them Lebanese, even though their main source of supply has officially been out of reach for several years. It is possible that these diamonds could enter the official export system if there is a lack of probity and vigilance in the Government Gold and Diamond Office (GGDO), the Ministry of Mineral Resources and its branches.

85. It is more likely, however, that these diamonds are being smuggled out to neighbouring countries. Many of Sierra Leone’s diamond dealers are also major importers of food and consumer goods. The steep mark-up on these goods yields high profits which require a hard currency or its equivalent in order to be repatriated. Diamonds serve this purpose. Many prominent exporters from Sierra Leone are also exporters of diamonds from The Gambia, a country that produces no diamonds at all.

86. As noted in paragraphs 68 through 78, however, the bulk of the RUF trade in diamonds leaves Sierra Leone through Liberia. The diamonds are carried by RUF commanders and trusted Liberian couriers to Foya-Kama or Voinjama, and then to Monrovia.

87. A Liberian is said to be President Taylor’s representative in Kono, with a mandate to supervise diamond operations. On the RUF side, during much of 1998, Dennis ‘Superman’ Mingo was in charge of the diamond operations in Kono. He regularly took diamonds to the RUF headquarters at Buedu and from there they were transferred to Liberia. At various times, diamonds were taken to Monrovia by Eddie Kaneh, Sam Bockarie and Issa Sesay. As noted in paragraphs 72 to 78, there have been frequent disputes over the diamonds, and RUF couriers travel in fear of being robbed by rogue Liberian NPFL (National Patriotic Front of Liberia) fighters. At RUF headquarters in Buedu, concerns have occasionally arisen that diamonds said to be held in safekeeping by President Taylor might actually have been sold. On one occasion in 1998, Sam Bockarie went to Monrovia to see Taylor about this concern, and when he returned, he reported that he had seen the diamonds.

88. Because of time constraints, the Panel could not go into the details of ways and means through which RUF diamonds are moved out of Liberia, however there is sufficient evidence to prove that this trade cannot be conducted in Liberia without the permission and the involvement of government officials at the highest level. In Liberia, uncorroborated stories refer to high-level go-betweens, senior government officials, and financial transactions made in Burkina Faso, South Africa, the United States and Lebanon. (This subject is covered from a different perspective in the Liberia Case Study, below.)

89. Liberian officials thrive on their country’s reputation for weak administration, its crippled infrastructure and its ‘porous border’. In fact, however, very little trade, whether formal or informal, takes place without the knowledge and involvement of key government officials. This is true of all imports, and where exports are concerned, it is especially true of diamonds and timber. Liberia’s own official diamond exports were said to be only 8,500 carats in 1999, valued at $900,000. Liberia’s Minister of Lands, Mines and Energy estimates that this represents only 20 per cent of what is actually leaving the country, and the Ministry of Revenue suggests that it might be as little as 10 per cent of the total.

90. In a country where most of the diamond traders are foreigners and where the movement of foreigners, money and supplies is as carefully watched, as is the case in Liberia, it is not conceivable that so much of Liberia’s own diamond production could avoid the detection of government. Nor is it conceivable that the significantly greater volumes of high-value Sierra Leone diamonds moving through Liberia could avoid detection by government.

91. The Lomé Peace Agreement appointed Foday Sankoh Chairman of a Commission for the Management of Strategic Mineral Resources (CMRRD). Between the time Foday Sankoh returned to Sierra Leone late in 1999 and the resumption of hostilities in May 2000, members of the Commission never actually met, and the Commission did not function. During his time in Freetown, Foday Sankoh spent money lavishly, although he had no obvious source of income. He imported vehicles, satellite phones and other expensive equipment.

92. In 1999, before Foday Sankoh’s appearance in Freetown, Sam Bockarie wrote a ‘To Whom It May Concern’ letter on RUF stationery, appointing Mohamed Hijazi, a long-time diamond miner and dealer, as the RUF’s agent ‘to negotiate with any person or company within or outside S/Leone for the prospecting, mining buying and selling of diamonds’.

93. After his arrival in Freetown, Foday Sankoh signed numerous agreements with international business firms and solicited financial favours from others making enquiries in his own name, in the name of the Commission, and in the name of the RUF. His own business files, found in his office after the May 2000 resumption of hostilities, contain correspondence relating to business opportunities he was actively promoting.

94. In November 1999, for example, Foday Sankoh received a visit from Chudi Izegbu, President of the Integrated Group of Companies based in McLean, Virginia. Izegbu had chartered an aircraft to Freetown from Abidjan, and together he and Sankoh discussed a range of investment possibilities for the Integrated Group, which includes a company called Integrated Mining, registered in the Cayman Islands. They discussed possible investments in civilian aircraft services, petroleum imports and a major investment in the Koidu diamond kimberlites. Subsequently, Izegbu and Sankoh exchanged correspondence about ‘negotiations and discussions currently going on in the interest of the RUFP’. And they exchanged test messages in a code which would allow them to disguise names - words like ‘diamonds’ and ‘gold’, and expressions such as ‘everything is OK’, and ‘things are bad’. In December 1999, Sankoh ordered 14 vehicles from Izegbu with the logo of the RUF Party painted on the side of each.

95. In March 2000, Damian Gagnon of the U.S. company, Lazare Kaplan International (LKI), visited Foday Sankoh, and in a subsequent letter to Sankoh, LKI Chairman Maurice Tempelsman said that Gagnon had reported ‘a commonality of views between you and this company on the possibilities of LKI re-entering the Sierra Leone diamond business in a manner beneficial to all the people of that country as well as our company’.

96. Much of the correspondence suggests that Sankoh was encouraging a wide variety of potential investors, many thinking they would reap exclusive benefits from the same things. One much-circulated April 2000 letter from ‘Michel’ to ‘The Leader’ talks about how Sankoh should try to get all of the diamonds mined in Kono, rather than the 10 per cent which the author said was the case - the rest being filtered off to Liberia. ‘Michel’ proposed that his Belgian partner ‘Charles’ could hire a private jet to take the diamonds out directly from Kono, avoiding ‘the Lebanese’ and Monrovia - ‘We cannot trust those people’, he wrote.

97. Michel Desaedeleer, a U.S.-based, self-employed Belgian, made contact with the RUF in Togo during the summer of 1999 while he was doing business with the son of President Eyadema. By October, he and John Caldwell, President of the Washington-based U.S. Trading & Investment Company, had worked up an arrangement with Foday Sankoh which would give them authority to broker rights to all of Sierra Leone’s diamond and gold resources for a ten year period. Although refused a visa by Sierra Leone’s U.S. embassy, Caldwell and Desaedeleer went to Sierra Leone and Liberia anyway, and signed the agreement between Desaedeleer’s BECA Company and the RUF (not with the Government of Sierra Leone or the Commission for the Management of Strategic Mineral Resources). While they were in Liberia, Desaedeleer was given diamonds by Ibrahim Bah (a.k.a. Ibrahima Baldé), which Desaedeleer later discovered in Antwerp were worth much less than he had been told. He also claimed to have been shown ‘perhaps hundreds’ of diamonds by Sankoh’s wife, Fatou, during a 1999 meeting in New York.

98. In February 2000, Foday Sankoh, his wife and other RUF officials travelled to South Africa. Sankoh was in contravention of a United Nations travel ban prohibiting him from leaving Sierra Leone. The trip was sponsored and partially financed by South African businessman Raymond Kramer, who earlier the same month had signed an agreement with Sankoh to ‘represent the Commission [the CMRRD, of which Sankoh was Chairman] in all areas relating to mining and mineral resources, including but not limited to strategic minerals and precious stones’. When Sankoh’s presence in South Africa was made public, he was forced to return to Sierra Leone and curtail his dealings with Kramer. Fatou Sankoh, who travels on a U.S. passport, visited South Africa again in May 2000, and was again deported.

99. The correspondence presents an image of a double-dealing Leader, clutching at financial opportunities for personal and political gain, outside of the governmental framework in which he was ostensibly working. Much of this related to the diamond trade. It also suggests dissension within the RUF ranks, and an attempt by Sankoh to gain control over diamonds that remained effectively in the hands of his fractious field commanders and their Liberian mentors.

100. By resolution 1306 (2000) adopted on July 5, 2000, the Security Council imposed an embargo on the direct and indirect import of rough diamonds from Sierra Leone until a new mining, export and monitoring regime could be developed. With technical assistance from Belgium’s Diamond High Council and financial assistance from the United Kingdom and the United States, a certificate of origin system was developed between July and October 2000, including a numbered confirmation certificate printed on security paper, new detailed electronic databases of exports with electronic confirmation at destination, and electronic transmission of digital photographs of the packages being exported.

101. In October, after considering the new measures and ensuring that information about them had been disseminated to importing countries, the Security Council lifted the embargo on official Sierra Leone exports. The first diamonds exported under the new arrangements reached Antwerp at the end of October.

102. The embargo and the new certification system were peripheral to the mandate of the Panel, but during our travel it was the subject of much discussion in Sierra Leone, in other African exporting countries, and in all the major diamond importing centres.

103. The new system is indeed foolproof once diamonds enter the formal system. It will be important for Sierra Leone’s Government Gold and Diamond Office to ensure, therefore, that only diamonds mined in government-controlled areas are actually certified. This is especially important, given efforts by the RUF to trade diamonds for food and other supplies in Kenema (see also paragraph 84 above).

104. It is perhaps more important to consider the value of the system beyond conflict diamonds, once the war ends. Then the issue for Sierra Leone will focus more on smuggling and other forms of illicit behaviour. In the end, the certification system can only work to its fullest potential if the government is willing and able to track and audit dealers in Sierra Leone, and if it is able to develop systems of support for the artisanal miners who, for the better part of 50 years, have worked outside the diamond industry.

105. There is more to be said about the certification scheme, however. There was never a serious problem with diamonds being exported officially from Sierra Leone. The problem was the illicit and conflict diamonds which avoided the formal system. In 1999, Sierra Leone officially exported only 9,320 carats, a demonstration, if one was needed, that the formal system was being ignored by the RUF and smugglers. This had changed in the first half of 2000, when concern about the country’s conflict diamonds was noted in the world press and in diamond-buying centres. The consequence was a sudden influx of diamonds into the formal system, offered by dealers wanting at last to ‘go straight’ and avoid charges of illicit trading. While the 26,300 carats exported officially during this period did not represent a landslide, it was a significant step in the right direction.

106. The United Nations embargo effectively stopped this legitimizing trend for several months, and pushed traders back into their old and time-tested smuggling routes. Because there was no embargo on diamonds from any of Sierra Leone’s neighbouring countries, the ban actually punished the victim and rewarded its enemies. This has now changed, and it is to be hoped that the new system will attract a significant volume of diamonds back into legitimate channels.

107. Where the RUF’s conflict diamonds are concerned, the legitimate export system, whether it was foolproof or not, was irrelevant, and it will remain so. As long as there are no controls in neighbouring countries, the RUF will continue to be able to move their diamonds out with impunity.

108. For this reason, it is imperative that a standardized global certification scheme be introduced as soon as possible. The issue of conflict diamonds has now been addressed at four intergovernmental meetings in the ‘Kimberley Process’ and at a further meeting in London in October 2000. On December 1, 2000, the United Nations General Assembly passed a resolution on the role of diamonds in fueling conflict (A/RES/55/56), and expressed ‘the need to give urgent and careful consideration to... the creation and implementation of a simple and workable international certification scheme for rough diamonds.’ The resolution stated that this scheme should meet internationally agreed minimum standards, it should secure the widest possible participation, and that diamond exporting, processing and importing states should act in concert. The resolution also noted the need for transparency and for arrangements to help ensure compliance.

109. This resolution is strongly endorsed by the Panel. It is a major step forward in recognizing the need for what the diamond industry calls ‘rough controls’. If implemented, it could go a long way in solving some of the problems identified in this report. The Government of Namibia will convene a workshop early in 2001 to consider technical aspects pertaining to the envisaged certification scheme. The Panel very much welcomes the Namibian offer to help move the process forward.

110. The Panel notes with concern, however, that some governments and some members of the industry may be approaching the idea of international ‘rough controls’ with reluctance or antipathy, urging a minimalist approach and a lengthy period of study and negotiation. The Panel believes that any international system must be developed carefully, and that it must be appropriate to the need. But the Panel is in no doubt about the urgency or the importance of the proposal. Despite all the meetings of the past year, despite the work of the United Nations and many governments, the wars in Sierra Leone, Angola and the Democratic Republic of the Congo continue; diamonds continue to serve as fuel for these wars and as a catalyst for the continuing misery of hundreds of thousands of people.

111. The issue of Sierra Leone’s conflict diamonds is complex, but it is not unfathomable. As will be noted later in this report, it is tied to the wider issue of illicit diamonds, and this has been recognized in a forthright manner by the diamond industry in WDC documentation. A detailed proposal has also been made by the WDC for a ‘System for International Rough Diamond Export and Import Controls’, which should be an excellent basis for intergovernmental discussions.

112. At the beginning of 1999, the industry denied the problem of conflict diamonds, and governments appeared to be taking decisive action. The situation has now changed, with the most specific initiatives coming from industry. Despite the December 1, 2000 passage of General Assembly Resolution A/RES/55/56 on the need for a global system of ‘rough controls’, the intergovernmental process may take several more months of negotiation. For this reason, where Sierra Leone is concerned, it will be imperative for the Security Council to take early steps on broadening the existing Sierra Leonean certification system throughout West Africa at least.

113. The Panel sought to determine how illicit diamonds from Sierra Leone find their way into the legitimate trade. One line of enquiry was to compare diamond export statistics of neighbouring producer countries with their known mining production capacity, to see if exports significantly exceed production capacity. Another was to review the import statistics of major trading centres for anomalies. One such anomaly is the 33.6 million carats said to be of Liberian origin that were imported into Belgium in the five years between 1995 and 1999. This volume is far beyond Liberian production capacity, and exceeds official Liberian exports by so much, that investigation was clearly warranted (see also paragraphs 123 to 131 below).

114. A major difficulty in tracking the movement of rough diamonds, however, is the inconsistent manner in which the governments of major trading centres record diamond imports and exports. The first issue has to do with the general availability of statistics. Belgian authorities expressed concern to the Panel that Belgium had been unfairly criticized in the past because it has been so open with its statistics. It was suggested to the Panel that other countries have escaped criticism for importing rough from ‘sensitive’ countries - either as countries of origin or provenance - simply because they produce no public statistics at all.

115. The Panel went to considerable lengths to obtain rough diamond import statistics from all the major trading centres for the years between 1987 and 1999. With the exceptions of The Gambia, Côte d’Ivoire and UAE, the Panel was largely successful. We found the following:

116. Although the Panel received detailed import statistics from each of the major trading centres, there are a number of key differences that make the tracking of rough diamonds extremely difficult. The first has to do with a distinction made between ‘country of origin’ and ‘country of provenance’. Country of provenance refers to the country from which diamonds were last imported; country of origin indicates where they were mined. Statistics on country of provenance are important in the calculation of national trade statistics, and until recently, little serious attention was paid anywhere to the issue of where diamonds were actually mined.

117. This leads to major anomalies. For example in 1999, British imports of rough unsorted diamonds (code 71021000) totalled £107 million (down from £347 million in 1998). Of this, Switzerland was recorded as the ‘country of origin’ for 41 per cent or £44.2 million. Switzerland, as a non-producer of diamonds, could only have been the country of provenance, importing the diamonds from another country. Switzerland, however, records the importation of virtually no rough, unsorted diamonds. The total in 1999 was valued at only Sfr 1.5 million, up from Sfr 295,000 in 1998.

118. The difference is explained by the fact that Switzerland has not in the past recorded statistics on diamonds passing through its free trade areas, or Freiläger, at Zurich and Geneva airports. The volume of these flows is so great that it would skew national trade statistics, and since no value is added to these diamonds as they pass through Swiss airports, there has, until recently, been no felt need to record the statistics. Those diamonds bound for the UK thus become ‘Swiss’ simply by virtue of having passed through a Freilager. The country of origin, which might have been recorded in Switzerland, and passed on to British customs authorities, is thus lost.

119. It should be noted that parcels of rough diamonds passing through a Freilager can be opened, mixed with other diamonds, repackaged for a variety of destinations, and exported as mixed diamonds. Private sector firms working in the Freiläger maintain facilities expressly for this purpose, including secure areas with diamond scales and sorting equipment. This sorting and re-invoicing serves to further obscure the origin of diamonds.

120. Origins become even more obscure once diamonds have been sorted and/or partially treated in the U.K. Under this heading (code 71023100), the UK became the origin of 96.7 per cent of all Swiss imports in 1999. Having become ‘Swiss’ on the way to the UK, a huge proportion then becomes ‘British’ on the way back to Switzerland. Because 96.4 per cent of Swiss diamond exports in 1999 went to Israel, most of these same diamonds thus became ‘Swiss’ again as far as Israeli import statistics are concerned.

121. India notes the fact that it does not trade in conflict diamonds because 80 per cent of its rough imports come from Belgium and virtually none come directly from Africa. As with the U.K. and the U.S., however, the operative word is ‘directly’. The lack of scrutiny throughout the delivery chain and the stops along the way allow most importing countries to say that they do not import anything from Africa, conflict or otherwise.

122. These examples explain why it is so difficult to determine where diamonds - still in their rough state and moving from one trading or polishing centre to another - are actually mined. It does not explain, however, why the huge volume of diamonds entering Belgium, noted in paragraph 113 above, would have been labelled ‘Liberian’. The superficial explanation is that they were of Liberian ‘provenance’, as clearly they could not have been mined in Liberia. According to this explanation, they would have transited Liberia and became ‘Liberian’, just as other diamonds transit Switzerland, Belgium or the UK, becoming ‘Swiss’, ‘Belgian’ or ‘British’ in the process.

123. The highest estimates of current Liberian production capacity do not exceed 150,000 carats per year. In 1987, the country exported a record high 295,000 carats, at an average value of $37 per carat. The Liberian Ministry of Lands, Mines and Energy informed the Panel that 1998 official diamond exports totalled only 8,000 carats, valued at $800,000 (i.e. $100 per carat). In the same year, Belgium recorded imports from Liberia by 26 companies, totalling 2.56 million carats, valued at $217 million (i.e. $85 per carat). One company alone, ‘Company A’, imported 168,456 carats, estimated at $87 million, or $516 per carat.

124. In 1999, official Liberian exports grew slightly, to 8,500 carats, at an average value of $105 per carat. ‘Liberian’ imports into Belgium declined to 1.75 million carats, but the stated value increased to $247 million, or $140 per carat. Company A’s imports declined to 75,000 carats, valued at $57 million. This represented a significantly higher per carat value, however, of $760.

125. Up to mid August 2000, ‘Liberian’ imports into Belgium were 340,000 carats, valued at $50 million, or $147 per carat. Company A, however, which told the Panel at the end of October that it had not imported anything from Liberia for six months, showed imports of only 6,696 carats. But valued at $12.88 million, this represented a remarkable $1,923 per carat.

126. Belgium has recently changed the data requirements on the import licenses that it requires for each shipment. It now requires that each import shipment state the country of provenance, as well as the country of origin. A review of selected Company A import licenses, however, showed that diamonds far in excess of the quality or quantity available in Liberia had been imported as Liberian in provenance and origin. Invoices from ‘Liberian’ firms - none on the list of licensees provided by the Liberian government - accompanied the Belgian import license.

127. A physical check of the Monrovia street addresses given by most of these firms revealed that there were no such companies, and no such addresses. Courier firms in Monrovia, however, have in the past been instructed to route correspondence for these addresses to the International Trust Company, (ITC) which in January 2000 changed its name to the International Bank of Liberia Ltd. Since then, mail addressed to the companies in question has been forwarded to the newly-established Liberian International Ship and Corporate Registry (LISCR) which now handles the Liberian maritime registry. This means that if the companies in question are more than shells, they are not physically present in Liberia, and none of the diamonds in question were either mined in, or passed through Liberia. It also means, however, that there is an intimate Liberian connection with these deceptive diamond transactions.

128. The name of retired U.S. Army General Robert A. Yerks occurs frequently in discussions about Liberian diamond transfers. He was involved with ITC and is currently a senior official in LISCR.

129. Companies and individuals in Belgium importing ‘Liberian’ diamonds in 1999 and/or 2000 include (but may not be limited to) the following: Abadiam, Afrostars Diamonds, Ankur Diamonds, Arslanian, Cukrowicz, Diam 2000, Diambel, Diminco, Fink Diam, Hardwill Diamonds, I.D.H. Diamonds, Korn & Partners, Krishna Dimon, Lewy-Friedrich, Marjan Diamonds, Omega Diamonds, Orion, Samir Gems, Sana Diam, Shainydiam, Shallop Diamonds, Shour, Siddhi Gems, Sima Diamond, Soradiam, Starough, Sunshine Gems, Sygma Diamonds, Symphony Gems, Vijaydimon, Vitraag and Widawski.

130. Companies supposedly exporting diamonds from Liberia, which are not on the Government list of licensees and which do not have a physical presence in Liberia include Alcorta Trading, Barnet Trading Co., Diamond Trading Associates, Fairlib Enterprises Inc., Kamal Daoud S.A., Nybelgo Company, and Pier Enterprises S.A. There are undoubtedly more. While the diamonds listed on the invoices of these companies are not necessarily conflict diamonds, companies with a genuine physical presence in Liberia have also provided invoices to Belgian importers. Without further investigation, it is difficult to say whether they are exporting genuine Liberian diamonds, or smuggled Sierra Leonean diamonds. Whatever the case, they are engaged in illicit behaviour, because they do not have Liberian export licenses and because their exports far exceed official Liberian exports.

131. Much has been made in recent months about the need to make a clearer distinction between ‘country of origin’ and ‘country of provenance’. The volumes in question regarding Liberia, however, taken in conjunction with Liberia’s own figures and its limited capacity to act as a trading centre, indicate that a large proportion of the diamonds entering Belgium under the Liberian label represent neither country of origin nor country of provenance. Most are illicit diamonds from other countries, taking advantage of Liberia’s own involvement in the illicit diamond trade, its inability or unwillingness to monitor the use of its name internationally, and the improper use of its maritime registry. The larger illicit trade provides Liberia with a convenient cover for the export of conflict diamonds from Sierra Leone.

132. The Gambia produces no diamonds, but in recent years it has become a diamond-exporting nation. In 1998, Belgium recorded imports from The Gambia of 449,000 carats valued at $78.3 million, an average value of $174 per carat. The volume declined the following year to 206,000 carats, with an average per carat value of $234. Up to mid August 2000, there was a more significant decline: 82,000 carats valued at $17.6 million ($214/ct).

133. All of the Belgian importers of ‘Gambian’ rough also import from one or more of the producing countries in the region: Sierra Leone, Guinea and/or Liberia. ‘Company B’ explains its importation of $50 million in ‘Gambian’ diamonds between January 1, 1998 and mid August 2000 as follows: There are many traders - ‘marakas’ - moving up and down the coast with diamonds. The Gambia has become a ‘mini-Antwerp’, and reputable companies are simply buying what is available on the open market. When pressed, however, Company B acknowledges that these diamonds have entered Gambia for one of two reasons: either to evade taxes in the countries where they have been mined, or to avoid detection as conflict diamonds. Knowledgeable diamantaires say that 90 per cent of ‘Gambian’ diamonds are from Sierra Leone.

134. The Gambia did not respond to the Panel’s repeated requests for information on diamond imports and exports, so the Panel does not know whether exports from The Gambia are consistent in any way with official Gambian imports.

135. Official Guinean exports were consistent over the 1990s, averaging 380,000 carats per annum, at $96 per carat. The panel examined Belgian, U.S., British, Swiss and Israeli import statistics, and found that the only significant imports were into Belgium. This is consistent with information provided by the Government of Guinea.

136. Belgian trade statistics, however, record average imports over the same period of 687,000 carats per annum, with an average value of $167 per carat (see Table 1). In other words, Belgium appears to import almost double the volume that is exported from Guinea, and the per carat value is almost 75 per cent higher than what leaves Guinea.

137. It is unlikely that the difference between Guinean exports and Belgian imports could be explained by the ‘country of provenance’ issue, because Guinea does not officially import diamonds, and any official Sierra Leone diamonds in transit through Conakry do not enter Guinean trade statistics.

138. There are three possible explanations. The first is that the difference is made up of diamonds exported unofficially from Guinea. These could be either Guinean diamonds, or diamonds smuggled in from Sierra Leone and elsewhere (as in the Gambian case). Such diamonds could be ‘conflict diamonds’ or simply ‘illicit diamonds’. The second possibility is that Guinea’s name is applied to diamonds entering Belgium from another country or countries, as in the Liberian case. A third possibility is that it is a combination of the first two.

139. U.S. statistics show a different problem, if they have been correctly presented to the P