Page 579 - IOM Law Society Rules Book

The large scale production of raw diamonds is limited to a few areas of the world –
South Africa, western Africa, Australia, Canada and the Russian Far East to name just
a few of these – and high volume trading in diamonds is concentrated in a few
locations – Antwerp, New York, Tel Aviv, for example. For these reasons, it appears
that not every country or region will have the same level or type of diamond trading
activity.

The ease with which diamonds can be hidden and transported and the very high value
per gram for some stones make diamonds particularly vulnerable to illegal diversion
from the legitimate channels for the exploitation and profit of criminals. Security in
all phases of the diamond industry is therefore a critical necessity in all phases of the
diamond industry. One expert observed that between 5 and 10 percent of diamonds
produced annually in a particular region are lost due to theft or pilferage. The
destination of the uncut diamonds lost to this “leakage” is the illicit diamond market.
Moreover, due to the breakdown of central controls in some diamond producing areas
of western Africa, the profits for diamonds sold from that region have been known to
help further ongoing armed conflicts by providing income to purchase arms.
Consequently, these diamonds have been labelled “conflict” or “blood” diamonds.

TYPOLOGIES

Many of the typologies are similar to that with gold. However, some of the more
common types of laundering activity related to this sector include retail foreign
exchange transactions, purchasing of gaming chips at casinos, forged or fraudulent
invoicing, commingling of legitimate and illicit proceeds in the accounts of diamond
trading companies, and in particular, international funds transfers among these
accounts.