The country joins an international ban on trade in the rough stones from the Marange fields in Zimbabwe which have been linked to violence and human-rights abuses.
UAE bans Zimbabwe's 'blood' diamonds
ABU DHABI // The UAE has joined an international ban on trade in "blood" diamonds from the Marange fields in Zimbabwe.
Profits from Marange's smuggled rough diamonds have been linked to violence and human-rights abuses, with the involvement of the Zimbabwe military and close relatives of the country's president, Robert Mugabe.
Apart from a brief amnesty this summer, exports have never been approved by the Kimberley Process (KP), a certification scheme set up by UN resolution in 2003 to control the trade in rough diamonds and prevent their use to fund violence. KP participants, representing 74 countries, have been unable to agree on whether exports should be allowed, which means they are effectively banned.
A spokesperson for the Dubai Multi-Commodities Centre, which includes one of the world's largest diamond exchanges, said no diamonds from Marange would now be permitted.
"We can confirm that the UAE KP office is in full compliance and a ban on Marange diamonds entering the UAE will remain in place until further instruction from the KP," the spokesperson said.
The rough-diamond trade in the UAE in 2010, including diamonds from Zimbabwe, was worth more than US$22 billion (Dh81bn).
US embassy cables released by the whistleblowing website WikiLeaks this month allege the involvement of Mr Mugabe's wife and sister and senior government officials in funding illegal panning in the Marange fields, smuggling the diamonds overseas and funnelling the profits to the military.
Advocacy groups say Zimbabwe must remain excluded from the certification process because of widespread violence and a growing military presence in the mines.
The KP set up a process intended to ensure Zimbabwe's eventual compliance. The situation improved, but "there was still evidence of state-sponsored involvement in forcing people to dig, and evidence of state involvement in illegal smuggling across the border", said Alan Martin, research director at Partnership Africa Canada, a group that opposes Zimbabwe's inclusion.
A KP meeting in July set up a scheme that allowed Zimbabwe to export two batches of Marange diamonds. Subsequent meetings were unable to reach a decision on "the extent of required compliance yet to be applied by Zimbabwe", according to a KP representative.
"As of this time an arrangement to resolve the situation is still under discussions so the ban is still in force," he said.
Diamond traders in Dubai say they will comply with the ban, and that it would probably not hurt larger retailers.
"From the beginning the DMCC and Dubai have been very strict on the Kimberley Process and I think it's a smart decision and the correct decision to go with," said Rihen Mehta, the executive director of Rosy Blue, a large Antwerp-based diamond trader and manufacturer with a branch in Dubai.
"We respect all the ethical practices that are followed and if Marange happens to be cleared, we will deal with them. If it is not cleared, we will not deal with them," he said.
Mr Mehta said his company had begun researching the viability of buying Marange diamonds after the KP's July decision, but had now abandoned the idea.
"The moment there is no clarity you cannot touch them any more," he said.
Though some of the diamonds may have made it into the market, the bigger players in the diamond industry were unlikely to be involved, and they would face little loss of business in the meantime, he said.
Mr Mehta said the trade was growing before the ban, when people were considering it.
"But it was a short period since approval, so there was no real business that had happened," he said.
Dubai's diamond exchange, founded in 2002, is the fourth-largest global trading centre in the world by sales.
A cable from the US Embassy in Harare sent in January 2009 alleged that money from the sale of Marange diamonds was being diverted from the Reserve Bank of Zimbabwe to the country's military. The military was also increasingly present in the mines.
More than 200 bodies were found in morgues at provincial hospitals after the police and military conducted Operation Hakudzokwi ("You Won't Come Back") to clear out individual diamond panners.
The cable said the diamond trade continued unabated, with foreign buyers purchasing the diamonds in the Mutare province and across the border in neighbouring Mozambique.
Another cable dated late 2008 alleged that top Zimbabwean officials and elites were hiring individual panners to hand-extract diamonds from the fields before selling the undocumented diamonds to foreign buyers.
The individual panners sold some of the diamonds to representatives of the officials or to foreign buyers paying in hard currency.
Diamonds bought by foreign buyers were sent to Dubai, or shipped to Belgium, South Africa or Israel for cutting.
"The diamond frenzy in Chiadzwa has led to hundreds and possibly thousands of homicides," the cable alleged.
The Marange fields are in Chiadzwa province.
"I think the Wikileaks revelations are interesting in the sense that they confirmed what we've been saying for years now," said Mr Martin, who conducted field research in the Marange. "It's a wake-up call to those people who've been denying this as an issue."