Prior to the recently held Annual General Meeting (AGM) of the World Diamond Council (WDC) in Antwerp, the Government of the Central African Republic launched “a full overhaul of the country’s alluvial diamond mining sector”, said a press release from Peter Meeus, designated Special Advisor Diamonds to the President of the Central African Republic. The reforms were initiated under a Presidential Decree No. 19.282 of 30.9.2019.  

“Following the adoption of Presidential Decree No. 19.282 signed by the President and Head of State Faustin Archange-Touadéra on 30 September 2019, all existing buying houses can participate into demonstrating their capability to formalise exports and to withdraw from any engagement in the informal circuit,” the release stated. “Above all, there will be an obligation for each buying house to export at least US$ 3 million per quarter and a withdrawal of the licence will follow in case of failure of the minimum amount of exports.”       

The thinking behind, and the reason for, the need for drastic measures can be found in the dwindling diamond production of the country, due to various reasons.

The statement notes that while in 2012, total production of CAR amounted to around US$ 62 million, by 2018 it had dwindled to US$ 2.3 million; and that, in 2017, after the partial lifting of the embargo, things went well for a while and 113,000 cts. were exported. However, in 2018, production fell again to almost nothing – just 12,000 cts; a figure which amounts to a mere 3% of 2012 production.

“Going forward, the CAR’s Government will stand for a bold new and drastic approach where full transparency and proper due diligence protocols, traceability of individual parcels and OECD Due Diligence Guidance will be crucial,” the statement stressed.

The trial period set under the new policy will end on 31 December 2019. After this, the buying houses “that have passed the conditions” will enter into a contract with the CAR Government, which will stipulate the due diligence sourcing protocols.

The Presidential Decree also stipulates severe conditions for foreign buyers whose licences will also be withdrawn in cases of non-compliance with protocols set out by it.

Seeing the need for tax revenues to also start flowing in again to state coffers, a new finance law was passed on July 23, 2019, by which the export tax was reduced to 4%, in order to be competitive and in line with neighbouring countries.

The reforms will also be reinforced by the Mining Police; and local KP structures will be put in place.

“The Central African Republic thanks the international community for the assistance it has received,” the statement emphasised. “In particular, the Kimberley Process Certification Scheme where especially the work of the CAR Monitoring Team is applauded. The decision to shorten Kimberley Process (KP) approval procedures to seven days was crucial in the context of the on-going reform.”

The statement concludes by saying: “It is the CAR Government’s hope the reform process in particular the peace agreement of Khartoum of 6 February 2019 will bring the first positive results already in 2019 at the KP Plenary in New Delhi and will lead to a new Operational Framework which will allow a normalisation of the country’s exports.”