The European Union is trying to block the diamond smuggling route from Angola. Violence won’t be far behind. Dan Atkinson in Antwerp, Alex Duval Smith in Johannesburg and Owen Bowcott investigate
It was an unpromising start to Europe’s tough new policy on diamond smuggling. Yards from Antwerp’s grand railway station, an African in traditional dress – modified with jeans and trainers – tempted passers- by with a gemstone necklace. It was a safe bet that the stones had been nowhere near legitimate marketing channels and that the proceeds of any sale would not be making a tax contribution to the shrinking of Belgium’s astronomical public debt.
But then the street trader may have been unaware of the European Council’s decision of July 28, prohibiting smuggled Angolan diamonds from sale within European Union boundaries.
On paper, this move – a retaliation for an alleged massacre – ought to have put out of business the National Union for the Total Independence of Angola (Unita) the rebel army that has become one of the jewel trade’s biggest operators.
Northern Angola, Unita’s stronghold, is the greatest single source of smuggled diamonds. Antwerp is the global diamond-trading capital. Blocking the Angola-Antwerp corridor should have brought Unita to its knees.
But enforcement is everything, and even those on the legitimate side of the 3,7-billion-a-year diamond trade have doubts about the ability of the EU – and, in particular, Belgium’s demoralised police – to stamp out one of the most lucractive rackets in the world.
One industry source said the Antwerp community was “sceptical”. Unita diamonds amount to 225-milllion a year, one-sixth of the entire world’s trade. The smugglers are not going to give up profits of that size without a fight.
The fight could turn very nasty. When it comes to violence, diamond racketeers are at no disadvantage to their opposite numbers in the drugs trade.
Antwerp itself has long been the battleground for a shadowy war between the racketeers and the agents of lawful authority and of the De Beers company, the South African company that controls the “single channel” through which about 80% of the world’s diamonds are marketed; and the smugglers’ vengeful arm is long.
On May 18 1955, an East African Airways Corporation Douglas DC3 went missing on the last leg of its journey from Dar es Salaam to Nairobi. Its wreckage was later found 4 290m up Kilimanjaro. All four crew and 16 passengers were dead. An inquiry decided the probable cause was pilot error.
But not according to diamond mythology, which claims the plane was doomed not by the pilot’s actions but by the presence among the crew of an airline steward formerly employed by the British Overseas Airways Corporation (BOAC). In his previous career he had informed on 14 BOAC stewards involved in smuggling gems into Europe, losing them their jobs. Revenge, according to some in the diamond trade, came in the form of a bomb aboard the plane.
A tall story? Perhaps. But the diamond mafia was, and remains, in no hurry to put the record straight.
Today, that mafia has changed out of recognition as Asians, Russians and Africans elbow their way in alongside the Belgians, South Africans and the odd Briton traditionally dominant in this murkiest of trades. Unita brings a new dimension to what had been strictly private enterprise crime.
The rebel movement, which controls many of the diamond mines in the east of Angola, is said to buy arms from Eastern Europe with the sales proceeds. Small planes from South Africa, Zambia and Zimbabwe are often seen over northern Angola. They are said to carry arms or mining spares on their way in and diamonds on their way out.
When diamond smuggling is involved, violence is never far away. This aggression has the effect of keeping open the pipeline from the African diamond fields to Antwerp and other centres – including London’s relatively modest Hatton Garden.
On the pavement outside Caf De Klok in Pelikanstraat, young men in tracksuit-bottoms hold an intense conference interrupted only by a cellphone call.
About 6 400km to the south, a third man, Godfrey Chitengi, has just finished a month’s walk from Lunda Norte in northern Angola to the Zambian border.
With half-a-dozen diamonds hidden in his jeans pocket, he has braved landmines and swum rivers.
Chitengi is a garimpeiro – an illegal miner – and the financial rewards of his labours will easily compensate for the dangers.
In Zambia, his first stop was to see a a certain Christian missionary from a United States church, who has an electronic diamond-tester at his house near the village of Zambezi.
“We know three grades – A, B and C – and this man can verify them for us. I get most of my stuff from people working in mines controlled by Unita. If he likes what he sees he will call one of his buyers, who will travel here from Lusaka [the Zambian capital] or Namibia. Many of the buyers are South African,” said Chitengi.
“These,” he said, opening his palm, “are worth about 1, 6-million kwatcha [R6 000]. I can also sell you emeralds, gold dust and six tusks of ivory.” This is the heart of Africa’s diamond-smuggling underworld, where lives are lost for a few stones wrapped in newspaper and deals are done in remote mud-brick huts.
Once in Zambia – or any other of Angola’s neighbours – the stones can be relabelled with a different country of origin, circumventing the EU embargo. This sort of deception can be spotted, with resources and manpower.
But again it raises the question of how serious the EU and its member states are about taking on the smugglers.
For the good burghers of the Antwerp trade, an aggressive anti-smuggling drive is the last thing they need. The diamond quarter is already reeling from a series of scandals relating to tax evasion and fraud, eagerly seized upon by its enemies in the right-wing Vlaams Blok movement that has polled one-third of votes in the city.
A brief tour of the diamond area, noting the preponderance of Asian traders and businesses with names like Abraham Jewellery or Albert Rozenthal, discloses why Flemish ultra-rightists rub their hands at any opportunity to attack the gemstone trade. The Diamond High Council, the industry body, is anxious to put both scandals and traditional secrecy behind it and reinvent the quarter as a responsible and vital player in Belgium’s economy.
The quarter has been renovated, with a fibre optic cable connecting all premises and bourses for security and communications purposes. Television cameras are everywhere, and guards sit in cabins at the main entrances. A vast new diamond exchange building is planned.
The council said: “[The] sector holds its head up, and does not accept the generalisation that diamonds are similar to illegal practices.”
For the Belgian authorities, enforcing the Unita embargo calls for a balancing act. Antwerp’s traders, with their profits under pressure, their Vlaams Blok enemies making hay, their accounts under scrutiny and their tax breaks under threat from Brussels harmonisation plans, may declare any strict enforcement to be the last straw and pack their bags for Tel Aviv or Bombay – two booming rival diamond centres. It has happened before. A change in British value added tax policy on uncut stones during the early 1980s initiated a steady decline of Hatton Garden as a gemstone centre.
Antwerp benefited. “They [the traders] just got off the plane one stop early,” said a Hatton Garden diamond merchant. In this most mobile of industries, a trader needs little more than a cellphone and a convivial caf in order to do business.
But if Europe takes an aggressive line on the diamond smugglers, its place as the world’s diamond hub could be lost as legitimate traders head elsewhere, leaving the racketeers behind to fight a dirty war against the authorities.