Antwerp Blamed, Again
Corrected 16 November 2001
Christian Dietrich and Peter Danssaert
Diamondstudies.com
&
International Peace Information Service
Douglas Farahs Washington Post article Al Qaeda Cash Tied to Diamond Trade from 2 November 2001 raises serious allegations concerning individuals buying rough diamonds to conceal the funding of terrorist organizations. Farah concludes that Sierra Leones Revolutionary United Front (RUF) has sold diamonds to members of international criminal groups, namely al Qaeda, partially financing both the international terrorists and the Sierra Leonean rebels. Prolonged and intense warfare in several African countries has been blamed on the international diamond trade, resulting in an international campaign against conflict diamonds. Farahs article adds a new dimension to this campaign, highlighting alleged ties between African conflict diamonds and international terror networks, raising alarm in Europe and the United States. A possible connection between criminal syndicates and illicit diamonds has been suspected for several years, although exact details have eluded United Nations investigators, and perhaps even national intelligence organizations. Farahs article has exposed some evidence that al Qaeda has been able to use the diamond trade to hide money, thus raising many questions by the journalist community concerning the debate over an international diamond certification process that seemed likely to fail. This brief commentary will examine the articles premise, data, and conclusions.
Premise
The premise of Farahs article is actually quite complex and involves two distinct activities money laundering and maximizing profits through the diamond trade. Farah notes that men identified by the FBI as being key bin Laden operatives bought diamonds from rebels at low prices to resell them for large profits in Europe. Citing sources that provided the information, Farah notes that since July 2001 the diamond dealers have changed their tactics, buying far more diamonds than usual and paying premium prices for them. Farah appears to be explaining the sudden rise in official diamond exports from Sierra Leone from mid 2001 that alarmed legitimate members of the diamond industry. His reasoning, according to investigators, would be that al Qaeda perhaps anticipating its accounts would be frozen after the September 11 terrorist attacks in the United States, sought to protect its money by sinking it into gemstones, a commodity that can be easily hidden, holds its value and remains almost untraceable. This notion appears to be credible since diamonds are high value, low weight and easy to sell at recognized, though fluctuating, prices throughout the world.
The premise also raises several larger issues about the realities of the diamond trade and terrorist networks. It would be understandable if international criminal groups were involved in dealing with the RUF, one of Africas most brutal guerrilla groups, and through Liberia that is a common re-supply and diamond export point for the rebels. Dealing in diamonds is also a regular method to launder money since finances from drug deals, for example, can be used to buy illicit diamonds in Africa, which are smuggled to the United States, Europe, the Middle East or Asia where the diamonds are declared at customs and legitimized. Furthermore, profits can be much higher for those syndicates that are not concerned about exposure, and are willing to barter arms for diamonds with rebel groups. It would also seem probable that a group such as al Qaeda would use existing networks that are acquainted with the diamond market and rebel groups in West Africa.
The confusing piece to the puzzle is why dealers would frantically rush to buy diamonds immediately before September 11, losing considerable amounts of money in order to hide their wealth. If indeed al Qaeda were involved, would not the organization have performed this task at an earlier stage and at a less significant financial loss? The Washington Post article does not fully distinguish between purchasing diamonds from the rebels (which may not be discounted from market prices as heavily as assumed) and money laundering operations. The official export figures of Sierra Leone did jump in the months preceding September, but the countrys official exports are anyway very low. Buying legitimate diamonds in Africa involves high costs meaning that any dealer willing to offer unreasonably high prices for official diamonds must also be willing to lose a considerable amount of money in the process. Such activity is only appropriate when money laundering is occurring, but given Sierra Leones small official export tally, the role of official diamonds in laundering schemes may not be as large as the article envisions. Certainly laundering with conflict diamonds is possible, but then it may be unlikely that the same dealers would be active in the official circuits or if so, they may not be the main exporters of diamonds, preferring to keep a low profile.
The motivation of criminal elements in the diamond business is subject to speculation. Contrary to Farahs assertion that a diamond holds its value, the trade is facing a significant crises, exacerbated by the terrorist attacks and prices have fallen by nearly 30% this year for certain categories of diamonds. If al Qaeda had assumed that the US stock market would decline and that the diamond industry would follow this downward trend from an already weak position, would it not have been easier to find another source of investment, such as gold which strengthened and is easy to sell quickly? Even if one wanted to secure wealth in a concealed and mobile commodity, such as diamonds, it would seem that polished stones would be easier to resell, especially in the United States. The possibility that criminal and terror syndicates deal with rebel groups in Africa, however, remains a solid supposition.
Evidence
Farahs article is based on unnamed sources. This makes the evidence presented appear to be less reliable, although one must assume that Farah accurately reports information presented to him, and has collected substantial secondary evidence from West Africa. Unfortunately, he provides no direct proof of the al Qaeda link. Farah alleges that Ibrahim Bah acts as a conduit between the RUF, and Hezbollah and al Qaeda, according to intelligence sources and two people said to have worked with Bah. Farah cites the relation between Bah and al Qaeda as being cemented during a visit by a top bin Laden advisor in September 1998, again according to two unnamed sources. These same sources also noted that Bah arranged for the visit of two more reputed al Qaeda operatives to Liberia.
Farah then works on a Belgian link to Bah and al Qaeda through two Lebanese diamond dealers he names as Aziz Nassur and Sammy Ossailly. This allegation is based on what Farah cites as sources, but he provides no further explanation as to their number or possible identity. Farah also notes that according to sources two suspected al Qaeda members visited Sierra Leone and used to talk on the radio to a person code named Alfa-Zulu, the code name that these sources cite as being that of Nassur [sic]. The evidence presented may seem a bit tenuous. Farah supports this claim by referencing the identification of the photographs of the alleged al Qaeda associates by RUF members. Details of exactly where and when these photographs were identified are not provided.
The absence of documented evidence and reliance on a few unnamed sources makes the article a bit problematic for the research community. The correct spelling of Nassur [sic] and Ossailly [sic] would have enhanced the overall credibility of the sources cited by Farah. Other details concerning the alleged activities of Nassur [sic] and Ossailly [sic] in Liberia/ Sierra Leone, such as the UN Security Council placing these two individuals on a travel ban for Liberia, would have provided a more substantial foundation for the article.
Nassour
It is difficult to ascertain which diamond dealer Farah is talking about when he cites the name Aziz Nassur. Diamond dealers in Antwerp know of only one other Lebanese with a similar name, Aziz Nassour, who allegedly has been active in West Africa through his collaborator Samy Ossaily, as well as in other parts of Africa. Nassour has an extensive history in the former Zaire, and according to diamond dealers in Antwerp and Central Africa, more recently in Rwanda and eastern Democratic Republic of Congo. Paragraph 127 of the United Nations Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the Democratic Republic of the Congo, presented to the Security Council in April 2001, cites Nassour as one of the main conflict diamond dealers in eastern Congo. The UN does not provide a first name or any other details concerning the accused even though Nassour is a common name in Lebanese diamond circles.
Statistics received by the author from the Congolese rebel group, Rassemblement Congolais pour la Démocratie (RCD-Goma), cite diamond exports by N-Frères in 2000 at almost 10,000 carats valued at $37,250, or a very low $38/carat (see diamondstudies.com, online publications). N-Frères was explained to the author by diamond industry sources in central Africa to be synonymous with Nassour-Frères, comprised of relatives of Aziz Nassour. Aziz Nassour is also connected directly or indirectly to companies in Belgium as outlined by Annex A.
Belgian Connection
The most incriminating evidence provided by the Washington Post article is the constant referral to the Belgian diamond trade, indirectly implicating Antwerp. Farah refers to Nassur [sic] and Ossailly [sic] as being based in Antwerp although no evidence is given to support this conclusion. It is also possible that they are both based in Africa, or elsewhere, and have connections to businesses in many countries ironically it is also possible to say that those who carried out the attacks on September 11 were based in the US. A graphic of The Diamond Link with Farahs article in the Washington Post reinforces this supposition, providing pictures of men on the FBI list of suspects, a detail of the RUF mining zones, and a main map of West Africa and western Europe highlighting a direct route for diamonds between Liberia to Antwerp. Farah concludes the article with a quote from a US investigator saying Antwerp is awash in Sierra Leonean diamonds, and they are going through Monrovia. Antwerp is not in truth awash in Sierra Leonean diamonds, which make up only a small percent of total African diamond production reaching Belgium. The quote does make one believe in the enormity of the problem, as does the graphic displaying a simple link between Monrovia and Antwerp. Diamonds could arrive directly from Monrovia to Antwerp, although there also have been several West African nations implicated in the trafficking of the regions conflict diamonds. These diamonds are often mixed into other parcels before arrival in Belgium, where there is a ban on diamond imports from Liberia. Conflict diamonds from the RUF can also move indirectly to any number of other European countries, the United States, Middle East or Asia where import regulations can be much weaker.
Singularly blaming Antwerp has been exhausted as a research tool. Antwerp does continue to import far greater quantities of diamonds from Africa than are exported legitimately, especially in regard to the Democratic Republic of Congo. Antwerp has very stringent diamond import regulations, unlike any other major diamond market or polishing center. Smugglers can disregard these regulations by refusing to declare the goods at customs and bring the rough diamonds into Antwerp illegally. Smugglers will also falsify the provenance of their diamonds, saying, for example, that diamonds they purchased in eastern Congo come from the Central African Republic instead; or that Liberian diamonds come from Guinea or Burkina Faso. If Belgian customs agents demanded official export documents from the country of last export (provenance), this would contravene European Union free trade regulations, and those of the World Trade Organization. Moreover, other major diamond trading centers, such as Israel, fail to publicly release their rough diamond import statistics categorized by country of provenance which is the only method to critique divergent volumes of diamonds exported from Africa, and those carat volumes imported to trading centers, or their neighbors. Belgium has justifiably been an easy target due to its prominent position in the rough diamond trade, but critics fail to question which countries might impose better regulatory systems. When criticism is raised, however, the High Diamond Council in Antwerp should have an appropriate and credible response to the allegations, especially when they concern names appearing in UN reports. The High Diamond Council has also ceased publicly distributing import statistics categorized by country of provenance.
Conclusion
The Washington Post article may have given new impetus to the international certification system outlined by the Kimberley process. The diamond industry and concerned governments, and especially those producing or trading in diamonds, have joined the Kimberley process to formulate a universal rough diamond certification scheme. Many see the proposed chain of warranty, from one countrys point of export to another countrys point of import, as a means to prevent the laundering of conflict diamonds into the official trade. Without commenting on the ability of such a system to prevent the commercialization of conflict diamonds in Africa, the Americas, Europe, Middle East and Asia, it does seem possible that those countries stalling the process may change their attitudes if a link between diamonds and terrorist organizations exists, or can be proven. The United States serves as the single largest global market for polished diamonds but the US government has played an unconstructive role in the Kimberley process. Perhaps if the US government believed that diamond sales from rebel groups in Africa, that have financed war and massive human rights abuses, were also funding al Qaeda, or other organizations capable of carrying out terror against US citizens, then Washington might finally act as a responsible member of the Kimberley process.
Farahs article can be found at:
http://www.washingtonpost.com/wp-dyn/articles/A27281-2001Nov1.html
Appendix A
This Annex is not meant to implicate Aziz Nassour in any of the allegations forwarded by Farah. Nor is it supposed to implicate the companies named in the annex in any of Nassours alleged activities. Rather, the following description and graphic indicates the generally complex network of shared holdings by Lebanese diamond dealers in Antwerp. The graphic considers links during the early 1990s, the late 1990s and currently (at least until late October 2001), with the distinction visually apparent on the graphic.
The true relationship between company directors and partners cannot be presented graphically since family and kinship ties are rarely expressed in corporate records, and many Arabic names appear quite similar when translated into English. Diamond dealers with no apparent link in Belgium may also work closely together in Africa where partnerships facilitate business. The complex nature of these corporate affiliations may not indicate that the activities of one partner are known by or greatly impact upon other partners.
The following information is based on records in the Belgian state monitor, which is valid until 24 October 2001. Directors are described as currently with a company if corporate changes were not registered with the state monitor before this date. We have assumed that afgevaardigd bestuurder means managing director while bestuurder means director.
Khalil Ibrahim Nassour, Mohamed Ibrahim Nassour, Francis Gerres, Aziz Ibrahim Nassour and Ibrahim Khalil Nassour all started the company Diamonds for Ever in 1985 in Antwerp, Belgium. Khalil Ibrahim Nassour was then one of the founders of K&N in 1991, while the others started a company named Echogem in 1991, with Aziz and Ibrahim Nassour serving as underwriters. The two latter companies were located at Vestingstraat 53-57 Antwerp. Abdul Magid Youssef Nassour was appointed a director of Echogem in 1997. He had previously started Cedar-Interco in 1993 with Abbas Jawad Macky; ASA Diam with both Abbas Jawad Macky and Ali Saïd Ahmad in 1994; and Apple Management with Abou Kasse, a Senegalese residing in Luanda at the time. There had been a previous connection between Abdul Magid Youssef Nassours companies and both Echogem and Diamonds for Ever: Francis Gerres was a director of Cedar-Interco (1993-2000) and Apple Management (1996-2000). Gerres, along with Khalil Ibrahim Nassour, also remained a director of Diamonds for Ever and K&N until both reportedly went bankrupt in 1999. Echogem and ASA Diam also appear to be linked. Not only did Abdul Magid Youssef Nassour serve as a director of Echogem (1997-2000), but Jaafar Mahmoud Ahmad is a director of both Echogem and ASA Diam; and Najla Ossaily, a current director of Echogem, resigned from ASA Diam in October 2001. One of the current directors of ASA Diam is Ali Saïd Ahmad. It cannot be confirmed that this is the same Ali Saïd Ahmad who is a director of ASA International and Lamis, in which Abdul Magid Youssef Nassour is also a director. Another director with Ali Saïd Ahmad in ASA International also represents ASA Diam and Lamis for tax purposes. ASA Diam, ASA International and Lamis were all located at the same address from 1997-2000. ASA Holdings Inc, located in Wilmington Delaware, USA, served as one of the first directors of ASA International.
Francis Gerres, who was one of the founders of Echogem and Diamonds for Ever, was also a director of Anar Belgium from 1993-1994, along with Huguette Van De Goor. This was concurrent with Gerres tenure as director of Cedar-Interco, along with Mrs. De Goor who still serves as a director of Cedar. Another current director of Cedar-Interco is Abdul Magid Youssef Nassour who helped create the company. A director of Anar from 1992-1994 had a similar name, Abdoul Magid Nassour although it has not been possible to verify if this is the same person. Anar was registered in 1988 in Antwerp by Hassan Khalil Malik and Lampard, an anonymous Panamanian company that became chairman of the board of directors of Anar.
Anar is connected to Alpha-Alpha, Alpha-Beta and Triple A Diamonds. Afif Ahmad, a director of Anar since mid 2000, founded Alpha-Alpha and Alpha-Beta in 1989 and 1990 respectively, and still serves as a director of both companies; Afif Ahmad had a registered address in Conakry, Guinea at that point but later gave addresses in Antwerp. Afif Ahmad is also a director of Triple A Diamonds. Hassan Ahmad, a director of Anar from 1994-2000 is a founder and current director of Alpha-Alpha and Alpha-Beta, and a founder and former director (1986-2000) of Triple A Diamonds. When Triple A was registered in 1986, it was recorded that Hassan Ahmad was born in Sierra Leone, but had a registered address in Lebanon and British citizenship as well as a US passport from Atlanta. Musa Ahmad, with a registered address in Kinshasa, Congo, was a director of Anar from 1994-2000, and helped create Alpha-Alpha and Alpha-Beta; while Moussa Ahmad, a current director of Anar with a different registered address in Kinshasa, is also a current director of Alpha-Beta. Ahmad Ali Ahmad (or Ali Ahmad Ahmad) is currently a director of Anar and helped create Triple A Diamonds evidence of the similarity is the same registered street number on Rubenslei, Antwerp.
Karim Rustom has been a director of Triple A Diamonds since 1988 and previously was a director of Sierra Gem Diamonds from 1988-1999. Karim Rustom also created Lamis in 1985. Ali Saïd Ahmad, who is currently a director of Lamis and ASA International, also served as a director of Sierra Gem Diamonds from before 1988 to the early 1990s at least.
