Non-Canadian Rough Might Slip Into Country Agency Warns

A Canadian Intelligence agency has warned in a secret report that eastern European crime groups might try to smuggle rough diamonds into the country and offer them as Canadian mined stones.

The report, written by the Canadian Security Intelligence Service (CSIC) and released under the federal Access to Information Act, warns that the “Potential exists for criminal elements to 'seed' smuggled 'conflict diamonds' into the Canadian production line and fraudulently market them as bona fide Canadian stones”.

Last year the CSIC said in a public report criminal activities included “manipulating diamond valuations to distort the amount of taxes to be paid, trading illegal rough diamonds or embedding illicit diamonds into legitimate diamond markets”.

In the latest report, written in March, the agency expressed concern that smuggled goods would “taint the Canadian diamond industry's image and jeopardize the projected wealth of the industry”.

Canada, the third largest producer of diamonds, is trying to advance its diamonds by, among others, emphasizing that they are conflict free. A public fear that Canadian goods are tainted by outside goods, possibly from western Africa where civil wars prompted the Kimberley Process, will cause the local diamond industry financial damage.