The Kimberley Process embargo on the Central African Republic (CAR) diamonds, while intended to sever the link between the precious stones and armed conflict, ultimately created a cascade of damaging consequences that hurt the very people it was meant to protect.
A new IPIS report released last month shows how these well-intentioned sanctions backfired spectacularly, with artisanal miners bearing the brunt of the economic fallout while armed groups simply diversified their revenue streams.
As early as 2016, the embargo's economic impact became painfully clear. Plummeting diamond prices under sanction pressures forced thousands of artisanal miners to abandon their traditional livelihoods. Many turned instead to gold mining, which offered easier financing options and remained free from international restrictions.
This mass migration inadvertently created new opportunities for armed groups, who quickly shifted their focus to control the burgeoning gold trade.
The sanctions thus failed in their primary objective while creating fresh challenges.
The collateral damage extended far beyond ineffective deterrence. The vacuum left by legitimate diamond trade was rapidly filled by sophisticated smuggling operations, with criminal networks establishing elaborate trafficking routes.
Meanwhile, the fundamental issues plaguing CAR's mining sector - systemic corruption, chronic insecurity, and weak governance - remained stubbornly unaddressed.
The reports reveals that the Kimberley Process, constrained by its narrow mandate and political constraints, proved unable to tackle these deeper structural problems.
The 2024 decision to lift the embargo now stands as a questionable milestone. Rather than representing a reward for genuine progress, the move appears largely driven by geopolitical expediency, according to the report.
Below are the major talking points of the report.
What was the intended purpose of the Kimberley Process embargo on CAR's diamonds?
In 2013, the Kimberley Process (KP) — a global initiative operating a certification scheme to stop rebels from financing their operations through diamond revenues — imposed a rough diamond export embargo following a violent coup and widespread reports of rebel financing through diamond mining and trade.
What stalled progress that had been achieved leading to the embargo being partially eased for almost four years?
While the embargo was partially eased between 2015 and 2019, further progress stalled amid rising geopolitical tensions, particularly following the arrival of Wagner Group mercenaries in CAR and growing concerns over Russia’s expanding influence in the country’s security and mining sectors. Most mining zones remained under embargo until November 2024, when the KP – rather abruptly – lifted the remaining restrictions, citing improved conditions.
Who was most negatively affected by the embargo according to the findings?
Key findings show that the embargo – though intended to prevent conflict financing – often harmed artisanal miners (ASM) more than armed groups. Before the 2013 crisis, diamonds – produced almost entirely by ASM – accounted for nearly 40% of the country’s official export value, ASM has historically been a vital source of income, supporting an estimated 13% of the population, according to a 2009 IPIS study. The 2013 KP embargo banned diamond exports but did not halt mining. In some areas, such as Sam Ouandja in the east, activity even surged as armed groups sought to bolster revenues. The embargo did disrupt the sector’s socio economic fabric. Many Muslim traders who had been pre-financing ASM operations fled to Cameroon, breaking traditional supply chains. As a result, miners faced worsening conditions, including falling diamond prices, rising costs and increased dependence on armed groups and criminal networks for sales. This increased their vulnerability to intimidation, violence and exploitation. Lacking knowledge of their diamonds’ value, miners were moreover exposed to unfair pricing practices, deepening their hardship.
Why did many artisanal miners shift to gold mining starting in 2016?
Starting in 2016, falling diamond prices and worsening economic conditions prompted an increasing number of artisanal miners to shift to gold mining, which was easier to self-finance, not subject to sanctions, and increasingly became a significant source of conflict financing.
What were the limits of the KP’s compliant zones?
The establishment of KP-compliant zones in western CAR from 2016 aimed to normalise diamond trade, but the results were unsatisfactory. While these zones – historically accounting for 65-75% of diamond supply by volume – redirected some production into formal channels, smuggling remained dominant, sustained by entrenched criminal networks. The partial lifting of the embargo did arguably contribute to pacification in areas like Boda, where reduced tensions and improved security enabled Muslim miners to return and work alongside Christians peacefully. However, miners report that diamond production in compliant zones never fully recovered, as investors remained hesitant, viewing the sector as too risky – both reputationally and financially – due to the partial embargo. In the past many foreigners, including Belgians and French, came to visit our mines. They brought equipment like water pumps, fuel, pickaxes and shovels and invested in our activities.
What unintended consequence did the embargo have on the diamond trade?
Smuggling has long been part of CAR’s diamond trade, but following the embargo, it quickly became the norm. The surge in illicit diamond volumes required larger logistical operations and attracted war profiteers and criminal enterprises adept at exploiting instability to maximise profits and launder money. A notable example is Aziz Nassour, a notorious diamond smuggler that has been linked to Hezbollah. He reportedly arrived in Bangui in 2016, just one year after being removed from a UN travel ban for his involvement in conflict diamond smuggling in Liberia. These criminal networks operate opportunistically, leveraging political connections to sustain their activities while collaborating with armed groups when beneficial. Lebanese networks, already influential in both legal and illegal trade before the embargo, significantly expanded their influence and operations. They established strong ties with political figures in CAR and Cameroon, who profit from and facilitate the illicit trade through collusion and corruption.
The smuggling ecosystem has grown diverse, involving Chinese, Indian, European, West-African and Russian networks, alongside local businessmen, political elites, and opportunistic criminals. One striking case involves a Dutch drug cartel that allegedly obtained false diplomatic passports through the CAR’s economic mission in Brussels, facilitating travel to launder drug money through CAR’s gold and diamond trade. Another example is a crime ring involving Portuguese MINUSCA peacekeepers reportedly smuggling gold, diamonds and drugs via military planes. Furthermore, miners in CAR’s western region reported Nigerian smugglers navigating via hidden forest routes on horseback.
Why is it difficult to curb diamond smuggling in CAR?
Diamond trading in CAR is very fragmented and often informal, making it difficult to regulate and oversee. These structural vulnerabilities provide opportunities for illicit actors to circumvent KP controls. The embargo’s partial lifting was intended to bolster the formal sector, but in the absence of a hands-on and adaptable approach that fully accounted for this complex reality, it failed to curb smuggling and, in some ways, even facilitated it. In 2023, CAR had around 250 licensed traders, yet most record minimal official transactions and few renew their licenses after a year. This suggests that many traders and transactions escape government oversight. Another vulnerability lies in the structure of mining cooperatives, which benefit from lighter fiscal obligations than companies and were previously authorised to export diamonds – a right that was revoked under the 2024 mining code. By 2019, around 350 cooperatives were registered of which a dozen engaged in legal exports. Several are allegedly used as intermediaries or fronts for illicit operations, including those linked to foreign actors—particularly Chinese semi-mechanised ventures—and politically exposed persons.
What deeper structural issues did the embargo fail to address?
It failed to address deeper structural issues such as corruption, insecurity, and the unrealistic expectations placed on overseeing a highly complex and fragmented domestic and international supply chain.
What is the state of formal trade in CAR?
Since the partial lifting of the embargo, the formal trade has struggled to regain ground, as smuggling remained far more attractive – offering tax evasion, fewer administrative hurdles, and opportunities for trade-based money laundering amid near-total impunity and collusion with state services.
Source: IPIS
Between 2016 and 2019, official exports never exceeded 15% of pre-embargo levels (see graph above). A modest spike in 2018 resulted from Sodiam’s one-off export of its forensically audited stock of over 66,00 carats, after which the company ceased operations. Following the KP’s shift to ex-post controls in late 2019, exports rose but still stayed below 25%. A buying house representative lamented: The minimal exports declared by many traders raise suspicions about how they can legally sustain operations, pay license fees, and cover taxes in a cash-intensive business. It is suspected that various traders conduct small legal exports to maintain paperwork and justify their business, while trading larger volumes off the books. Improved oversight of purchases, sales and stocks was mandated under the KP operational framework, yet KP sources indicate that such inspections were either not carried out or their findings were not shared with the KP.
What does the future hold for CAR following the lifting of the embargo in 2024?
With the embargo now lifted, CAR’s diamond trade has fully reopened. While criminal networks have always found ways to bypass restrictions, the doors to the international market now stand wide open. The anticipated increase in legal exports may also create new opportunities to launder diamonds smuggled from other countries. Russia, for instance, could potentially channel its G7-sanctioned diamonds through CAR. Normally, a sharp increase in exports would prompt scrutiny, but with all mining zones now open, distinguishing between genuine trade growth and laundering will become even more challenging. To mitigate these risks, stricter traceability and vigilance are crucial. Encouragingly, G7 sanctions on Russian diamonds have spurred progress in traceability initiatives. This, combined with rigorous due diligence, can help ensure that CAR’s diamond trade supports development and avoids fuelling conflict.
Why do you think CAR KP failed in its core mission in CAR?
The embargo harmed vulnerable mining communities while not succeeding in curbing illicit activity. Although conflict financing through diamonds declined, this was largely due to the embargo accelerating a shift toward gold mining, alongside the Wagner-backed counteroffensive. The embargo arguably lacked adaptability and supportive measures for fraud control, ASM support and formalisation. Ironically, these shortcomings played no role in the decision to lift the embargo, which was hailed as success story by proponents within the KP. The KP plenary celebrated the embargo’s end, but failed to present an actionable plan to address systemic fraud, corruption, smuggling, and insecurity in diamond mining areas. By lifting its last conflict diamond embargo, the KP has effectively implies that conflict diamonds no longer exist. This raises existential questions about its continued relevance. If the scheme cannot recognise conflict diamonds in CAR—where armed actors still exploit parts of the diamond trade—it is unlikely to do so anywhere else. Moreover, the growing tendency to prioritise sovereignty over meaningful enforcement seriously weakens the KP’s conflict prevention function.
What should be done to transform CAR’s diamond sector from a source of instability into a pillar of sustainable development?
• Revitalise ASM support programs: Strengthening health and safety, diamond valuation knowledge, environmental practices, business skills; and alternative livelihood development. • Improve oversight and traceability: Enhancing government capacity to monitor, regulate and support diamond mining and trade; including progressive advances in traceability while transparently acknowledging remaining gaps and risks.
• Promote transparency and governance: Comprehensively and transparently mapping ASM sites, LSM licenses, beneficial ownership, diamond production, and revenues, as a crucial step to improving sector oversight, curbing corruption and ensuring fair resource management.
• Fight corruption and organised crime: Strengthening law enforcement, including international cooperation, to deter and prosecute fraud with a focus on key and known figures in smuggling networks.
• Strengthen civic engagement and community empowerment: Protecting civic space and enabling civil society to monitor mining areas and empower mining-dependent communities.
• Promote regional cooperation: Scaling-up cross border initiatives to professionalise ASM and fight smuggling; building on the KP’s regional approach for central Africa, while expanding the scope to include gold, now a major driver of conflict and criminality.
• Reinforce industry accountability: promoting and expanding due diligence practices across the diamond supply chain to ensure that revenues support peace and development rather than conflict and crime.
These efforts require sustained commitment from government, industry and civil society at national, regional, and international level. Without meaningful, concerted action, the cycle of mineral exploitation, smuggling, and conflict risks repeating itself— regardless of whether an embargo is in place.
The warning is clear: Without these comprehensive reforms, CAR's diamond sector risks becoming either a renewed source of conflict financing or, like its gold trade, another ungoverned space ripe for exploitation. The end of the embargo must mark the beginning of meaningful transformation rather than simply another turn in the cycle of failure. The alternative - a return to business as usual - would represent not just a policy failure, but a moral abdication of responsibility to CAR's mining communities and global consumers alike.
Conflict & Diamonds in CAR
Why was the KP embargo imposed on CAR in 2013?
The embargo followed CAR’s 2013 coup, which triggered civil war and reports of rebels financing violence through diamond mining. The KP aimed to block conflict diamonds from global markets (Page 5, 23).
Did the embargo succeed in cutting rebel financing?
No. Initially, armed groups expanded control over mines to offset lost revenue. Later, conflict financing shifted to gold, which surpassed diamonds as a revenue source (Page 5, 15–16).
How did Wagner Group exploit CAR’s mining sector?
Wagner secured mining permits, violently displaced artisanal miners, and collaborated with smugglers to trade diamonds and gold. They were also accused of human rights abuses near mining sites (Page 19–22).
How did the embargo affect artisanal miners?
Miners faced plummeting diamond prices, exploitation by smugglers, and forced shifts to gold mining. Many sold diamonds at a fraction of their value due to "risk premiums" charged by traders (Page 28–30).
What role did smuggling play during the embargo?
Smuggling became the norm, with diamonds trafficked via Cameroon and Dubai. Criminal networks, including Lebanese and Russian actors, profited from weak enforcement (Page 35–37).
Why did the KP lift the embargo in 2024?
Geopolitical pressure (led by Russia and African KP members) and CAR’s lobbying framed the embargo as harmful to sovereignty. The KP cited "improved conditions," though structural issues persisted (Page 26–27).
What were the KP’s key failures in CAR?
The embargo harmed miners without curbing illicit trade, lacked adaptability, and ignored gold’s rise as a conflict mineral. KP controls were undermined by corruption and mixed-origin diamond laundering (Page 40–42).
What risks remain after the embargo’s lifting?
Smuggling networks persist, Wagner’s influence lingers, and CAR’s weak governance may allow conflict diamonds to enter markets. Gold remains a major conflict resource (Page 42–43).
What reforms are needed for CAR’s diamond sector?
The report calls for traceability systems, ASM support, anti-corruption measures, and regional cooperation to combat smuggling (Page 43).
How did Russia influence the KP’s decision?
Russia, as KP chair in 2020, prioritized lifting the embargo. Its Wagner Group’s ties to CAR’s mining sector fueled distrust among Western KP members (Page 25–26).
Why was the embargo’s lifting controversial?
It coincided with CAR’s suspension by the EITI for lacking transparency and MINUSCA’s warnings of ongoing instability, revealing KP’s misalignment with other international efforts (Page 27).
Key Figures
Diamond exports pre-embargo (2012): 54% of CAR’s export earnings (Page 8).
Smuggled diamonds: Up to 95% of CAR’s diamonds during the embargo, mostly via Dubai (Page 40).
Wagner’s gold revenue from Ndassima mine: Estimated at $100M/year (Page 21).
Mathew Nyaungwa, Editor in Chief, Rough&Polished
