CIA Transnational Anti-crime and Anti-drug Activities - Conflict Diamonds and Militant Financing

Conflict Diamonds and Militant Financing

After the 1998 attacks on U.S. embassies and civilian facilities, in Nairobi, Kenya and Dar-es-Salaam, Tanzania, the Clinton administration froze some $240 million in assets belonging to Afghanistan's Taliban government and Osama bin Laden. Al-Qaeda, caught by surprise, searched for an alternative to confiscated gold reserves.

The decision was made to shift funds from the formal banking sector into negotiable commodities, such as these were diamonds and tanzanite. These minerals were already in places without tight controls:

• Tanzanite is only found in a small corner of Tanzania,
• diamond trade al Qaeda tapped into in West Africa was centered in Liberia, where the corrupt regime of Charles Taylor also controlled diamonds mined by his allies in neighboring Sierra Leone. In Sierra Leone the diamond fields were under the control of the Revolutionary United Front (RUF).

"Al Qaeda already had long-standing ties to the gemstone trade. Documents and testimony presented during 2000 the trials of Wadih el Hage and Mohammed Sadeek Odeh show that al Qaeda, even before the U.S. embassy bombings, was dealing extensively in diamonds, tanzanite, amethyst, rubies and sapphires, mostly as money making ventures. According the trial transcripts, senior al Qaeda leaders were deeply concerned about the possibility that an al Qaeda operative was carrying a large quantity of stones when he drowned while crossing a lake."

"Commodities- or trade-based money laundering includes the smuggling of bulk cash and the evasion of federal reporting requirements used to track money laundering with commodities such as diamonds, precious metals, gold, and tobacco."