Possible 'blood diamonds' seized in Anchorage

Customs officials confiscate more than $420,000 in stones

Posted: Friday, July 20, 2007

ANCHORAGE - The FedEx package from Hong Kong was labeled as a document, but when federal customs agents opened it during a routine inspection here, they found two cut and polished stones tucked inside a newspaper.

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"They appeared to be diamonds," Lance Robinson with the U.S. Customs and Border Protection said Thursday. "We had them appraised and confirmed as diamonds, and they were seized as smuggled goods."

The gems, destined for a New York City buyer, were the first of six shipments of smuggled or possibly "blood diamonds" worth more than $420,000 that were confiscated by customs officials in Anchorage since mid-May. Blood, or "conflict," diamonds are uncut stones mined in a war zone and sold to pay for illegitimate military actions, officials said.

Nationwide, more than $24 million worth of diamonds has been seized since 2006 by the agency, which monitors 325 U.S. points of entry, said Lynn Hollinger, a customs spokeswoman in Washington, D.C. The total value of the diamonds in Anchorage is fairly sizable, she said.

"It's not unprecedented but that's a good seizure there," she said. "It's a significant seizure."

All six of the shipments were intercepted at the local FedEx hub, but only the first two involved the same buyer and seller. Those also were the only packages containing smuggled cut diamonds, violating customs law by failing to properly declare the goods and concealing them within the shipment. U.S. law also requires goods valued at more than $2,000 to be backed by bonds, according to Robinson, the agency's port director for the Anchorage area.

The other four packages contained rough diamonds and involved different buyers and sellers. There are no obvious links between the cases that officials know of, Robinson said.

"They could be affiliated overseas," he said. "We don't know that."

Three of the shipments were bound for New York City from Hong Kong or Bangkok, Thailand. Other packages were sent from Bangkok to South Carolina and from Taipei, Taiwan, to Antwerp, Belgium.

The largest package contained 442 grams of rough diamonds valued at more than $300,000. The diamonds were beneath a layer of yellow quartz stones.

That shipment and two other packages containing uncut diamonds were not certified as required by the Kimberley Process Certification Scheme, an international program designed to track rough diamonds and certify their origins. The Kimberley Process was established with diamond industry support in 2002 amid escalating concern about "blood diamonds" that funded 1990s insurgencies that killed millions in Angola, Congo, Sierra Leone and Liberia.

None of the rough diamonds were sealed in tamper-resistant containers as required, either.

There have been no arrests, but all buyers and sellers have been notified and they have an opportunity to explain their actions. The cases are in the early stages of the forfeiture process, but Robinson said the smuggled diamonds will likely be returned after civil penalties are paid.

"The diamonds will probably be destroyed or retained by other agencies," he said.



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