By Ahmed Bin Sulayem
In recent weeks, discussions surrounding the Kimberley Process (KP) have resurfaced, fueled by a combination of emotional arguments, selective interpretations of data, and unrealistic expectations – and perhaps an attempt to induce financial gain. A forensic analysis by Budhai and Kumar (2025) has identified pricing discrepancies, trade anomalies, and financial loopholes within the diamond industry, raising valid concerns. However, some critics have wrongly attributed these financial irregularities to the KP itself, misrepresenting its role and purpose.
Let me be absolutely clear: The Kimberley Process was never designed to be a global financial watchdog, an anti-money laundering agency, or a tax enforcement mechanism. Expecting the KP to solve challenges outside its jurisdiction is as illogical as blaming Interpol for failing to regulate corporate tax fraud.
Yet, the debate surrounding the KP has taken on an emotional tone, particularly in claims that it is a “massive greenwashing operation” or that it “certifies blood diamonds as legitimate.” These statements are false and misleading. They do not serve the interests of responsible stakeholders seeking real reform.
The KP remains the most significant global initiative to prevent diamonds from financing armed conflict, and its impact is measurable. However, there is an urgent need to separate what the KP is actually responsible for from what should be addressed by financial regulators, customs authorities, and industry initiatives.
1. The Kimberley Process: What It Is and What It Is Not
The Kimberley Process Certification Scheme (KPCS) was created with a specific and defined purpose: to prevent the trade of diamonds that fund rebel movements seeking to overthrow legitimate governments. Since its establishment in 2003, the KP has:
· Reduced conflict diamonds from an estimated 15% of global trade in the 1990s to less than 1% today.
· Created the first global tracking system for rough diamonds, ensuring that participating countries adhere to minimum certification standards.
· Brought together governments, industry, and civil society in an unprecedented cooperative framework.
However, some critics attempt to judge the KP by standards it was never designed to meet. The latest reports blame the KP for pricing fluctuations, tax loopholes, and misinvoicing practices—issues that fall outside its mandate.
Let’s be clear: The Kimberley Process tracks carats, not financial transactions. Trade mispricing, tax evasion, and illicit financial flows are real problems that deserve attention, but they must be addressed by the right institutions—not by distorting the role of the KP.
2. Misreading the Numbers: The Faulty Logic Behind the Criticism
The trade “Value Gap” – A Misinterpreted Economic Reality
Critics highlight that diamonds imported into diamond trade hubs have a significantly lower per-carat price than their subsequent export value, suggesting possible profit shifting or undervaluation at the point of origin.
But let’s apply logic: The same pricing dynamics occur in other global commodity markets. Whether in gold, coffee, or crude oil, producer countries often export raw materials at lower prices, and pricing increases at trading hubs due to valuation adjustments, reclassification, or tax efficiencies.
The KP was never designed to regulate tax policy or commodity pricing. These issues require customs enforcement, OECD tax rules, and AML (Anti-Money Laundering) compliance frameworks, not a certification scheme for conflict prevention.
Dubai is a free trade hub. The nature of a trading center means that diamonds can be valued differently based on market conditions, demand, and buyer pricing mechanisms. This does not automatically imply wrongdoing.
The Mauritius “Disappearance” – An Incomplete Picture
Reports that Mauritius imported $400 million in diamonds between 2018-2023 but exported only 2% have led to speculation about hidden stockpiling or trade-based money laundering. But what is missing from this analysis?
Stockpiling in trade hubs is a common industry practice. Diamonds are often held as investment assets before eventual resale.
No evidence is provided that these diamonds re-entered the market illegally. The claim that KP should track intra-country stockpiling assumes an enforcement role that was never part of its design.
The focus should be on customs enforcement and financial regulations, not on changing the KP’s core function.
The Zimbabwe “Export Surplus” – A Lack of Context
Zimbabwe’s reported exports in 2019 exceeded its official production numbers, raising concerns about illicit diamonds being “washed” into the legal system. However:
Stockpile sales are a legitimate explanation. Countries frequently hold diamonds from previous years and release them when market conditions improve.
Production reporting in resource industries is rarely linear. Delays in production reporting and changes in government stock release policies often cause statistical distortions.
Rather than implying corruption, this calls for greater transparency in production reporting and customs oversight.
3. Where the Focus Should Be: Real Reforms, Not Misplaced Criticism
What Needs to Happen: Strengthening Diamond Governance Without Dismissing KP
The Budhai and Kumar report highlights important areas of concern, but its solution—expanding KP to cover pricing, financial crime, and stockpiling—misunderstands the role of an international certification scheme. Instead, here’s what should actually happen: Strengthened Financial Oversight
The OECD, FATF (Financial Action Task Force), and tax authorities should enforce stricter rules on misinvoicing and financial crimes.
AML regulations should be applied rigorously at major trading hubs to prevent illicit flows.
In terms of customs and trade enforcement, governments must apply more rigorous valuation controls at export points to prevent systematic undervaluation.
Tax incentives and free zones must be better regulated to ensure they do not encourage unethical trade practices.
When it comes to industry-led traceability and ethical sourcing, the diamond industry should implement blockchain tracking and independent traceability systems to complement KP.
Voluntary initiatives like the Natural Diamond Council (NDC) and Responsible Jewellery Council (RJC) should lead in ethical supply chain verification.
4. The Future of the Kimberley Process: Evolution, Not Redefinition
The Kimberley Process is not a static system. It has evolved, and it will continue to evolve. But its evolution must be based on fact-based, practical improvements – not unrealistic demands for it to become a financial oversight body.
What the KP Is Doing Now
· Reviewing its core definition of conflict diamonds to consider emerging risks.
· Exploring new technologies, such as blockchain-based certification, to enhance transparency.
· Collaborating with industry, governments, and civil society to strengthen complementary governance mechanisms.
A Call for Responsible Dialogue
Criticism plays an important role in refining international frameworks. But constructive reform requires facts, not emotional rhetoric.
The Kimberley Process remains an essential global initiative. It is not perfect, but it is effective in its mission. Rather than blaming KP for challenges it was never meant to solve, stakeholders must focus on strengthening the right institutions for the right problems.
Conflict prevention? The KP is doing its job.
Pricing fairness and taxation? That is a job for financial regulators, tax authorities, and international trade organizations.
Traceability and ethical sourcing? The diamond industry itself must take ownership.
The Kimberley Process has always been about preventing bloodshed in the diamond trade. The real question is whether its critics will engage in a serious, fact-based dialogue—or continue misrepresenting its purpose for the sake of easy headlines.