Thousands of carats of diamonds are being hidden by exporters and taken out of #Cameroon without the appropriate Kimberley Process Certification Scheme (KPCS), a recent finding by RELUFA - the Network for the Fight Against Hunger, has shown.
The report which analyses some of the challenges and policy gaps that have emerged since 2012 when Cameroon first joined KPCS shows that diamonds leave Cameroon without passing through official channels for the appropriate taxes to be paid before export as required. It also discloses that fake KP certificates originating from Cameroon are regularly discovered and reported in Europe and in other #Diamond export destinations.
Going by the investigations spearheaded by Jaff Napoleon Bamenjo for RELUFA, the contribution of diamond sales to government revenue in the country is still very marginal when compared with other countries in the Central African sub region like the Central African Republic. We gathered from the Kimberley Process database that Cameroon generated a total 73,431,380 FCFA from its diamond export in 2015 while the Central African Republic before its suspension from the Kimberley Process in 2012 generated 30,171,618,000 FCFA from its diamonds exports in 2011.
According to RELUFA officials, the high rate of diamond export tax in Cameroon largely accounts for the smuggling of the precious. They note that upon joining the Kimberley process in 2012, the diamond export tax applicable in Cameroon was 12.5 %.
Taxes promoting smuggling
The civil society organization notes that the current diamond export tax rate in Cameroon is higher than other diamond export taxes in the region, thereby encouraging diamond smuggling outside of Cameroon’s borders. “It therefore jeopardizes both the ability to collect revenue and also risk Cameroon being seen as non-compliant with KPCS standards,” the report adds. Fears are high that when the Central African Republic is reinserted into the KP, it may encourage more Cameroon diamonds being smuggled through CAR with comparative low diamond export tax which is 12% compared to the 24.5% currently in Cameroon.
Against this backdrop, RELUFA has advanced that the high diamond export tax is a policy contradiction that Cameroon should avoid. Officials argue that should government reduce the tax, it will help in its ability to comply with KPCS principle of ensuring that all diamond export takes place through official circuits.
Created in 2003 by UN General Assembly Resolution 55/56, the Kimberley Process Certiﬁcation Scheme served as a response to the public outcry that emerged at the end of the 1990s about diamond fueled conflicts. The KPCS is precisely a joint government, industry and civil society initiative aimed at eliminating the trade in conflict diamonds commonly defined as “rough diamonds used by rebel movements or their allies to finance armed conflicts which undermine legitimate governments. The KPCS currently has 54 participants representing 81 countries with the European Union and its member states counting as a single participant. #HighTax