Liberia Remains Holdout from KP

For decades, Monrovia, the capital of Liberia in western Africa, has been alleged to be a major transshipment center for smuggled diamonds. Exports of illicit diamonds soared when civil war broke out in 1989. In time, these diamonds which were used to finance arms buying by the brutal rebel regime of Charles Taylor, became known as "conflict diamonds."

In 2001, the United Nations, imposed sanctions on Liberia, among which was a ban on rough diamond exports. The body promised to lift them when Liberia was found to be in compliance with the Kimberley Process, a system that guarantees in writing the legitimate origin of diamonds from all mining countries.

Although sanctions against other countries like Angola and Sierra Leone which had also trafficked in conflict diamonds were lifted, the UN refused to clear Liberian diamond exports in December 2003.

In late September 2004, when Liberia again appealed for revocation of diamond sanctions, the UN would not budge, saying the country has not instituted the proper mechanisms of compliance with the Kimberley Process. These involve printing difficult-to-counterfeit certificates of origin. Liberia says it doesn't have the money to produce these certificates. The UN is saying no paper, no exports. The United States is pondering aid to Liberia to underwrite certificate-of-origin printing costs.

Meanwhile, Liberia remains the world's sole holdout among diamond producers to the Kimberley Process.