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Friday, August 01, 2014
Trinidad & Tobago Guardian Online
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Uncut Diamonds: The Trinidad-Canada Loophole
Toronto and Trinidad were bound by a strange link when Helena Freida Bodner was arrested at Pearson International Airport. According to the Royal Canadian Mounted Police, the 66-year-old Bodner was arrested on February 3, when she arrived in the country from T&T, carrying more than 10,000 concealed diamonds “in her body.” Ten thousand, two hundred and two diamonds to be exact. And the total value of these diamonds is estimated at around $400,000.
It was a news story worthy of an Ocean’s Eleven movie plot line but according to experts, Ms Bodner’s arrest is indicative of something much more serious, and potentially much more sinister.
Trinidad is not a diamond-mining country, and so the diamonds must have come from another country making their way through Trinidad (and Ms Bodner’s body) to Canada. It’s possible that the diamonds were then likely moving on to a fourth or even fifth destination. Authorities say the purchase of the diamonds must have been secured well in advance, as it’s unlikely that a smuggler would risk moving that quantity of diamonds without a guaranteed payment. So who was the purchaser on the other end of the shipment?
The possible answers are disturbing. Canada is a key player in the diamond production and distribution industry, ever since the northern part of the country was discovered to be diamond rich. The Ottawa-based Diamond Development Initiative helps to regulate the diamond industry, and was set up in part to counter the movement of illegal diamonds.
A substantial percentage of diamonds that are being moved illegally around the world come from African countries. The issue of so-called “blood diamonds” has been popularised by books, documentaries and a Hollywood movie. Now the world knows that slave labour is being used to mine the diamonds and then those diamonds are being used to finance violent insurgency movements. And other dangerous activities.
Christine Duhaime is a Canadian specialist in financial crime and anti-money laundering. On her Web site she cites the reasons why diamonds are preferable to using money to fund illegal activity. Diamonds “maintain their value, can be easily moved across borders virtually without detection and without having to declare them as part of a cross-border currency transaction.”
Duhaime also posted that “because they are personal property, they are not readily subject to confiscation by law enforcement and no currency exchange is needed. Nor can they be traced back to the source; thus proving they are proceeds of crime is exceedingly difficult.”
This is relevant to the Canadian context because a recent report by the Financial Action Task Force indicates that Canada, despite having stringent laws to deter this type of smuggling and laundering, has seen a number of cases where diamonds were being used as a type of currency for illicit activities.
The report, released in February by the Paris-based intergovernmental group, found that in Canada diamond money-laundering schemes were actively being used to hide financial assets, traffic drugs, and most disturbingly, fund terrorist activity.
“Diamonds could...be used to finance terrorism in a scenario where a donor or financier purchases diamonds legitimately, using lawfully derived funds, and then transfers the diamonds to a terrorist or terrorist organisation who use the diamonds in exchange for equipment or cash intending to finance terrorist activities.”
David M Luna heads anti-crime programmes at the US Department of State and on February 26, he delivered a speech at a conference in Morocco on the issue of security in Africa. His presentation talked about illicit trafficking of materials, including diamonds, and how they were intertwined with international terrorist networks.
“Illicit trafficking remains the lifeblood of the numerous bad actors and networks, creating vulnerabilities for nations. We must crack down on corruption at all levels and cut off the ability of kleptocrats, criminals and terrorists to enjoy the fruits of illicit enterprise that enable the financial capacity to execute their operations.”
In the meantime, Ms Bodner has appeared in a Toronto courtroom, charged with four customs offences and two counts under the Export and Import of Rough Diamonds Act. But we still don’t know, and may never know, who was on the other end of the shipment, and what those precious baubles were going to finance.
n Natasha Fatah is a writer, reporter, and broadcaster based in Toronto. Follow Natasha on twitter @NatashaFatah