More than a month after the Guyana Geology and Mines Commission (GGMC) seized 4,685 carats of rough diamonds worth US$644,000 ($131,665,793) from a Belgian firm, Paul Eastman, the middleman between the company and GGMC was on Tuesday charged with false declaration.
The gems were seized from Explorer Trade and Commerce Limited on suspicion that they had been smuggled from Africa, Brazil or Venezuela to this country.
According to the charge against Eastman, on November 4 he submitted a return in pursuance of the Mining Act 1989 which he knew or had reason to believe was false contrary to Section 125(b) of the Mining Act. Stabroek News was told that most of the seized diamonds were purchased from dredge owners who are working on other persons’ claims without permission from GGMC.
Eastman appeared before Magistrate Oneidge Waldron-Allicock and was placed on $25,000 bail. He will return to court on December 6. If convicted Eastman could face a fine of $25,000 and imprisonment for one year.
The mining regulatory body had detained the Dubai-bound gems on October 19 following crosschecking of documents, which allegedly showed irregularities in the paperwork.
Meanwhile, yesterday the company’s lawyer Nigel Hughes moved to the High Court seeking an order or rule nisi of mandamus directing GGMC Commissioner, William Woolford to show, among other things, cause why his decision to detain and continue to detain the diamonds should not be set aside as an abuse of power and ultra vires. Hughes is also seeking an order for Woolford to show cause why he should not be directed to deliver the diamonds as his decision to do so was made ultra vires and for malicious reasons.
In an affidavit to support the motion, representative of the company Yuri Zaprudnov said that on October 4 his company lodged an application for permission to export 4,685 carats of rough diamonds and was issued with a receipt for the said application. He said the diamonds were all purchased by his firm from miners who produced their production sheets, which had been duly signed by the designated officers.
Zaprudnov said that the following day Eastman, an employee of the company, went to the offices of the GGMC and was informed by an official that the application was being processed and further that the diamonds were in the possession of Kampta Persaud, also an official at GGMC. For the next two days, Zaprudnov said, he and Eastman returned to GGMC and were informed that Persaud was investigating some of the signatures of the persons who had sold the company diamonds.
On October 15, Zaprudnov said Eastman and a party of officials from GGMC traveled to Kurupung where Persaud spoke with Ray Melville who confirmed that he had sold the diamonds. Persaud also travelled to Barlow Landing and other locations for the purpose of locating the other miners. Zaprudnov said on the third day of travel, Persaud instructed Eastman to return to Kurupung.
According to the affidavit on October 19, GGMC wrote to the company informing it that the minerals and supporting documentation did not satisfactorily comply with the requirements of the mining regulations and the Kimberley Process Certification Scheme (KPCS) and gave several reasons for this, including the commonality of the production sheets and the non-compliance of some of the producers with mining regulations.
not satisfactorily confirmed as being exploited in Guyana as at the site
Zaprudnov said his lawyers requested more information from GGMC on the allegations made by the agency. Among the things they requested were: the quantity of diamonds which value would trigger an assumption that the diamonds were not exploited in Guyana; the details which indicated that the diamonds were not exploited in Guyana as shown among other questions. Zaprudnov said GGMC failed to respond to the letter and on November 7, his lawyers again wrote to the mining agency pointing out that they were still awaiting a response to their letter and demanded that the diamonds be returned to the company.
Zaprudnov argued that he was advised by his lawyers that the continued detention of the diamonds by GGMC without the commencement of any proceedings against the applicant is an abuse of powers vested in the commissioner, unlawful and ultra vires. He added that the seizure of his company’s diamonds on the basis that the quantity is excessive is unscientific, without foundation in law and science, an abuse of power, null, void and ultra vires.
Explorer Trade and Commerce Ltd has been operating in Georgetown for over seven years and Zaprudnov had told this newspaper that this was the first time his firm had had such problems. Guyana is a signatory to the KPCS. The KPCS originated from a meeting of Southern African diamond producing states in Kimberley, Northern Cape in May 2000. In order for a country to be a participant, it must ensure that any diamond originating from the country does not finance a rebel group or other entity seeking to overthrow a UN-recognized government. KPCS also mandates that every diamond export be accompanied by a Kimberley Process certificate proving that no diamond is imported from, or exported to, a non-member of the scheme.
A report from diamond industry watchdog, Partnership Africa Canada (PAC) last year had said that as much as 20 per cent of diamonds mined in Guyana are smuggled to Brazil, mixed with diamonds from Venezuela and laundered back through Guyana, evading the Kimberley Process Certification Scheme (KPCS). The report said that although Guyana has good internal controls through the GGMC, as much as 20 per cent of the US$43M diamond production is smuggled to the Brazilian border town of Boa Vista, where they are mixed with Venezuelan diamonds which are then ‘cleansed’ through Kimberley Certification documentation in Guyana before they are exported. The report had blamed the cross-border diamond smuggling on the weak controls in Brazil and Venezuela. The report further warned that the lax controls make the entire diamond industry and the KPCS vulnerable to infiltration from Conflict Diamonds from some war-torn African nations.
In 2004 diamond production reached an all-time high of 425,000 carats, while diamond declaration in 2002 and the years before was at least 50 per cent less. Prime Minister Sam Hinds, who has responsibility for mining, had said that production has since dropped to around 300,000 carats.
