The illegal diamond smuggling trade, generally associated with war-torn African countries, is booming in remote parts of southeast Venezuela.

The Venezuelan town of Santa Elena, along the border with Guyana, is a hub of the black market diamond trade. In a Time investigation, Girish Gupta writes that the town has become a strategic transfer point for illegally mined diamonds, which are then smuggled into Guyana. From there they are authenticated with forged documents and shipped to major cities around the world.

Officially, Venezuela has not exported diamonds since 2005. However, it is estimated that the country produces some $30 million worth of diamonds every year, most of which are smuggled out of the country into Guyana or Brazil. Because the trade is unregulated this figure cannot be confirmed, but it would place the South American country among the top diamond producers in the world.

While Venezuela has been criticized by international diamond regulators for its lax approach to monitoring the diamond trade within its borders, it has not made much of an effort to rein it in. Although it withdrew temporarily in 2008, the country officially remains a member of the Kimberley Process (KP), a certification method endorsed by the United Nations which requires member states to ensure that the mining and sale of diamonds in their country is monitored and legitimate.

Some believe that Venezuela’s continued membership in KP, when it does not comply with the regulations, is a sign of the certification scheme’s lack of teeth. Gupta spoke with Ian Smillie, a conflict diamond researcher who played an important part in creating the KP in 2003, who said as much. “One way or the other, the KP has actively let Venezuela off the hook,” Smillie said.

InSight Crime Analysis

There are various factors behind Venezuela’s lack of regulation. Some cynics suggest that government officials are receiving a share of illicit diamond profits, and are hostile to transparency because it would mean an end to these kickbacks. More likely, however, it is due to the difficulties of monitoring a trade that occurs in remote areas on a largely informal basis. Mine operators and workers actively avoid registering with the government because it would force them to sell the diamonds at a fixed rate, and they can make much more on the black market.

From an organized crime perspective, the government’s tacit acceptance of illegal diamond mining is dangerous. While the trade does not currently appear to be linked to armed groups, as it is in places like the Democratic Republic of Congo or Cote d’Ivoire, this could change in the future. The Revolutionary Armed Forces of Colombia (FARC), which maintains a presence in Venezuela, has a history of involvement in illegal mining operations in neighboring Colombia. Recently, there has been evidence to suggest that the group has set its sights on Venezuela’s vast reserves of coltan, a metal ore used in electronics and explosives manufacturing. A March report by the International Consortium of Investigative Journalists (ICIJ) suggested that the metal could emerge as the next “conflict mineral,” potentially opening up a new source of revenue for the guerrilla group.

The FARC have a further incentive to expand their involvement in illicit mining into Venezuela, as officials have been cracking down on illegal mining across the border in Colombia. In January the government created a special prosecutor’s office to deal with environmental crimes, and in April outgoing National Police Commander General Oscar Naranjo referred to illegal mining as the country’s biggest security challenge.