By Girish Gupta
CARACAS (Reuters) - Venezuela has rejoined an international pact to curtail the smuggling of conflict diamonds, vowing to resume issuing export certificates to guarantee the minerals are not being used to finance war or violent activity.
The minerals-rich South American country stopped issuing export certificates in 2005 and unilaterally removed itself three years later as an active participant in the Kimberley Process.
The international pact was set up in 2003 to curtail the diamond smuggling that was fueling civil wars in Africa, popularized as "blood diamonds."
Members of Kimberley met this week in the United Arab Emirates and unanimously agreed to reincorporate the nation, the Venezuelan government said on Friday, in a potential boost to the OPEC country's struggling economy.
"With this decision ... the production and commercialization of Venezuelan diamonds will be devoted to the high standards of quality, solvency and security in world diamond activity," said a statement from the Mining Ministry.
The news came as crisis-hit Venezuela seeks to stimulate mining investment in its southern, jungle-covered area that is rich in gold and diamonds.
A resumption of legal exports could boost an economy beset with triple-digit inflation and shortages of basic foods that has led to millions of Venezuelans suffering from hunger.
"Venezuela is moving towards economic diversification and the sustained strengthening of its international reserves," a government statement added.
International reserves are down more than 25 percent in the last year, with the country dependent on oil - whose price has tumbled - for 94 percent of its export revenue.
Ahmed Bin Sulayem, Kimberley's 2016 chair, visited Venezuela in February in order to expedite the process of readmitting the country.
According to official figures, before 2005 Venezuela was a small diamond exporter, producing just 3,000 carats per month.
However, a Reuters investigation in 2012 showed that diamonds mined deep in the Amazon (NASDAQ:AMZN) were being smuggled across borders and given falsified papers, flouting the agreement.
Wildcat mines are still common in the jungle-filled area, and it is unclear if Venezuela has a sustainable plan to reduce their presence.
While Venezuela's stones are not "blood diamonds" as such, the pact's founders fear their existence may give other diamond-producing nations, like Zimbabwe, an excuse to turn a blind eye to other violations of the Kimberley pact.
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Diamond smuggling in lawless Amazon mocks international pact https://goo.gl/v2IJqz)
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