ANTWERP. Belgium. Apr 3: The diamond trade has always had its dark side, with smugglers and gunrunners too often lurking behind the sparkle and glitter, reports AP.

Now revelations that gem sales are feeding some of Africa's nastiest civil wars have forced change at the heart of the global diamond business.

Antwerp's diamond trade stands accused of allowing rebels from Angola and Sierra Leone to sell billions of dollars of gems on the international market to pay for arms.

'Extremely lax controls and regulations governing the Antwerp market facilitate and perhaps even encourage illegal activity." said a stinging report presented to the United Nations last month by Canadian diplomat Robert Fowler.

The report on how Angolan warlord Jonas Savimbi defies UN sanctions to fund ' , gu il-las reads like a pJold War thriller, with a cast i shadowy South African arms dealers. Ukrainian mercenaries, eastern Mediterranean gem traffickers and African leaders bribed with packets of diamonds.

According to the r port, many of the strands in this web lead to Antwerp, where 85 per cent of the world's rough diamonds arc traded.

The diamond district hugging Antwerp's railroad tracks registered a turnover ol almost

dlrs 18 billion in the first nine months of last year. Trading is cosmopolitan. Hasidic Jews in black coats and hats mingle with sharp-suited dealers from Bombay to Beirut. Little jewelry stores on the neighborhood’s fringes are run by newcomers from the former Soviet republic of Georgia.

There are Kosher delis, Lebanese cafes and Indian Bollywood movie posters.

At Antwerp's High Diamond Council, the UN report was met with consternation and claims the city is being made a scapegoat for an illicit trade that's impossible to control.

Mark Van Bockstael heads the Angolan task force set up by the Diamond Council after the UN banned trade in Savimbi’s diamonds in 1998. He Insists Antwerp has stricter controls than rival centers, such as Bombay or Tel Aviv.

Every Latch of diamonds coming Into the city Is doublechecked. Certificates of origin are scrutinised. Close cooperation with the Angolan government seeks to verify all diamonds from there are legitimate.

However. Van Bockstael ac-knowl d^ed diamonds are a smufr i light.

e small, they are high v...( and they are very hard to detect," he said, pointing at pin-covered maps tracing str ixx ted clandestine routes out of r.ngola through Africa, the

Middle East and former Soviet republics.

Although some diamonds can* be recognised as coining from particular mines. Van Bockstael said the high quality gems panned from the rivers of Angola’s remote northeast are indistinguishable from those of neighbouring Congo and are similar to Canadian gems.

"A lot of production is simply not Identifiable." Van Bockstael insisted. "We are trying to develop a technology (but) It's going to take at least another five years before we have a reliable Instrument."

Meanwhile Savimbi can easily circumvent controls by forging certificates or shipping stones through nations where he has friends or officials are easily bribed. Once cut and polished. Van Bockstael said, the diamonds are impossible to track

Diamond marketing colossus De Beers responded to the outrage by banning all sales from Angola. Van Bockstael said that's giving the same treatment to victims and their tormentors. He's trying to get agreement from other diamond centers for a joint pledge to buy Angola's diamonds only from official channels.

"The nourishing diamond Industry can be utilised by the legal Angolan government to rebuild their war-torn (Illes and Infrastructure.'' the statement says. Van Bockstael

pointed to Botswana and Namibia, where legitimate diamond sales underpin local economies.

Although 40 years of unbroken warfare have left Angola's citizens desperately poor, the country's official diamond sales last year reached $600 million, making it the fourth-largest producer behind Botswana. Russia and South Africa.

Nobody knows how many more diamonds are smuggled out of Angola. The human rights group Global Witness estimated Savimbi earned $3.72 billion from diamond sales from 1992 to 1998.

With such riches at stake, campaigners recognise the difficulties in imposing controls.

"The illicit diamond trade Is never going to be stopped." said Alex Vines from Human Rights Watch in London. "But the costs (of smuggling) can be raised ... There needs To be more tightening up."

Van Bockstael said international concern in changing attitudes in an Industry that paid scant regard to ethical questions.

Despite fears of scaring away an industry that provides 7 per cent of the country's exports, the Belgian government is Introducing tighter controls. Antwerp's Diamond Council is petitioning dealers "not to accept the blood money" that comes from trading rebel gems.