Canadian jewelers halt the sale of tanzanite

Many Canadian jewelers have stopped selling tanzanite after evidence surfaced that al-Qaeda may have been using sales of the violet gem found only in Tanzania to help finance its operations, the National Post of Canada, reported.

In a highly unusual move, Tiffany & Co.’s sole Toronto store suspended sales in mid-December. Peoples Jewelers followed suit on Jan. 1, after the diary of a former personal secretary to Osama bin Laden revealed al-Qaeda had dealings in tanzanite, the publication reported.

The stones were available at Birks until Jan. 25, but Canada’s largest jewelry retailer told the newspaper that it did not know of the alleged connection between terrorism and tanzanite, the publication reported.

After being contacted by the National Post, Birks pulled about 60 items containing tanzanite, including $2,000 earrings and $9,000 rings, from its 37 Canadian outlets.

“Birks’ senior management just learned about the situation and in reaction, they are taking all pieces out of the stores until the matter is investigated further,” spokeswoman Michelle Cliffe told the publication.

The diary of Wadih el-Hage, a bin Laden operative convicted last year of conspiracy in the 1998 bombings of U.S.embassies in Africa, reveals his efforts to enter the lucrative tanzanite trade.

According to the Wall Street Journal, el-Hage, who is serving a life sentence in a Colorado federal institution, tried to sell tanzanite pieces to dealers in London and Antwerp, Belgium, in the mid-1990s, when he was based in Nairobi.

He had limited success, but found a buyer in Holts, “the only one at Hatton Garden [London’s jewelry row] who deals with semi-precious stones, tanz,” according to his journal, which was seized by the Federal Bureau of Investigation in 1997.

In December, 1995, el-Hage went to Los Angeles and San Francisco, where he managed to sell some tanzanite.

The Central Intelligence Agency and the U.S. State Department are investigating links between funding terrorists and tanzanite.

U.S. retailers Zale Corp. and QVC Inc. have also halted tanzanite sales, a boycott that crimped the US$400-million a year trade.

Birks said it did not know about the controversy because it is a Canadian company and most press reports appeared in the U.S., the publication reported.