Conflict diamonds originate from regions controlled by factions opposed to legitimate or internationally-recognized governments, and are used to fund military action in opposition to those governments.

Rough diamond caches have often been used by rebel forces to finance arms purchases and other illegal activities. Neighbouring countries can then be used as trading or transit grounds for conflict diamonds. Once these diamonds are brought to market, their origin is difficult to trace and once polished, they can no longer be identified.

The astrocities and conflicts in Angola and Sierra Leone, fuelled by conflict diamond smuggling, have led to action by the UN Security Council. Under Chapter VII of the United Nations Charter, targeted sanctions have been applied against Angola and Sierra Leone rebels, including a ban on their conflict diamonds. Diamond sanctions have also been applied against Liberia but are not yet in effect.

The Clean Diamonds Act bans the import of diamonds into the United States unless the exporting country has a system of controls on the export or import of rough diamonds that meets specified requirements, consistent with a UN resolution adopted in December of 2000.