The World Diamond Council (WDC) has put its stamp on proposed legislation in the United States that would bar conflict diamonds from entering the country and serve as a model for similar legislation in other diamond-consuming countries. The WDC action, taken at its second full meeting held Jan. 17 and 18 in London, is not binding but does represent the diamond industry’s primary policy initiatives on the issue.
The WDC plans to work with industry-friendly members of Congress to introduce the legislation this session. The bill serves a two-fold purpose: to have the U.S., ”the world’s leading diamond consuming nation, lead by example”; and to replace an earlier bill, sponsored by Rep. Tony Hall (D-Ohio), that would have required retailers to certify the origin of virtually every diamond they sold.
The proposed legislation would implement some of the rough-diamond certification schemes drawn up by the WDC last September as well as a similar proposal-termed the Kimberley Process-advanced by 23 governmental ministers in meetings held in Kimberley, South Africa. It would ”bar the import of diamonds from countries which are under U.N. sanctions unless they are certified as legitimate by internationally recognized governments which are exempt from sanctions.”
The original draft specifically mentioned Angola and Sierra Leone, but the references were removed after some delegates objected to naming them as the chief sources of conflict diamonds.
The bill’s provisions require that ‘rough diamonds, when exported from the country of extraction, must be sealed in secure, transparent containers by government agents.
”Each sealed container must carry an authenticated document citing the country of extraction. The document must be fully visible to inspectors and must contain a unique registration number along with the carat weight of the rough diamonds.
”Each exporting country, including those engaged in transshipping of diamonds, must contain a database containing information on each parcel of rough diamonds.
”No country subscribing to the tracking system may import diamonds if the criteria cited above are not met.”
The bill states that effective control of conflict diamonds ”depends upon international cooperative efforts involving governments, the private sector, civil society, and appropriate international organizations,” similar to that which formed the groundwork for the system in Kimberley.
The bill gives the U.S. President authority to prohibit import of diamonds from countries in which ‘there are reasonable grounds to believe that particular shipments circumvent U.N. resolutions.’ This provision is designed to prevent the ‘laundering’ of conflict diamonds through countries neighboring Angola and Sierra Leone.
The bill sets a deadline of Aug. 1 for the U.S. Treasury Department-which administers the U.S. Customs Service-to compile a list of countries that have formally signed on to the rough-diamond certification system. It also asks the President to negotiate an international agreement to eliminate the trade in conflict diamonds along the lines of the Kimberley process by Aug. 31.
The bill also calls for civil penalties of up to $250,000 for those who knowingly import conflict diamonds and refers to a ‘fraudulent importation’ statute that imposes a maximum criminal penalty of two years in prison.
More on this story will appear in the March issue of JCK.