H. R. 1584

One Hundred Eighth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday,

the seventh day of January, two thousand and three

An Act

To implement effective measures to stop trade in conflict diamonds, and for other

purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Clean Diamond Trade Act’’.

SEC. 2. FINDINGS.

Congress finds the following:

(1) Funds derived from the sale of rough diamonds are

being used by rebels and state actors to finance military activities, overthrow legitimate governments, subvert international

efforts to promote peace and stability, and commit horrifying

atrocities against unarmed civilians. During the past decade,

more than 6,500,000 people from Sierra Leone, Angola, and

the Democratic Republic of the Congo have been driven from

their homes by wars waged in large part for control of diamond

mining areas. A million of these are refugees eking out a

miserable existence in neighboring countries, and tens of thousands have fled to the United States. Approximately 3,700,000

people have died during these wars.

(2) The countries caught in this fighting are home to nearly

70,000,000 people whose societies have been torn apart not

only by fighting but also by terrible human rights violations.

(3) Human rights and humanitarian advocates, the

diamond trade as represented by the World Diamond Council,

and the United States Government have been working to block

the trade in conflict diamonds. Their efforts have helped to

build a consensus that action is urgently needed to end the

trade in conflict diamonds.

(4) The United Nations Security Council has acted at various times under chapter VII of the Charter of the United

Nations to address threats to international peace and security

posed by conflicts linked to diamonds. Through these actions,

it has prohibited all states from exporting weapons to certain

countries affected by such conflicts. It has further required

all states to prohibit the direct and indirect import of rough

diamonds from Sierra Leone unless the diamonds are controlled

under specified certificate of origin regimes and to prohibit

absolutely the direct and indirect import of rough diamonds

from Liberia.

(5) In response, the United States implemented sanctions

restricting the importation of rough diamonds from Sierra
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Leone to those diamonds accompanied by specified certificates

of origin and fully prohibiting the importation of rough diamonds from Liberia. The United States is now taking further

action against trade in conflict diamonds.

(6) Without effective action to eliminate trade in conflict

diamonds, the trade in legitimate diamonds faces the threat

of a consumer backlash that could damage the economies of

countries not involved in the trade in conflict diamonds and

penalize members of the legitimate trade and the people they

employ. To prevent that, South Africa and more than 30 other

countries are involved in working, through the ‘‘Kimberley

Process’’, toward devising a solution to this problem. As the

consumer of a majority of the world’s supply of diamonds,

the United States has an obligation to help sever the link

between diamonds and conflict and press for implementation

of an effective solution.

(7) Failure to curtail the trade in conflict diamonds or

to differentiate between the trade in conflict diamonds and

the trade in legitimate diamonds could have a severe negative

impact on the legitimate diamond trade in countries such as

Botswana, Namibia, South Africa, and Tanzania.

(8) Initiatives of the United States seek to resolve the

regional conflicts in sub-Saharan Africa which facilitate the

trade in conflict diamonds.

(9) The Interlaken Declaration on the Kimberley Process

Certification Scheme for Rough Diamonds of November 5, 2002,

states that Participants will ensure that measures taken to

implement the Kimberley Process Certification Scheme for

Rough Diamonds will be consistent with international trade

rules.

SEC. 3. DEFINITIONS.

In this Act:

(1) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term

‘‘appropriate congressional committees’’ means the Committee

on Ways and Means and the Committee on International Relations of the House of Representatives, and the Committee on

Finance and the Committee on Foreign Relations of the Senate.

(2) CONTROLLED THROUGH THE KIMBERLEY PROCESS CERTIFICATION SCHEME.—An importation or exportation of rough diamonds is ‘‘controlled through the Kimberley Process Certification Scheme’’ if it is an importation from the territory of

a Participant or exportation to the territory of a Participant

of rough diamonds that is—

(A) carried out in accordance with the Kimberley

Process Certification Scheme, as set forth in regulations

promulgated by the President; or

(B) controlled under a system determined by the President to meet substantially the standards, practices, and

procedures of the Kimberley Process Certification Scheme.

(3) EXPORTING AUTHORITY.—The term ‘‘exporting authority’’

means 1 or more entities designated by a Participant from

whose territory a shipment of rough diamonds is being exported

as having the authority to validate the Kimberley Process Certificate.

(4) IMPORTING AUTHORITY.—The term ‘‘importing authority’’

means 1 or more entities designated by a Participant into
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whose territory a shipment of rough diamonds is imported

as having the authority to enforce the laws and regulations

of the Participant regulating imports, including the verification

of the Kimberley Process Certificate accompanying the shipment.

(5) KIMBERLEY PROCESS CERTIFICATE.—The term ‘‘Kimberley Process Certificate’’ means a forgery resistant document

of a Participant that demonstrates that an importation or exportation of rough diamonds has been controlled through the Kimberley Process Certification Scheme and contains the minimum

elements set forth in Annex I to the Kimberley Process Certification Scheme.

(6) KIMBERLEY PROCESS CERTIFICATION SCHEME.—The term

‘‘Kimberley Process Certification Scheme’’ means those standards, practices, and procedures of the international certification

scheme for rough diamonds presented in the document entitled

‘‘Kimberley Process Certification Scheme’’ referred to in the

Interlaken Declaration on the Kimberley Process Certification

Scheme for Rough Diamonds of November 5, 2002.

(7) PARTICIPANT.—The term ‘‘Participant’’ means a state,

customs territory, or regional economic integration organization

identified by the Secretary of State.

(8) PERSON.—The term ‘‘person’’ means an individual or

entity.

(9) ROUGH DIAMOND.—The term ‘‘rough diamond’’ means

any diamond that is unworked or simply sawn, cleaved, or

bruted and classifiable under subheading 7102.10, 7102.21, or

7102.31 of the Harmonized Tariff Schedule of the United States.

(10) UNITED STATES.—The term ‘‘United States’’, when used

in the geographic sense, means the several States, the District

of Columbia, and any commonwealth, territory, or possession

of the United States.

(11) UNITED STATES PERSON.—The term ‘‘United States person’’ means—

(A) any United States citizen or any alien admitted

for permanent residence into the United States;

(B) any entity organized under the laws of the United

States or any jurisdiction within the United States

(including its foreign branches); and

(C) any person in the United States.

SEC. 4. MEASURES FOR THE IMPORTATION AND EXPORTATION OF

ROUGH DIAMONDS.

(a) PROHIBITION.—The President shall prohibit the importation

into, or exportation from, the United States of any rough diamond,

from whatever source, that has not been controlled through the

Kimberley Process Certification Scheme.

(b) WAIVER.—The President may waive the requirements set

forth in subsection (a) with respect to a particular country for

periods of not more than 1 year each, if, with respect to each

such waiver—

(1) the President determines and reports to the appropriate

congressional committees that such country is taking effective

steps to implement the Kimberley Process Certification Scheme;

or
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(2) the President determines that the waiver is in the

national interests of the United States, and reports such determination to the appropriate congressional committees, together

with the reasons therefor.

SEC. 5. REGULATORY AND OTHER AUTHORITY.

(a) IN GENERAL.—The President is authorized to and shall

as necessary issue such proclamations, regulations, licenses, and

orders, and conduct such investigations, as may be necessary to

carry out this Act.

(b) RECORDKEEPING.—Any United States person seeking to

export from or import into the United States any rough diamonds

shall keep a full record of, in the form of reports or otherwise,

complete information relating to any act or transaction to which

any prohibition imposed under section 4(a) applies. The President

may require such person to furnish such information under oath,

including the production of books of account, records, contracts,

letters, memoranda, or other papers, in the custody or control

of such person.

(c) OVERSIGHT.—The President shall require the appropriate

Government agency to conduct annual reviews of the standards,

practices, and procedures of any entity in the United States that

issues Kimberley Process Certificates for the exportation from the

United States of rough diamonds to determine whether such standards, practices, and procedures are in accordance with the Kimberley Process Certification Scheme. The President shall transmit

to the appropriate congressional committees a report on each annual

review under this subsection.

SEC. 6. IMPORTING AND EXPORTING AUTHORITIES.

(a) IN THE UNITED STATES.—For purposes of this Act—

(1) the importing authority shall be the United States

Bureau of Customs and Border Protection or, in the case of

a territory or possession of the United States with its own

customs administration, analogous officials; and

(2) the exporting authority shall be the Bureau of the

Census.

(b) OF OTHER COUNTRIES.—The President shall publish in the

Federal Register a list of all Participants, and all exporting authorities and importing authorities of Participants. The President shall

update the list as necessary.

SEC. 7. STATEMENT OF POLICY.

The Congress supports the policy that the President shall take

appropriate steps to promote and facilitate the adoption by the

international community of the Kimberley Process Certification

Scheme implemented under this Act.

SEC. 8. ENFORCEMENT.

(a) IN GENERAL.—In addition to the enforcement provisions

set forth in subsection (b)—

(1) a civil penalty of not to exceed $10,000 may be imposed

on any person who violates, or attempts to violate, any license,

order, or regulation issued under this Act; and

(2) whoever willfully violates, or willfully attempts to violate, any license, order, or regulation issued under this Act

shall, upon conviction, be fined not more than $50,000, or,

if a natural person, may be imprisoned for not more than
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10 years, or both; and any officer, director, or agent of any

corporation who willfully participates in such violation may

be punished by a like fine, imprisonment, or both.

(b) IMPORT VIOLATIONS.—Those customs laws of the United

States, both civil and criminal, including those laws relating to

seizure and forfeiture, that apply to articles imported in violation

of such laws shall apply with respect to rough diamonds imported

in violation of this Act.

(c) AUTHORITY TO ENFORCE.—The United States Bureau of

Customs and Border Protection and the United States Bureau

of Immigration and Customs Enforcement are authorized, as appropriate, to enforce the provisions of subsection (a) and to enforce

the laws and regulations governing exports of rough diamonds,

including with respect to the validation of the Kimberley Process

Certificate by the exporting authority.

SEC. 9. TECHNICAL ASSISTANCE.

The President may direct the appropriate agencies of the United

States Government to make available technical assistance to countries seeking to implement the Kimberley Process Certification

Scheme.

SEC. 10. SENSE OF CONGRESS.

(a) ONGOING PROCESS.—It is the sense of the Congress that

the Kimberley Process Certification Scheme, officially launched on

January 1, 2003, is an ongoing process. The President should work

with Participants to strengthen the Kimberley Process Certification

Scheme through the adoption of measures for the sharing of statistics on the production of and trade in rough diamonds, and for

monitoring the effectiveness of the Kimberley Process Certification

Scheme in stemming trade in diamonds the importation or exportation of which is not controlled through the Kimberley Process

Certification Scheme.

(b) STATISTICS AND REPORTING.—It is the sense of the Congress

that under Annex III to the Kimberley Process Certification Scheme,

Participants recognized that reliable and comparable data on the

international trade in rough diamonds are an essential tool for

the effective implementation of the Kimberley Process Certification

Scheme. Therefore, the executive branch should continue to—

(1) keep and publish statistics on imports and exports

of rough diamonds under subheadings 7102.10.00, 7102.21, and

7102.31.00 of the Harmonized Tariff Schedule of the United

States;

(2) make these statistics available for analysis by interested

parties and by Participants; and

(3) take a leadership role in negotiating a standardized

methodology among Participants for reporting statistics on

imports and exports of rough diamonds.

SEC. 11. KIMBERLEY PROCESS IMPLEMENTATION COORDINATING

COMMITTEE.

The President shall establish a Kimberley Process Implementation Coordinating Committee to coordinate the implementation of

this Act. The Committee shall be composed of the following individuals or their designees:

(1) The Secretary of the Treasury and the Secretary of

State, who shall be co-chairpersons.

(2) The Secretary of Commerce.
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(3) The United States Trade Representative.

(4) The Secretary of Homeland Security.

(5) A representative of any other agency the President

deems appropriate.

SEC. 12. REPORTS.

(a) ANNUAL REPORTS.—Not later than 1 year after the date

of the enactment of this Act and every 12 months thereafter for

such period as this Act is in effect, the President shall transmit

to the Congress a report—

(1) describing actions taken by countries that have exported

rough diamonds to the United States during the preceding

12-month period to control the exportation of the diamonds

through the Kimberley Process Certification Scheme;

(2) describing whether there is statistical information or

other evidence that would indicate efforts to circumvent the

Kimberley Process Certification Scheme, including cutting

rough diamonds for the purpose of circumventing the Kimberley

Process Certification Scheme;

(3) identifying each country that, during the preceding

12-month period, exported rough diamonds to the United States

and was exporting rough diamonds not controlled through the

Kimberley Process Certification Scheme, if the failure to do

so has significantly increased the likelihood that those diamonds not so controlled are being imported into the United

States; and

(4) identifying any problems or obstacles encountered in

the implementation of this Act or the Kimberly Process Certification Scheme.

(b) SEMIANNUAL REPORTS.—For each country identified in subsection (a)(3), the President, during such period as this Act is

in effect, shall, every 6 months after the initial report in which

the country was identified, transmit to the Congress a report that

explains what actions have been taken by the United States or

such country since the previous report to ensure that diamonds

the exportation of which was not controlled through the Kimberley

Process Certification Scheme are not being imported from that

country into the United States. The requirement to issue a semiannual report with respect to a country under this subsection

shall remain in effect until such time as the country is controlling

the importation and exportation of rough diamonds through the

Kimberley Process Certification Scheme.

SEC. 13. GAO REPORT.

Not later than 24 months after the effective date of this Act,

the Comptroller General of the United States shall transmit a

report to the Congress on the effectiveness of the provisions of

this Act in preventing the importation or exportation of rough

diamonds that is prohibited under section 4. The Comptroller General shall include in the report any recommendations on any modifications to this Act that may be necessary.

SEC. 14. DELEGATION OF AUTHORITIES.

The President may delegate the duties and authorities under

this Act to such officers, officials, departments, or agencies of the

United States Government as the President deems appropriate.
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SEC. 15. EFFECTIVE DATE.

This Act shall take effect on the date on which the President

certifies to the Congress that—

(1) an applicable waiver that has been granted by the

World Trade Organization is in effect; or

(2) an applicable decision in a resolution adopted by the

United Nations Security Council pursuant to Chapter VII of

the Charter of the United Nations is in effect.

This Act shall thereafter remain in effect during those periods

in which, as certified by the President to the Congress, an applicable

waiver or decision referred to in paragraph (1) or (2) is in effect.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.