108TH CONGRESS

1ST SESSION H. R. 1584

AN ACT

To implement effective measures to stop trade in

conflict diamonds, and for other purposes.

108TH CONGRESS

1ST SESSION H. R. 1584

AN ACT

To implement effective measures to stop trade in conflict

diamonds, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Clean Diamond Trade

3 Act’’.

4 SEC. 2. FINDINGS.

5 Congress finds the following:

6 (1) Funds derived from the sale of rough dia7 monds are being used by rebels and state actors to

8 finance military activities, overthrow legitimate gov9 ernments, subvert international efforts to promote

10 peace and stability, and commit horrifying atrocities

11 against unarmed civilians. During the past decade,

12 more than 6,500,000 people from Sierra Leone, An13 gola, and the Democratic Republic of the Congo

14 have been driven from their homes by wars waged

15 in large part for control of diamond mining areas.

16 A million of these are refugees eking out a miserable

17 existence in neighboring countries, and tens of thou18 sands have fled to the United States. Approximately

19 3,700,000 people have died during these wars.

20 (2) The countries caught in this fighting are

21 home to nearly 70,000,000 people whose societies

22 have been torn apart not only by fighting but also

23 by terrible human rights violations.

24 (3) Human rights and humanitarian advocates,

25 the diamond trade as represented by the World Dia26 mond Council, and the United States Government
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1 have been working to block the trade in conflict dia2 monds. Their efforts have helped to build a con3 sensus that action is urgently needed to end the

4 trade in conflict diamonds.

5 (4) The United Nations Security Council has

6 acted at various times under chapter VII of the

7 Charter of the United Nations to address threats to

8 international peace and security posed by conflicts

9 linked to diamonds. Through these actions, it has

10 prohibited all states from exporting weapons to cer11 tain countries affected by such conflicts. It has fur12 ther required all states to prohibit the direct and in13 direct import of rough diamonds from Sierra Leone

14 unless the diamonds are controlled under specified

15 certificate of origin regimes and to prohibit abso16 lutely the direct and indirect import of rough dia17 monds from Liberia.

18 (5) In response, the United States implemented

19 sanctions restricting the importation of rough dia20 monds from Sierra Leone to those diamonds accom21 panied by specified certificates of origin and fully

22 prohibiting the importation of rough diamonds from

23 Liberia. The United States is now taking further ac24 tion against trade in conflict diamonds.
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1 (6) Without effective action to eliminate trade

2 in conflict diamonds, the trade in legitimate dia3 monds faces the threat of a consumer backlash that

4 could damage the economies of countries not in5 volved in the trade in conflict diamonds and penalize

6 members of the legitimate trade and the people they

7 employ. To prevent that, South Africa and more

8 than 30 other countries are involved in working,

9 through the ‘‘Kimberley Process’’, toward devising a

10 solution to this problem. As the consumer of a ma11 jority of the world’s supply of diamonds, the United

12 States has an obligation to help sever the link be13 tween diamonds and conflict and press for imple14 mentation of an effective solution.

15 (7) Failure to curtail the trade in conflict dia16 monds or to differentiate between the trade in con17 flict diamonds and the trade in legitimate diamonds

18 could have a severe negative impact on the legiti19 mate diamond trade in countries such as Botswana,

20 Namibia, South Africa, and Tanzania.

21 (8) Initiatives of the United States seek to re22 solve the regional conflicts in sub-Saharan Africa

23 which facilitate the trade in conflict diamonds.

24 (9) The Interlaken Declaration on the Kim25 berley Process Certification Scheme for Rough Dia-
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1 monds of November 5, 2002, states that Partici2 pants will ensure that measures taken to implement

3 the Kimberley Process Certification Scheme for

4 Rough Diamonds will be consistent with inter5 national trade rules.

6 SEC. 3. DEFINITIONS.

7 In this Act:

8 (1) APPROPRIATE CONGRESSIONAL COMMIT9 TEES.—The term ‘‘appropriate congressional com10 mittees’’ means the Committee on Ways and Means

11 and the Committee on International Relations of the

12 House of Representatives, and the Committee on Fi13 nance and the Committee on Foreign Relations of

14 the Senate.

15 (2) CONTROLLED THROUGH THE KIMBERLEY

16 PROCESS CERTIFICATION SCHEME.—An importation

17 or exportation of rough diamonds is ‘‘controlled

18 through the Kimberley Process Certification

19 Scheme’’ if it is an importation from the territory of

20 a Participant or exportation to the territory of a

21 Participant of rough diamonds that is—

22 (A) carried out in accordance with the

23 Kimberley Process Certification Scheme, as set

24 forth in regulations promulgated by the Presi25 dent; or
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1 (B) controlled under a system determined

2 by the President to meet substantially the

3 standards, practices, and procedures of the

4 Kimberley Process Certification Scheme.

5 (3) EXPORTING AUTHORITY.—The term ‘‘ex6 porting authority’’ means 1 or more entities des7 ignated by a Participant from whose territory a

8 shipment of rough diamonds is being exported as

9 having the authority to validate the Kimberley Proc10 ess Certificate.

11 (4) IMPORTING AUTHORITY.—The term ‘‘im12 porting authority’’ means 1 or more entities des13 ignated by a Participant into whose territory a ship14 ment of rough diamonds is imported as having the

15 authority to enforce the laws and regulations of the

16 Participant regulating imports, including the

17 verification of the Kimberley Process Certificate ac18 companying the shipment.

19 (5) KIMBERLEY PROCESS CERTIFICATE.—The

20 term ‘‘Kimberley Process Certificate’’ means a for21 gery resistant document of a Participant that dem22 onstrates that an importation or exportation of

23 rough diamonds has been controlled through the

24 Kimberley Process Certification Scheme and con-
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1 tains the minimum elements set forth in Annex I to

2 the Kimberley Process Certification Scheme.

3 (6) KIMBERLEY PROCESS CERTIFICATION

4 SCHEME.—The term ‘‘Kimberley Process Certifi5 cation Scheme’ means those standards, practices,

6 and procedures of the international certification

7 scheme for rough diamonds presented in the docu8 ment entitled ‘‘Kimberley Process Certification

9 Scheme’’ referred to in the Interlaken Declaration

10 on the Kimberley Process Certification Scheme for

11 Rough Diamonds of November 5, 2002.

12 (7) PARTICIPANT.—The term ‘‘Participant’’

13 means a state, customs territory, or regional eco14 nomic integration organization identified by the Sec15 retary of State.

16 (8) PERSON.—The term ‘‘person’’ means an in17 dividual or entity.

18 (9) ROUGH DIAMOND.—The term ‘‘rough dia19 mond’’ means any diamond that is unworked or sim20 ply sawn, cleaved, or bruted and classifiable under

21 subheading 7102.10, 7102.21, or 7102.31 of the

22 Harmonized Tariff Schedule of the United States.

23 (10) UNITED STATES.—The term ‘‘United

24 States’’, when used in the geographic sense, means

25 the several States, the District of Columbia, and any
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1 commonwealth, territory, or possession of the United

2 States.

3 (11) UNITED STATES PERSON.—The term

4 ‘‘United States person’’ means—

5 (A) any United States citizen or any alien

6 admitted for permanent residence into the

7 United States;

8 (B) any entity organized under the laws of

9 the United States or any jurisdiction within the

10 United States (including its foreign branches);

11 and

12 (C) any person in the United States.

13 SEC. 4. MEASURES FOR THE IMPORTATION AND EXPOR14 TATION OF ROUGH DIAMONDS.

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

16 importation into, or exportation from, the United States

17 of any rough diamond, from whatever source, that has not

18 been controlled through the Kimberley Process Certifi19 cation Scheme.

20 (b) WAIVER.—The President may waive the require21 ments set forth in subsection (a) with respect to a par22 ticular country for periods of not more than 1 year each,

23 if, with respect to each such waiver—

24 (1) the President determines and reports to the

25 appropriate congressional committees that such
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1 country is taking effective steps to implement the

2 Kimberley Process Certification Scheme; or

3 (2) the President determines that the waiver is

4 in the national interests of the United States, and

5 reports such determination to the appropriate con6 gressional committees, together with the reasons

7 therefor.

8 SEC. 5. REGULATORY AND OTHER AUTHORITY.

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

10 and shall as necessary issue such proclamations, regula11 tions, licenses, and orders, and conduct such investiga12 tions, as may be necessary to carry out this Act.

13 (b) RECORDKEEPING.—Any United States person

14 seeking to export from or import into the United States

15 any rough diamonds shall keep a full record of, in the form

16 of reports or otherwise, complete information relating to

17 any act or transaction to which any prohibition imposed

18 under section 4(a) applies. The President may require

19 such person to furnish such information under oath, in20 cluding the production of books of account, records, con21 tracts, letters, memoranda, or other papers, in the custody

22 or control of such person.

23 (c) OVERSIGHT.—The President shall require the ap24 propriate Government agency to conduct annual reviews

25 of the standards, practices, and procedures of any entity
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1 in the United States that issues Kimberley Process Certifi2 cates for the exportation from the United States of rough

3 diamonds to determine whether such standards, practices,

4 and procedures are in accordance with the Kimberley

5 Process Certification Scheme. The President shall trans6 mit to the appropriate congressional committees a report

7 on each annual review under this subsection.

8 SEC. 6. IMPORTING AND EXPORTING AUTHORITIES.

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

10 Act—

11 (1) the importing authority shall be the United

12 States Bureau of Customs and Border Protection or,

13 in the case of a territory or possession of the United

14 States with its own customs administration, analo15 gous officials; and

16 (2) the exporting authority shall be the Bureau

17 of the Census.

18 (b) OF OTHER COUNTRIES.—The President shall

19 publish in the Federal Register a list of all Participants,

20 and all exporting authorities and importing authorities of

21 Participants. The Secretary shall update the list as nec22 essary.

23 SEC. 7. STATEMENT OF POLICY.

24 The Congress supports the policy that the President

25 shall take appropriate steps to promote and facilitate the
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1 adoption by the international community of the Kimberley

2 Process Certification Scheme implemented under this Act.

3 SEC. 8. ENFORCEMENT.

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

5 provisions set forth in subsection (b)—

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

7 be imposed on any person who violates, or attempts

8 to violate, any license, order, or regulation issued

9 under this Act; and

10 (2) whoever willfully violates, or willfully at11 tempts to violate, any license, order, or regulation

12 issued under this Act shall, upon conviction, be fined

13 not more than $50,000, or, if a natural person, may

14 be imprisoned for not more than 10 years, or both;

15 and any officer, director, or agent of any corporation

16 who willfully participates in such violation may be

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

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

19 United States, both civil and criminal, including those

20 laws relating to seizure and forfeiture, that apply to arti21 cles imported in violation of such laws shall apply with

22 respect to rough diamonds imported in violation of this

23 Act.

24 (c) AUTHORITY TO ENFORCE.—The United States

25 Bureau of Customs and Border Protection and the United
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1 States Bureau of Immigration and Customs Enforcement

2 are authorized, as appropriate, to enforce the provisions

3 of subsection (a) and to enforce the laws and regulations

4 governing exports of rough diamonds, including with re5 spect to the validation of the Kimberley Process Certifi6 cate by the exporting authority.

7 SEC. 9. TECHNICAL ASSISTANCE.

8 The President may direct the appropriate agencies of

9 the United States Government to make available technical

10 assistance to countries seeking to implement the Kim11 berley Process Certification Scheme.

12 SEC. 10. SENSE OF CONGRESS.

13 (a) ONGOING PROCESS.—It is the sense of the Con14 gress that the Kimberley Process Certification Scheme, of15 ficially launched on January 1, 2003, is an ongoing proc16 ess. The President should work with Participants to

17 strengthen the Kimberley Process Certification Scheme

18 through the adoption of measures for the sharing of statis19 tics on the production of and trade in rough diamonds,

20 and for monitoring the effectiveness of the Kimberley

21 Process Certification Scheme in stemming trade in dia22 monds the importation or exportation of which is not con23 trolled through the Kimberley Process Certification

24 Scheme.
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1 (b) STATISTICS AND REPORTING.—It is the sense of

2 the Congress that under Annex III to the Kimberley Proc3 ess Certification Scheme, Participants recognized that re4 liable and comparable data on the international trade in

5 rough diamonds are an essential tool for the effective im6 plementation of the Kimberley Process Certification

7 Scheme. Therefore, the executive branch should continue

8 to—

9 (1) keep and publish statistics on imports and

10 exports of rough diamonds under subheadings

11 7102.10.00, 7102.21, and 7102.31.00 of the Har12 monized Tariff Schedule of the United States;

13 (2) make these statistics available for analysis

14 by interested parties and by Participants; and

15 (3) take a leadership role in negotiating a

16 standardized methodology among Participants for

17 reporting statistics on imports and exports of rough

18 diamonds.

19 SEC. 11. KIMBERLEY PROCESS IMPLEMENTATION COORDI20 NATING COMMITTEE.

21 The President shall establish a Kimberley Process

22 Implementation Coordinating Committee to coordinate the

23 implementation of this Act. The Committee should be

24 composed of the following individuals or their designees:
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1 (1) The Secretary of the Treasury and the Sec2 retary of State, to serve as co-chairpersons.

3 (2) The Secretary of Commerce.

4 (3) The United States Trade Representative.

5 (4) The Secretary of Homeland Security.

6 (5) A representative of any other agency the

7 President deems appropriate.

8 SEC. 12. REPORTS.

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

10 the date of the enactment of this Act and every 12 months

11 thereafter for such period as this Act is in effect, the

12 President shall transmit to the Congress a report—

13 (1) describing actions taken by countries that

14 have exported rough diamonds to the United States

15 during the preceding 12-month period to control the

16 exportation of the diamonds through the Kimberley

17 Process Certification Scheme;

18 (2) describing whether there is statistical infor19 mation or other evidence that would indicate efforts

20 to circumvent the Kimberley Process Certification

21 Scheme, including cutting rough diamonds for the

22 purpose of circumventing the Kimberley Process

23 Certification Scheme;

24 (3) identifying each country that, during the

25 preceding 12-month period, exported rough dia-
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1 monds to the United States and was exporting rough

2 diamonds not controlled through the Kimberley

3 Process Certification Scheme, if the failure to do so

4 has significantly increased the likelihood that those

5 diamonds not so controlled are being imported into

6 the United States; and

7 (4) identifying any problems or obstacles en8 countered in the implementation of this Act or the

9 Kimberly Process Certification Scheme.

10 (b) SEMIANNUAL REPORTS.—For each country iden11 tified in subsection (a)(3), the President, during such pe12 riod as this Act is in effect, shall, every 6 months after

13 the initial report in which the country was identified,

14 transmit to the Congress a report that explains what ac15 tions have been taken by the United States or such coun16 try since the previous report to ensure that diamonds the

17 exportation of which was not controlled through the Kim18 berley Process Certification Scheme are not being im19 ported from that country into the United States. The re20 quirement to issue a semiannual report with respect to a

21 country under this subsection shall remain in effect until

22 such time as the country is controlling the importation and

23 exportation of rough diamonds through the Kimberley

24 Process Certification Scheme.
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1 SEC. 13. GAO REPORT.

2 Not later than 24 months after the effective date of

3 this Act, the Comptroller General of the United States

4 shall transmit a report to the Congress on the effective5 ness of the provisions of this Act in preventing the impor6 tation or exportation of rough diamonds that is prohibited

7 under section 4. The Comptroller General shall include in

8 the report any recommendations on any modifications to

9 this Act that may be necessary.

10 SEC. 14. DELEGATION OF AUTHORITIES.

11 The President may delegate the duties and authori12 ties under this Act to such officers, officials, departments,

13 or agencies of the United States Government as the Presi14 dent deems appropriate.

15 SEC. 15. EFFECTIVE DATE.

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

17 President certifies to the Congress that—

18 (1) an applicable waiver that has been granted

19 by the World Trade Organization is in effect; or

20 (2) an applicable decision in a resolution adopt21 ed by the United Nations Security Council pursuant

22 to Chapter VII of the Charter of the United Nations

23 is in effect.

24 This Act shall thereafter remain in effect during those pe25 riods in which, as certified by the President to the Con-
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1 gress, an applicable waiver or decision referred to in para2 graph (1) or (2) is in effect.

Passed the House of Representatives April 8, 2003.

Attest:

Clerk.