I

107TH CONGRESS

1ST SESSION H. R. 918

To prohibit the importation of diamonds unless the countries exporting the

diamonds into the United States have in place a system of controls

on rough diamonds, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 7, 2001

Mr. HALL of Ohio (for himself, Mr. WOLF, Ms. MCKINNEY, Mr. RANGEL, Ms.

DELAURO, Mr. EHLERS, Mr. LANTOS, Mr. ABERCROMBIE, Mr.

CAPUANO, Mr. HALL of Texas, Ms. BALDWIN, Mr. BENTSEN, Mr.

BROWN of Ohio, Mr. CROWLEY, Mr. EVANS, Mr. FRANK, Mr. HILLIARD,

Mr. LAHOOD, Mr. GEORGE MILLER of California, Mr. MOAKLEY, Mrs.

MORELLA, Mr. NADLER, Ms. RIVERS, Mr. SANDERS, Mr. SERRANO, Mr.

CLAY, Mr. MEEKS of New York, Mr. MCGOVERN, Mr. FILNER, Mr.

UDALL of Colorado, Mr. STARK, Ms. MILLENDER-MCDONALD, Ms.

PELOSI, Mr. SNYDER, Mr. TANCREDO, Mr. COYNE, Mr. CONYERS, Mr.

PETERSON of Pennsylvania, Mr. LARSEN of Washington, Mr. ACKERMAN,

Mr. SABO, Mr. HINCHEY, Ms. CARSON of Indiana, Mr. WAXMAN, Mrs.

ROUKEMA, Mr. ENGEL, Mr. OLVER, Mr. MARKEY, Mr. CUMMINGS, Mr.

FALEOMAVAEGA, Mr. MCDERMOTT, Mr. ANDREWS, Mr. JEFFERSON,

Mrs. CHRISTENSEN, Mrs. CLAYTON, Mr. BAIRD, Ms. VELA ́ZQUEZ, Mr.

DOYLE, Mr. FATTAH, Mr. JACKSON of Illinois, Mr. WYNN, Mr. TOWNS,

Mr. FORD, Mr. HASTINGS of Florida, Mrs. JONES of Ohio, Mr. RUSH,

Ms. BROWN of Florida, Mr. OWENS, Mrs. MEEK of Florida, Ms. JACKSON-LEE of Texas, Ms. LEE, Mr. BISHOP, Ms. NORTON, Mr. SMITH of

New Jersey, Mr. DELAHUNT, Ms. WATERS, Mr. LUTHER, Mr. PAYNE,

Mr. CLYBURN, and Mr. MEEHAN) introduced the following bill; which

was referred to the Committee on Ways and Means, and in addition to

the Committees on International Relations, and Financial Services, for a

period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned
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A BILL

To prohibit the importation of diamonds unless the countries

exporting the diamonds into the United States have in

place a system of controls on rough 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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Clean Diamonds Act’’.

5 SEC. 2. FINDINGS.

6 Congress finds the following:

7 (1) Diamonds are being used by rebels and dic8 tators to finance military activities, overthrow legiti9 mate governments, subvert international efforts to

10 promote peace and stability, and commit horrifying

11 atrocities against unarmed civilians. During the past

12 decade, more than 6,500,000 people from Sierra

13 Leone, Angola, and the Democratic Republic of the

14 Congo have been driven from their homes by wars

15 waged in large part for control of diamond mining

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

17 miserable existence in neighboring countries, and

18 tens of thousands have fled to the United States.

19 Approximately 2,400,000 people have died in the

20 fighting.
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1 (2) The countries caught in this fighting are

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

3 have been torn apart not only by fighting, but by the

4 thousands of children forced to become soldiers, by

5 the tens of thousands of women and girls raped and

6 forced into sexual slavery, and by a campaign of

7 forced amputations that has maimed and killed even

8 more men, women, and children.

9 (3) In the past decade, the United States Gov10 ernment has sent more than $2,000,000,000 in hu11 manitarian aid to the people caught up in the wars.

12 Over the same period, approximately

13 $10,000,000,000 in diamonds were smuggled out of

14 these same countries. Much of this money was used

15 to continue and spread the wars.

16 (4) The United States Government and human

17 rights advocates recently began working to block the

18 trade in conflict diamonds. Their efforts have helped

19 to build a consensus that action is urgently needed,

20 and they have persuaded the legitimate diamond in21 dustry that its own interests demand a comprehen22 sive effort to end the diamond smuggling that fuels

23 these conflicts.

24 (5) The United Nations Security Council, act25 ing under chapter VII of the Charter of the United
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1 Nations, has prohibited all states from importing

2 diamonds from, and exporting weapons to, certain

3 countries affected by diamond-related conflicts. Un4 fortunately, diamond smugglers continue funding

5 rebel movements, and the sanctions have not been

6 sufficiently effective to achieve their goals. In turn,

7 this illicit trade has facilitated trade in narcotics,

8 arms proliferation, regional destabilization, money

9 laundering, and other criminal enterprises. This has

10 severely hampered efforts by the United States to

11 safeguard its citizens from drugs, terrorism, and

12 other threats to the security of the American people.

13 (6) Without effective action to prohibit trade in

14 conflict diamonds, the trade in legitimate diamonds

15 faces the threat of a consumer backlash that could

16 damage the economies of countries not involved in

17 the trade in conflict diamonds and penalize members

18 of the legitimate trade and the people they employ.

19 To prevent that, South Africa and more than 20

20 other countries are involved in working, through the

21 ‘‘Kimberley Process’’, toward devising a solution to

22 this problem. As the consumer of two-thirds of the

23 world’s supply of diamonds, the United States has

24 an obligation to help sever the link between dia-
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1 monds and conflict and press for implementation of

2 an effective solution.

3 SEC. 3. RESTRICTIONS ON IMPORTATION OF DIAMONDS.

4 (a) RESTRICTIONS.—

5 (1) REQUIREMENTS FOR IMPORTED DIA6 MONDS.—Diamonds may not be imported into the

7 United States unless the country exporting the dia8 monds to the United States is implementing a sys9 tem of controls on the export and import of rough

10 diamonds that meets the requirements of paragraph

11 (2), consistent with United Nations General Assem12 bly Resolution 55/56 adopted on December 1, 2000,

13 or a future international agreement which imple14 ments such controls and to which the United States

15 is a signatory.

16 (2) REQUIREMENTS FOR SYSTEM OF CON17 TROLS.—The system of controls referred to in para18 graph (1) shall include the following:

19 (A) Rough diamonds, when exported from

20 the country in which they were extracted, shall

21 be sealed in a secure, transparent container or

22 bag by appropriate government officials of that

23 country.
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1 (B) The sealed container or bag described

2 in subparagraph (A) shall include a fully visible

3 document that—

4 (i) certifies the country from which

5 the rough diamonds were extracted;

6 (ii) records a unique export registra7 tion number for, and the total carat weight

8 and number of, the rough diamonds in the

9 container or bag; and

10 (iii) is issued by the government of

11 that country.

12 (C) The country from whose territory the

13 rough diamonds are exported shall establish a

14 database containing at least the information on

15 exports of rough diamonds described in sub16 paragraph (B).

17 (D) Any country into whose territory the

18 rough diamonds are first imported prior to

19 polishing or other processing—

20 (i) shall permit importation of the

21 rough diamonds only in a container or bag

22 described in subparagraphs (A) and (B);

23 and

24 (ii) can verify, on the basis of docu25 mentation provided to it by electronic or
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1 other reliable means, the legitimacy of the

2 export document included in the sealed

3 container or bag in which the rough dia4 monds were shipped, using the database

5 maintained in the country of export.

6 (E) Appropriate government authorities

7 shall conduct physical inspections of the sealed

8 containers and bags of rough diamonds to en9 sure compliance with the requirements of this

10 paragraph.

11 (b) MONITORING.—The President shall ensure that

12 the system of controls described in subsection (a) is mon13 itored by appropriate agencies of the United States.

14 (c) PRESIDENTIAL ADVISORY COMMISSION.—

15 (1) PURPOSES.—The President shall appoint an

16 advisory commission, the purposes of which shall

17 be—

18 (A) to make recommendations to the Presi19 dent on the effectiveness of the monitoring

20 under subsection (b), and on ways to improve

21 such monitoring; and

22 (B) to develop a labeling system, that

23 could be used by diamond and jewelry vendors,

24 that would certify to consumers that a diamond

25 imported into the United States has been sub-
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1 ject to a system of controls on rough diamonds

2 described in subsection (a).

3 (2) MEMBERSHIP.—The advisory commission

4 shall be composed of 11 members, 3 of whom shall

5 be representatives of private voluntary organizations,

6 and 2 of whom shall be representatives of the dia7 mond industry. The remaining members may be ap8 pointed from appropriate agencies of the United

9 States and other interested parties.

10 SEC. 4. PENALTIES.

11 (a) IN GENERAL.—Violations of section 3 are subject

12 to civil and criminal penalties under the laws of the United

13 States to the same extent as any other violation of the

14 customs laws of the United States.

15 (b) BLOCKING ASSETS AND PROHIBITING TRANS16 ACTIONS.—The President may exercise the authorities he

17 has under the International Economic Powers Act (50

18 U.S.C. 1701 et seq.), without regard to section 202 of that

19 Act, to block, and prohibit transactions in, property owned

20 or controlled by any person who exports diamonds to the

21 United States from a country that fails to meet the re22 quirements of section 3(a) of this Act. The penalties pro23 vided in section 206 of the International Economic Powers

24 Act shall apply to violations of licenses, orders, or regula25 tions issued under this subsection to the same extent as
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1 such penalties apply with respect to violations under that

2 Act.

3 (c) PROCEEDS FROM FINES AND FORFEITED

4 GOODS.—The proceeds derived from fines imposed for vio5 lations of section 3(a), and from the seizure and forfeiture

6 of goods imported in violation of section 3(a), shall, in ad7 dition to amounts otherwise available for such purposes,

8 be available only for—

9 (1) the War Victims Fund administered by the

10 Agency for International Development or any suc11 cessor program to assist victims of foreign wars; and

12 (2) grants under section 131 of the Foreign As13 sistance Act of 1961 (22 U.S.C. 2152a).

14 SEC. 5. RESTRICTIONS ON OPIC AND EXPORT-IMPORT

15 BANK.

16 (a) OPIC.—The Overseas Private Investment Cor17 poration may not insure, reinsure, guarantee, or finance

18 any investment in connection with a project involving the

19 mining, polishing or other processing, or sale of diamonds

20 in a country that fails to meet the requirements of section

21 3(a).

22 (b) EXPORT-IMPORT BANK.—The Export-Import

23 Bank of the United States may not guarantee, insure, ex24 tend credit, or participate in an extension of credit in con25 nection with the export of any goods to a country for use
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1 in an enterprise involving the mining, polishing or other

2 processing, or sale of diamonds in a country that fails to

3 meet the requirements of section 3(a).

4 SEC. 6. ANNUAL REPORT.

5 The President shall transmit to the Congress, not

6 later than 6 months after the date of the enactment of

7 this Act, and not later than September 30 of each subse8 quent calendar year, a report—

9 (1) describing and evaluating the effectiveness

10 of the system of controls on trade in diamonds de11 scribed in section 3(a);

12 (2) identifying those countries that are imple13 menting those controls;

14 (3) identifying those countries that are not im15 plementing those controls, and describing the effects

16 of that failure on the trade in diamonds used to sup17 port conflict in the country or regions in which the

18 diamonds are extracted; and

19 (4) describing in detail technological develop20 ments that allow—

21 (A) the determination of where a diamond

22 was mined; and

23 (B) the marking and tracking of rough

24 and polished diamonds.
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1 SEC. 7. GAO REPORT.

2 Not later than 3 years after the date of the enact3 ment of this Act, the Comptroller General of the United

4 States shall report to the Congress on the effectiveness

5 of the provisions of this Act in preventing the importation

6 of diamonds traded in violation of the system of controls

7 described in section 3(a). The Comptroller General shall

8 include in the report any recommendations on any modi9 fications to this Act that may be necessary.

10 SEC. 8. NEGOTIATION OF INTERNATIONAL AGREEMENT.

11 It is the sense of the Congress that the President

12 should take the necessary steps to negotiate an inter13 national agreement, working in concert with the Kim14 berley Process referred to in section 2(6), to eliminate the

15 trade in diamonds used to support conflict in the country

16 or regions in which the diamonds are extracted. Such an

17 agreement should create an effective global certification

18 system covering diamond exporting and importing coun19 tries, and should include those elements described in sec20 tion 3(a)(2).

21 SEC. 9. DEFINITIONS.

22 In this Act:

23 (1) DIAMONDS.—The term ‘‘diamonds’’ in24 cludes any diamonds or diamond jewelry, classified

25 under heading 7102 or 7113 of the Harmonized

26 Tariff Schedule of the United States, other than dia-
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1 mond jewelry not exceeding $25,000 in value im2 ported by or on account of a person for personal use

3 and accompanying that person upon entry into the

4 United States.

5 (2) ROUGH DIAMONDS.—The term ‘‘rough dia6 monds’’ means diamonds that are unworked, or sim7 ply sawn, cleaved, or bruted, classified under head8 ing 7102 of the Harmonized Tariff Schedule of the

9 United States.

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

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

12 the several States, the District of Columbia, and any

13 commonwealth, territory, or possession of the United

14 States.

15 SEC. 10. EFFECTIVE DATE AND WAIVERS.

16 (a) IN GENERAL.—Except as provided in subsection

17 (b), this Act shall take effect on the date that is 6 months

18 after the date of the enactment of this Act.

19 (b) WAIVER AUTHORITY.—The President may waive

20 the applicability of this Act with respect to a country for

21 a period of not more than 6 months if the President, be22 fore granting the waiver—

23 (1) determines that the country is making sig24 nificant progress toward concluding an international

25 agreement described in section 8 or is implementing
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1 the system of controls on the export and import of

2 rough diamonds described in section 3(a); and

3 (2) transmits that determination, with the rea4 sons therefor, to the Congress.

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