I
107TH CONGRESS
1ST SESSION
H. R. 2722
To implement a system of requirements on the importation of diamonds,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 2, 2001
Mr. HOUGHTON (for himself, Mr. RANGEL, Mr. HALL of Ohio, Mr. WOLF,
Mr. ROYCE, Mr. PAYNE, Mr. EHLERS, Mr. LANTOS, Mr. COOKSEY, Mr.
RUSH, Mr. GREENWOOD, Mr. GEORGE MILLER of California, Mr.
FLETCHER, Mr. ACKERMAN, Mr. LATOURETTE, Ms. CARSON of Indiana,
Mrs. NORTHUP, Mr. BOUCHER, Mr. ROGERS of Michigan, Mr. ALLEN,
Mr. SCHAFFER, Mr. DELAHUNT, Mr. WELDON of Florida, Ms. BALDWIN,
Mr. UPTON, Mr. MCDERMOTT, Mr. DIAZ-BALART, Ms. RIVERS, Mr.
ENGLISH, Mr. SNYDER, Mr. UDALL of Colorado, Ms. WOOLSEY, Mr.
COYNE, Mr. STARK, Mr. JEFFERSON, Mr. NEAL of Massachusetts, Mr.
EVANS, Mr. HOEFFEL, and Mr. LEWIS of Georgia) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means
A BILL
To implement a system of requirements on the importation
of diamonds, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives 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) Diamonds are being used by rebels and dic-
tators to finance military activities, overthrow legiti-
mate 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 advocates, the diamond trade
as represented by the World Diamond Council, and
the United States Government recently began work-
ing to block the trade in conflict diamonds. Their ef-
forts have helped to build a consensus that action is
urgently needed to end the trade in conflict dia-
monds.
(4) The United Nations Security Council, act-
ing under chapter VII of the Charter of the United
Nations, has prohibited all states from importing
diamonds from, and exporting weapons to, certain
countries affected by diamond-related conflicts. Un-
fortunately, diamond smugglers continue funding
rebel movements, which has led in turn to regional
destabilization, arms proliferation, and other activi-
ties which are a potential threat to the essential se-
curity interests of the United States, and the United
Nations sanctions have not been sufficiently effective
to achieve their goals. In order to put an end to this
emergency situation in international relations, to
maintain international peace and security, and to
protect its essential security interests, and pursuant
to its obligations under the United Nations Charter,
the United States must take action against this il-
licit trade and smuggling of conflict diamonds.
(5) Articles XX and XXI of GATT 1994 allow
WTO member countries to take measures to deal
with situations such as that presented by the current
trade in conflict diamonds without violating their
WTO obligations.
(6) Without effective action to eliminate trade
in conflict diamonds, the trade in legitimate dia-
monds faces the threat of a consumer backlash that
could damage the economies of countries not in-
volved 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 20 other countries are involved in working,
through the ‘‘Kimberley Process’’, toward devising a
solution to this problem. As the consumer of a ma-
jority of the world’s supply of diamonds, the United
States has an obligation to help sever the link be-
tween diamonds and conflict and press for imple-
mentation of an effective solution.
(7) Trade in conflict diamonds could have a se-
vere 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 re-
solve the regional conflicts in sub-Saharan Africa
which facilitate the trade in conflict diamonds.
SEC. 3. DEFINITIONS.
In this Act:
(1) DIAMONDS.—The term ‘‘diamonds’’ means
diamonds classified under subheading 7102.31.00 or
subheading 7102.39.00 of the Harmonized Tariff
Schedule of the United States.
(2) GATT 1994.—The term ‘‘GATT 1994’’
means the General Agreement on Tariffs and Trade
annexed to the WTO Agreement.
(3) POLISHED DIAMONDS.—The term ‘‘polished
diamonds’’ means diamonds that are classified under
subheading 7102.39.00 of the Harmonized Tariff
Schedule of the United States.
(4) ROUGH DIAMONDS.—The term ‘‘rough dia-
monds’’ means diamonds that are unworked, or sim-
ply sawn, cleaved, or bruted, classified under sub-
heading 7102.31.00 of the Harmonized Tariff
Schedule of the United States.
(5) 
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.
(6) WTO 
AGREEMENT.—The term ‘‘WTO
Agreement’’ means the Agreement Establishing the
World Trade Organization entered into on April 15,
1994.
(7) WORLD TRADE ORGANIZATION AND WTO.—
The terms ‘‘World Trade Organization’’ and
‘‘WTO’’ mean the organization established pursuant
to the WTO Agreement.
SEC. 4. REQUIREMENTS FOR THE IMPORTATION OF DIA-
MONDS.
(a) REQUIREMENTS.—
(1) ROUGH DIAMONDS.—Rough diamonds may
not be imported into the United States from a coun-
try unless the country exporting the rough diamonds
is implementing a system of controls on the export
from, and import into, that country of rough dia-
monds that—
(A) meets the requirements of paragraph
(2), consistent with United Nations General As-
sembly Resolution 55/56 adopted on December
1, 2000;
(B) the President determines to be func-
tionally equivalent to the system of controls
specified in subparagraph (A); or
(C) meets the requirements of an inter-
national agreement which requires controls de-
scribed in subparagraph (A) and to which the
United States is a party.
(2) SYSTEM
OF
CONTROLS.—The system of
controls referred to in paragraph (1)(A) shall in-
clude the following requirements:
(A) Rough diamonds, when exported from
the country in which they were extracted, shall
be sealed in a secure, transparent container or
bag by appropriate government officials of that
country.
(B) The sealed container or bag described
in subparagraph (A) shall include a fully visible
document that—
(i) certifies the country from which
the rough diamonds were extracted;
(ii) records a unique export registra-
tion number for, and the total carat weight
of, the rough diamonds in the container or
bag; and
(iii) is issued by the government of
that country.
(C) The country from whose territory the
rough diamonds are first exported shall main-
tain at least the information on exports of
rough diamonds described in subparagraph (B).
(D) Any country into whose territory the
rough diamonds are first imported prior to
polishing or other processing—
(i) shall permit importation of the
rough diamonds only in a container or bag
described in subparagraphs (A) and (B);
and
(ii) shall verify, on the basis of docu-
mentation provided to it by electronic or
other reliable means, the legitimacy of the
export document included in the sealed
container or bag in which the rough dia-
monds were shipped, using the information
maintained by the country of export.
(E) Appropriate government authorities of
countries that import rough diamonds shall
conduct reasonable physical inspections of a
sampling of the sealed containers and bags of
rough diamonds to ensure compliance with the
requirements of this paragraph.
(3) POLISHED DIAMONDS.—Polished diamonds
may not be imported into the United States from a
country 
unless 
the 
country 
exporting 
the
diamonds—
(A) is implementing a system of controls
on the export from, and import into, that coun-
try of rough diamonds described in paragraph
(1), except that such system shall not be re-
quired for those countries that do not import
rough diamonds; and
(B) requires that its own imports of dia-
monds originate from countries that have imple-
mented a system of controls on the export and
import of rough diamonds described in para-
graph (1).
(4) JEWELRY
CONTAINING
DIAMONDS.—Jew-
elry containing diamonds may not be imported into
the United States from a country unless the country
exporting the jewelry—
(A) is implementing a system of controls
on the export and import of rough diamonds
described in paragraph (1), except that such
system shall not be required for those countries
that do not import rough diamonds; and
(B) requires that its own imports of dia-
monds originate from countries that have imple-
mented a system of controls on the export and
import of rough diamonds described in para-
graph (1).
(5) EXCLUSIONS.—
(A) IN GENERAL.—The provisions of this
subsection do not apply to—
(i) jewelry containing diamonds im-
ported by or on behalf of a person for per-
sonal use and accompanying a person upon
entry into the United States; or
(ii) diamonds or jewelry containing
diamonds, previously exported from the
United States and reimported by the same
importer, without having been advanced in
value or improved in condition by any
process or other means while abroad, if the
importer declares that the reimportation of
the diamonds or jewelry, as the case may
be, satisfies the requirements of this
clause.
(B) REGULATIONS.—The Secretary of the
Treasury is authorized to promulgate regula-
tions to ensure that the exclusions described in
subparagraph (A) do not become a means to
evade the requirements made by this section.
(b) MONITORING.—The President shall ensure that
any system of controls described in subsection (a)(1) is
monitored by appropriate agencies of the United States.
(c) PRESIDENTIAL ADVISORY COMMISSION.—
(1) PURPOSE.—The President shall appoint an
advisory commission the purpose of which shall be to
make recommendations to the President on the ef-
fectiveness of the monitoring system under sub-
section (b), and on ways to improve that monitoring
system.
(2) MEMBERSHIP.—The advisory commission
shall be composed of 9 members, 2 of whom shall be
representatives of private and voluntary organiza-
tions, and 2 of whom shall be representatives of the
diamond industry. The remaining members may be
appointed from appropriate agencies of the United
States and other interested parties.
SEC. 5. ENFORCEMENT.
Diamonds and jewelry containing diamonds imported
into the United States in violation of section 4 are subject
to the seizure and forfeiture laws, and all criminal and
civil laws of the United States shall apply, to the same
extent as any other violation of the customs and naviga-
tion laws of the United States.
SEC. 6. WAIVER AUTHORITY.
(a) WAIVER AUTHORITY.—The President may at any
time waive the applicability of this Act with respect to a
country for a period of not more than 6 months if the
President, before granting the waiver—
(1) determines that the country is cooperating
because the country—
(A) is making significant progress toward
concluding an international agreement such as
the one described in section 11; or
(B) is acting in good faith to establish and
enforce a unilateral certification system con-
taining the requirements described in section
4(a); and
(2) transmits that determination, with the rea-
sons therefor, to Congress.
(b) EVALUATION CRITERIA.—Not later than 180
days after the date of enactment of this Act, the Presi-
dent, in consultation with the heads of appropriate Fed-
eral agencies, shall develop and publish criteria that will
be used to evaluate whether or not a country is a cooper-
ating country for purposes of subsection (a). Before adopt-
ing such criteria in final form, the President shall provide
for public notice of, and a period for public comment on,
the criteria.
SEC. 7. ANNUAL REPORTS.
Not later than 6 months after the date of the enact-
ment of this Act, and not later than September 30 of each
subsequent calendar year, the President shall transmit to
Congress a report—
(1) describing and evaluating the effectiveness
of any system of controls on trade in diamonds de-
scribed in section 4(a)(1);
(2) identifying those countries that are imple-
menting those controls;
(3) identifying those countries that are not im-
plementing those controls, and describing the effects
of that failure on the trade in diamonds used to sup-
port conflict in the country or regions in which the
diamonds are extracted; and
(4) describing in detail technological develop-
ments that allow—
(A) the determination of where a diamond
was mined; and
(B) the marking and tracking of rough
and polished diamonds.
SEC. 8. GAO REPORT.
Not later than 3 years after the date of enactment
of this Act, the Comptroller General of the United States
shall transmit a report to Congress on the effectiveness
of the provisions of this Act in preventing the importation
of diamonds traded in violation of any system of controls
described in section 4(a)(1). The Comptroller General
shall include in the report any recommendations on any
modifications to this Act that may be necessary.
SEC. 9. STATUTORY CONSTRUCTION.
This Act may not be construed to apply to restric-
tions on the importation of diamonds in effect on its date
of enactment or to diminish the authority of the President
under the International Emergency Economic Powers Act
or any other Act to impose restrictions on the importation
of diamonds after such date.
SEC. 10. CONSISTENCY OF ACTIONS UNDER THIS ACT WITH
THE WTO.
(a) STATUTORY CONSTRUCTION.—Nothing in this
Act requires the Secretary of the Treasury or the Commis-
sioner of Customs to take any action that would be a viola-
tion of United States obligations under the agreements of
the World Trade Organization, as determined in any dis-
pute settlement proceeding under the WTO.
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that, in the event there is a determination in any
dispute settlement proceeding under the WTO that this
Act, any part of this Act, or any action taken under this
Act is inconsistent with United States obligations under
the WTO, the United States will take such steps as are
necessary to bring itself into conformity with its WTO ob-
ligations.
SEC. 11. SENSE OF CONGRESS.
(a) SENSE OF CONGRESS ON NEGOTIATION OF AN
INTERNATIONAL TRADE AGREEMENT.—It is the sense of
Congress that the President should take the necessary
steps to negotiate an international trade agreement, work-
ing in concert with the Kimberley Process referred to in
section 2(6), to eliminate the trade in diamonds used to
support conflict in the country or regions in which the dia-
monds are extracted. Such an agreement should create an
effective global certification system covering diamond ex-
porting and importing countries, and should include—
(1) the requirements described in section 4(a);
(2) a requirement that any country from whose
territory rough diamonds are exported publish an-
nual reports disclosing the names of all entities and
individuals who hold mining concessions, licenses to
purchase rough diamonds, and licenses to export
rough diamonds, as well as the volume and value of
such diamonds exported categorized by country of
importation; and
(3) a requirement that any country into whose
territory rough diamonds are imported publish an-
nual reports disclosing the source by country of ex-
portation of its diamond imports as well as the vol-
ume and value of such diamonds for each such coun-
try of exportation.
(b) SENSE OF CONGRESS REGARDING TRADE IN LE-
GITIMATE DIAMONDS.—It is the sense of Congress that
the provisions of this Act should not impede the trade in
legitimate diamonds with countries which are working con-
structively to eliminate trade in conflict diamonds, includ-
ing through the negotiation of an effective international
trade agreement to eliminate trade in conflict diamonds.
SEC. 12. SENSE OF CONGRESS ON IMPLEMENTATION OF
THE SYSTEM OF CONTROLS.
It is the sense of Congress that companies involved
in diamond extraction and trade should make financial
contributions to countries seeking to implement any sys-
tem of controls described in section 4(a)(1), if those coun-
tries would have financial difficulty implementing that sys-
tem of controls.
SEC. 13. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Presi-
dent $5,000,000 for fiscal year 2002 to provide assistance
to countries seeking to implement any system of controls
described in section 4(a)(1), if those countries would have
financial difficulty implementing that system of controls.
SEC. 14. EFFECTIVE DATE.
This Act shall take effect 6 months after its date of
enactment.
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