Professional Jeweler Archive: WDC Sets Sept. 1 Deadline for Conflict Diamond Controls

March 2001

Diamonds/News


WDC Sets Sept. 1 Deadline for Conflict Diamond Controls

The World Diamond Council proposes model legislation to ban U.S. imports of conflict diamonds and to enact international controls


The World Diamond Council unanimously approved a legislative proposal to ban conflict diamonds from entering the U.S. at a meeting Jan. 17-18 in London, England. The action clears the way for Matthew Runci, executive director of WDC and CEO of Jewelers of America, to push for the proposal’s introduction in the U.S. Congress. WDC, which the jewelry industry formed last year to fight conflict diamonds, hopes the legislation is signed into law and effective by Sept. 1.

If it becomes law, all diamonds from Sierra Leone and Angola would be banned from entering the U.S. unless they meet the requirements of those countries’ certificate-of-origin programs.
The legislation also would allow the U.S. to bar diamond imports from seven other nations if their shipments are suspect. These nations are Liberia, Burkina Faso, the Democratic Republic of Congo, the Ivory Coast, Guinea, Togo and Ukraine, all of which have been accused of transhipping conflict diamonds.

The proposed legislation also provides for civil penalties of $250,000 and criminal prosecution for violators of the ban. The U.S. Customs Service would be authorized to seize contraband under certain circumstances.

International Controls

The proposed legislation also asks President Bush to spearhead efforts to complete an international conflict diamond treaty by Aug. 31. The treaty would mandate a certificate-of-origin program for rough diamonds on a global scale. All countries that mine, process, transship and import rough diamonds would be asked to sign.

British MP/Minister of State Peter Hain lauded the industry’s progress in developing and championing an international certification plan. “I’m here to praise,” he said after the proposal won approval. “Thanks to everyone’s efforts, you’ve succeeded in pushing the momentum. Your actions prove the diamond industry considers this issue to be of utmost importance.” Hain also said Great Britain would look very quickly into drafting its own legislation. Also praising the action was Maria Borg, deputy assistant secretary of the U.S. State Department.

Implementing the System

WDC approved the certification proposal just prior to a February meeting with diamond-producing countries in Windhoek, Namibia, scheduled to mesh the WDC proposal with other relevant proposals from producer countries.

The focus now is on what concrete steps the governments of involved countries will take. The proposed certification system would include the following controls:

Exports

  • All rough diamonds packaged for export would be sealed in a transparent, tamper-proof security bag by a government official of the exporting country.
  • The sealed bag would include a fully visible certificate of export origin with a unique registration number, total carat weight and total export value of the rough shipment.
  • Shipment data (registration number, carat weight and value) would be recorded in a government-controlled system.

Imports

  • Only sealed containers of rough diamonds originating from a country that strictly implements rough diamond export controls as defined above would be allowed into any participating country.
  • The importing country would have to verify the information on the export document by electronic or other reliable means.
  • Sealed containers of rough diamonds would be subject to inspection by authorities.

Paperwork Trail

A secured, computerized tracking system would ensure:

  • The exporting authority sends a secure transmittal of a shipment’s characteristics to the import authority.
  • All information transmitted is encrypted to prevent tampering or unauthorized access.
  • The stream of transmitted information includes relevant certificate numbers and total carat weights, total values and digitized photographs to enable immediate identification.
  • When a package of rough arrives, the importing authority transmits a confirmation of receipt to the exporting authority, including all relevant security numbers on the packaging.

Enforcement

While the goals the WDC has achieved so far have encouraged government and non-governmental officials alike, much remains to be done. Some WDC members and observers at the meeting in London complained about importing countries acting sluggishly (or not at all) in prosecuting rogue traders of conflict diamonds. Hain, Britain’s MP/minister of state, asked WDC members to submit a list of suspects to his office.

But all parties concurred the trading of conflict diamonds would be driven mostly into the gutter once laws are enacted. “I’m very happy the industry has gone such a long way in such a short while,” said Ian Smillie of Partnership Africa Canada, a non-governmental agency fighting conflict diamonds. “What we need now is legislation passed in producing and importing countries to back this up. That’s why the Windhoek meeting was crucial – governments are going to have to commit to doing something.” WDC Chairman Eli Izhakoff agreed: “Now it is up to governments to turn these principles into law and enforce the rules vigorously.”

Enforcement could be the Achilles heel of the international certification program, however. Eyewitness reports from journalists in conflict countries such as Angola and Sierra Leone and U.N. reports about these countries cite examples where rebel groups bought conflict diamonds and presented them as legitimately mined ones. Then same diamonds were included in officially certified parcels.

The solution, say some experts, is for the U.N. and responsible governments to devise a monitoring system to track diamonds from often distant, unregulated alluvial sources to the cities where government officials certify them. The manpower to enforce such monitoring could be a problem, however, because there are vast expanses of alluvial diamond mining in Angola and Sierra Leone under extremely dangerous and unregulated conditions.

  • World Diamond Council, New York City; (800) 223-0673, (646) 658-0246, www.worlddiamondcouncil.com.
WDC Cites List of Suspected Transhippers

The proposed WDC legislation would ban uncertified diamond imports from Angola and Sierra Leone. It also would give the U.S. the authority to ban imports from certain countries suspected of transhipping conflict diamonds. Those countries are highlighted above (also named were the Democratic Republic of Congo in central Africa and Ukraine). Ghana, Gambia and Mali, though named as suspected transhippers in a recent U.N. report, are not targeted in this legislation.

– by Robert Weldon, G.G.

Copyright © 2001 by Bond Communications