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Kimberley Process Working Document

July 2001

Essential Elements of an International Scheme of Certification for Rough Diamonds

PARTICPANTS

1. Agreeing that there is an urgent need to co-operate in the prevention and settlement of conflicts that have an impact on international peace, safety and security by breaking the link between certain illicit transactions of rough diamonds and such conflicts.

2. Determined to contribute to and support the implementation of measures taken by the United Nations Security Council under Chapter VII of the United Nations Charter to maintain international peace and security

3. Convinced that the possibilities for conflict diamonds to play a role in fuelling armed conflict can be seriously reduced by submitting the international trade in rough diamonds to a certification scheme that would guarantee to the maximum extent practicable the absence of conflict diamonds in that segment of internationally traded rough diamonds.

4. Convinced that any certification scheme in order to be fully effective should comprise all parties involved in diamond production, trade and processing.

5. Recognising that a certification scheme for internationally traded rough diamonds will only be credible, if all participating parties have established supporting internal systems controlling the chain of producing, selling, buying, handling, processing or transporting rough diamonds within their own territory.

6. Also recognising that differences in production methods and trading practices as well as differences in institutional controls thereof may require different approaches to arrive at the same result.

7. Accepting that mutual recognition of national solutions presupposes the ability of participants to judge if internal controls established by countries fulfil minimal requirements of effectiveness and that the need for transparency in this regard is the more necessary because the character of the rough diamonds– high value, low volume – facilitates the circumvention of rules and regulations aiming to control the production of and trade in rough diamonds.

8. Sharing the opinion that an essential requirement of the certification scheme is the willingness of participants to inform each other to the fullest extent on the laws, regulations, rules, procedures and practices which are applicable within their territories with a view to ban conflict diamonds from any consignment of legitimately produced, traded, handled or processed rough diamonds and to remedy possible shortcomings which would exist according to other participants.

9. Aware that the vast majority of rough diamonds produced in the world are from legitimate sources and that the legitimate trade in diamonds makes a critical contribution to economic development in many countries world-wide, and that therefore any measures to control the international trade in rough diamonds should not impose an undue burden on governments or industry, particularly smaller producers, and not hinder the development of the diamond industry.

10. Emphasising that a certification scheme for internationally traded rough diamonds should be consistent with international law governing international trade.

11. Welcoming the constructive contribution and show of corporate responsibility by the diamond industry and the active involvement of civil society

HAVE AGREED THE FOLLOWING

Section I

1. Participants hereby establish the KIMBERLEY PROCESS CERTIFICATION SCHEME FOR ROUGH DIAMONDS.

2. Participants agree on the essential elements of this scheme as spelled out in the following provisions

Section II: Definitions

For the purposes of the Kimberley Process Certification Scheme for Rough Diamonds, the following definitions will apply:

Rough diamonds means diamonds which are unworked or simply sawn, cleaved, bruted or only partially polished and fall under the Harmonised Classification Nomenclature CN codes 7102 10 00, 71 02 21 00, 7102 29 00, 7102 31 00, 71 03 39 00 and 7105 10 00.

Conflict diamonds means rough diamonds, which are used by rebel movements to finance their activities, including attempts to undermine or overthrow legitimate Governments or which are obtained under use or threat of use of coercion or military means.

Import means the physical entering/bringing into any part of the geographical territory of a participant.

Export means the leaving/taking out any part of the geographical territory of a participant.

Transit means the passage across the territory of a participant, with or without transhipment, warehousing or change in mode transport, when such passage is only a portion of a complete journey beginning and terminating beyond the frontier of the participant across whose territory a consignment passes.

Exporting Authority means the authority or body designated by the participants from whose territory a consignment of rough diamonds are leaving.

Importing Authority means the authority or body designated by a participant into whose territory a consignment of rough diamonds is entering.

[PM all necessary customs definitions]

Section III: The Kimberley Process Certificate

Participants agree

1. To establish a Kimberley Process Certificate of which the essential standards in respect of format and procedures for issuance and verification are set out in Annex 1

2. To recognise that a consignment of rough diamonds that is accompanied properly by a Kimberley Process Certificate does not contain any conflict diamonds.

Section IV: Undertakings in respect of International Trade in Rough Diamonds

Each participant undertakes

1. Not to allow any consignment of rough diamonds to be exported unless accompanied by a Kimberley Process Certificate issued by its competent exporting authorities

2. To allow a Kimberley Process Certificate to accompany any consignment of rough diamonds only if the exporting authorities are satisfied that with respect to the consignment of rough diamonds for which the attachment of a Certificate is requested no violation has taken place in respect of the laws, regulations, rules, procedures or practices referred to in Section V.

3. Not to allow any consignment of rough diamonds to be imported unless accompanied properly by a Kimberley Process Certificate issued by the competent exporting authorities in accordance with the provisions set out in Annex I

4. To verify the conformity with the provisions of this scheme of the Kimberley Process Certificate accompanying a consignment of imported rough diamonds,

5. Not to allow any set of rough diamonds to be exported if destined to a non-participant.

6. Paragraphs 1 – 4 of this section do not apply in cases of transit, if the competent authorities of the participant through whose territory a consignment passes, ensure that the consignment leaves its territory in an identical state as it entered its territory.

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Section V: Undertakings regarding Internal Controls

Each participant undertakes

1. To subject any production, storage, mixing, sorting, handling, processing or transport of rough diamonds within its territory to laws, regulations, rules, procedures or practices which will ensure to the maximum extent practicable the absence of conflict diamonds from any consignment of rough diamonds produced, stored, mixed, sorted, handled or transported within its territory, and to take fully into account the recommendations thereto contained in Annex II.

2. To designate the authorities or bodies which will be empowered to issue Kimberley Process Certificates, and to that end, to obtain the necessary evidence that in respect of any consignment of rough diamonds for which a Certificate is requested, no violation has taken place of its laws, regulations, rules, procedures or practices described in paragraph 1 of this section.

3. To designate the authorities or bodies which will be empowered to verify the conformity with the provisions of this scheme of the Kimberley Process Certificate accompanying a consignment of imported rough diamonds.

4. To ensure, in case the fulfilment of any of the tasks mentioned in the foregoing paragraphs is entrusted to private or semi-public bodies, an effective control by the competent public authorities of such fulfilment.

5. To ensure that violations of said laws, regulations, rules, procedures or practices and the provisions of this scheme will be penalised in a dissuasive, effective and proportional manner.

Section VI: Internationl Co-operation, Transparency and Accountability

Each participant undertakes

1. To notify the name(s), address (es) and other relevant data regarding its designated authorities or bodies, and any changes thereof, to the competent authorities or bodies of all other participants and to the Kimberley Process Secretariat. Such data shall include the signatures of the persons authorised to sign the Kimberley Process Certificates and the stamps used.

Transparency

2. To keep all other participants and the Kimberley Process secretariat fully informed about the laws, regulations, rules, procedures and practices that are applicable within its territory that in respect of the absence of conflict diamonds from the production, transport, trading, mixing, sorting, handling or processing of other rough diamonds.

To provide to all other participants and the Kimberley Process secretariat a copy of these laws, regulations, rules, procedures or practices in the original language and in an authorised translation into English.

3. Without prejudice to the protection of commercially sensitive information, to inform all other participants of the relevant statistical data on production and international trade.

Increasing Effectiveness

4. To exchange on a regular basis experiences and other relevant information in order to arrive at the best practices in given circumstances.

5. To invite other participants and, where appropriate, representative segments of the diamonds industry and the civil society, to observe the functioning of the certification scheme within their territories.

6. To consider favourably requests from other participants for assistance to improve the functioning of the certification scheme within their territories

Accountability

7. To co-operate with other participants to solve problems that may arise from accidents, involuntary errors or other unforeseen circumstances which could lead to non-fulfilment of the minimal requirements for the issuance or acceptance of Kimberley Process Certificates; and to inform all other participants of the essence of problems encountered and of solutions found.

8. a. to inform another participants if it considers that the laws, regulations, rules, procedures or practices of that other participant does not longer ensure sufficiently the absence of conflict diamonds in the exports from that other participant;

b. To seek appropriate solutions for any issue raised under the foregoing sub-paragraph;

c. In case no solution is found to submit the issue to all other participants and to request their opinion on the issue and the solutions proposed or introduced;

d. To recognise the right of each participant to suspend the recognition of the validity of the Certificate issued by another participant if and for so long a majority of participants hold the opinion that the latter party has not introduced adequate solutions for the problems identified.

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Section VII: Final Provisions

Kimberley Process Meetings

1. Participants will meet periodically to discuss the effectiveness of the certification scheme, and if necessary, ways and means to increase the effectiveness of the certification scheme

2. Plenary meetings will be held at least once a year. Meetings will be held in principle in the country where the secretariat is located, unless a participant has offered to host a meeting and this offer has been accepted by the other participants.

3. Meetings will choose their chair on an annual basis.

4. The secretariat will provide the necessary assistance.

5. Representative segments of the diamond industry and the civil society will be invited to participate in these meetings as well as representatives of relevant international organisations.

6. Decisions on substance will be reached by consensus of the participants, decisions on procedural matters by a simple majority of participants.

7. Working Groups may be established, if the plenary meeting so decides.

Kimberley Process Secretariat

8. There will be a secretariat financed out of the annual budget with a staff necessary to undertake the following tasks :

• to maintain a data base of the laws, regulations, rules, procedures and practices of participants and of the competent authorities or bodies on the basis of the notifications provided for in Section VI;
• To prepare documents for meetings;
• To gather and analyze statistical information provided by the participants and from other sources;

9. PM Seat of the Secretariat ; composition and organisation ; staff provisions.

Participation

10. The Kimberley Process Certification Scheme will be open, on a global and non-discriminatory basis, to prospective participants that comply with the requirements of the Kimberley Process Certification Scheme. A non-participant may obtain the status of participant if all existing participants recognise that such a non-participant is able and willing to fulfil all requirements of the Kimberley Process Certification Scheme. Admission of new participants will be based on consensus.

11. If participants find that another participant has consistently for more than 1 year failed to fulfil essential requirements under the Kimberley Process Certification Scheme, they may decide to exclude that other participant from further participation.

Annex I - The Kimberley Process Certificate

Standards for format and procedures for issuance and verification

A. Format

Each Certificate shall be

• Tamper and forgery resistant by design, inter alia by use of appropriate inks and security paper with an intaglio border
• Showing a unique sequential registration number, preceded by the International Standardisation Organisation 5ISO) acronym of the participant, and a randomly generated perforated number that may not duplicate the registration number

1. When issued PART I shall provide the following information in clear writing in English:

• Carat/weight and value in US$ or EURO
• number of parcels of each consignment
• Quality characteristics (such as classification)
• Identification of consignment (parcel/container/bag code, invoice reference)
• Identification of issuing export authority, including its signatures and stamps
• Data of issuance
• Point of export/destined point of import, routing and transport means
• Identification of consignee and exporter (names and addresses)

2. PART II shall provide, before return to the issuing authority,

• Stamps and signatures of the importing authority.

B. Procedures for issuing Certificates for export and their verification at import

1. Exporting authorities shall

• Complete all required information on the Certificate
• Enter the data of the Certificate into a computer database
• Retain photocopies of the Certificate and other pertinent documents
• Keep a record of the numbers of the Certificates issued
• Attach the Certificate to the set of diamonds to which it refers in an inseparable way

2. Importing authorities shall

• Verify that the Certificate has not been separated from the set of diamonds to which it refers and all data (including signatures and stamps of exporting authority) are properly filled out.
• Verify the conformity of the physical characteristics and value of the imported set of diamonds with the data provided thereon on the Certificate
• If the verification shows no irregularities, add the appropriate stamps and signatures to the data on the Certificate and return the Certificate to the issuing authority
• If the verification shows irregularities, impound the set of diamonds till a satisfactory solution has found, or, in case such a solution is not found within a reasonable period, return the set of diamonds to the appropriate exporting authority, together with the Certificate without the signature and stamps of the importing authority
• Enter the data of the Certificate in a computer database
• Retain copies of the Certificate and originals or copies of all other relevant documents

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3. Optional practices and procedures:

A. Security Slip

In order to increase the security of the link between a Certificate and the consignment of diamonds to which it refers, a Security Slip could be fixed on the container of the set of diamonds in such a way that the opening of the container causes the Security Slip to rupture and break.

The slip could have the following characteristics

• Intaglio printing.
• Contains red and green UV inks.
• Displays the same sequential printed number as the export and import parts.
• fixed on container and sealing it

B. Use of transparent security bags

• The certificate (fully visible) along with the commercial invoice and the container with the rough diamonds could be put in a tamper proof, transparent, sequentially numbered security bag by the exporting authority.
• Every security bag would have its own detachable tag bearing the number of the bag. When removed from the bag, this identification tag of the numbered security bag would be attached to the photocopy of the Certificate that is retained by the exporting authority.
• The security bag number would be recorded on Part II of the Certificate contained in that bag.
• Only designated importing authorities would be allowed to break the sealing.

C. Electronic Data Transmission

A system of hardware and software could be established that would enhance the overall processing for rough diamond export and import controls. Such an electronic system would include electronic data registration, encryption and data transmittal between the exporting and importing authorities via a secured server.

• Exporting authority would send secure transmittal of a shipment’s characteristics to the importing authority
• All data transmitted would be encrypted to prevent tampering or unauthorised access.
• The stream of transmitted data would include the printed sequential number and the randomly generated perforated number of Part I of the Certificate; total carat/weight; total value, and digitised photographs to enable immediate identification of a bag.

When a container of rough diamonds arrives, the importing authority would transmit a confirmation of receipt to the exporting authority that would include the number of the Security Slip and the sequential number from the security bag in which it was shipped.

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Annex II - Recommendations for internal controls by participants

A. General

1) To issue pertinent disclosure rules for financial institutions and insurance companies.

2) To introduce fair practices regulations or codes.

3) To require regular auditing that takes fully into account the characteristics of the production, trade, handling, storage and processing of rough diamonds.

4) To empower courts or other competent authorities to order that bank, financial or commercial records be made available or be seized in case of suspect transactions in rough diamonds [ and not to decline to act on the ground of bank secrecy].

5) To allow only properly licensed diamond individuals, companies or entities to engage in production, national and international trade of rough diamonds and other directly related activities

6) To issue licenses only to natural or legal persons or entities that pass the relevant security checks

7) To establish an international register of all properly licensed diamond producers and traders (national and international).

8) To establish a list of individuals, companies or entities individuals convicted of illicit diamond activity to appropriate authorities during the last 10 years.

9) To introduce the possibility of disqualifying by court order or any appropriate means for a reasonable period of time persons convicted of violations of the provisions of this scheme from engaging in rough diamond related activities.

B. Production

1) To aim to obtain an ISO certification of production site.

2) To require all diamond buying offices to keep proper records (computerised if possible) of their purchases and sales.

3) To publish known and suspected areas of conflict diamond mining.

C. Imports

1) To require all natural and legal persons or entities owning or holding rough diamonds for commercial purposes to keep proper records (computerised if possible) of their purchases and sales.

Kimberley Process Meeting in Moscow, 3 - 5 July 2001

Significant Progress Made

According to the "roadmap" for the Kimberley Process agreed in Windhoek in February 2001, the aim of the Moscow meeting was the "definition of proposals for minimum acceptable standards" for an international certification scheme for rough diamonds. The plenary meeting in Moscow was successful in that it achieved this objective. By the end of the meeting participants agreed that the Kimberley Process would be able to present to the 56^th Session of the United Nations General Assembly, the progress report required from it.

Participants included the following states, organisations, industry representatives and NGOs: Angola, Armenia, Australia, Belgium, Botswana, Brazil, Burkina Faso, Canada, China, Cote d’Ivoire, European Commission, France, Germany, Ghana, Guinea, India, Indonesia, Ireland, Israel, Italy, Japan, Namibia, the Netherlands, Russian Federation, Sierra Leone, Sweden, Singapore, Switzerland, Tanzania, Thailand, United Kingdom, USA, Venezuela, Zambia, Zimbabwe, the World Diamond Council (representing the diamond industry), Global Witness, Oxfam, Partnership Africa Canada. Observers from the UN Sanctions Committees on Angola and Liberia as well as the Expert Panel on Angola attended. Other observers included the US General Accounting office and a representative from the office of US Congressman Wolf (R-VA).

The Final Communiqué of the plenary meeting is quoted below.

The future work of the Kimberley Process is based on the framework document which was prepared for the Moscow meeting. This framework identifies the various elements of the proposed international certification scheme. All participants in the Kimberley Process have been invited to comment on the text of the framework document.

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In preparation for the next Kimberley Process meeting in London, from 11 to 13 September 2001, the Plenary appointed coordinators to assist the South African Chair to work on the different sections of the framework document. Comment on the framework document will be due to the coordinators by 3 August. Inputs by the coordinators to the Chair will be due by 8 August. The Chair will distribute an initial draft to all participants by 10 August. Comments on the initial draft will be due to the Chair by 17 August. The final distribution by the Chair will take place on 21 August, three weeks before the start of the meeting in London, to enable everyone to prepare adequately.

Final Communiqué

All participants agreed that significant progress was made in identifying the essential elements of a system to combat conflict diamonds. The participants further expected to be able to present to the 56^th Session of the United Nations General Assembly, the report on progress required from the Kimberley process.

On July 3-4, 2001 the Kimberley process met in Plenary Session in Moscow. Representatives of 34 governments, the European Commission, as well as representatives of the international diamond industry, notably the World Diamond Council (WDC), and non-governmental organisations took part in the meeting. The main objective of the meeting was to define minimum acceptable standards for an international system of certification of rough diamonds, consistent with the mandate set out in the United Nations General Assembly Resolution 55/56 of 1 December 2000.

The Kimberley Process Task force met on 2 July in preparation for the Plenary Session. The Task Force considered a framework paper outlining proposed essential elements of the envisaged system of certification. The Task Force also welcomed the results of the global survey on import and export controls relating to the trade in rough diamonds and took note of several discussion papers prepared in response to the decisions taken at the previous Kimberley process meeting in Brussels, in April 2001.

Participants at the Plenary agreed in principle on the basic elements of an international system for certification of rough diamonds. These elements will be elaborated further in preparation for the next meeting of the Kimberley Process. This will include the format and content of certificates accompanying rough diamonds, plus the minimum standards which both support those certificates and underpin the whole system.

Russia presented a model certificate and container sample for storing and transporting of rough diamonds that might be used within the framework of the international scheme being developed, and Guinea presented its Certificate of Origin that was introduced on 18 June 2001.

The importance of putting in place adequate national monitoring and control system to promote transparency and accountability was agreed upon. The progress achieved in implementing the sanctions regimes in Angola and Sierra Leone was welcomed.

Participants welcomed proposals from the world Diamond Council for a system of industry self-regulation, based on a chain of warranties. Wherever possible these warranties would be legally endorsed by the respective governments. It was agreed that such a system of self-regulations would form an integral part of the overall certification scheme.

Based on the achievements of the Moscow plenary meeting the Kimberley Process is able to proceed with the further definition and refinement of detailed proposals for the envisaged certification scheme. The next meeting of the Kimberley Process is scheduled to take place in London in September 2001.

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Last modified: 23 April 2008 07:37:03.