The United States has issued changes to the rules that apply to the import and export of diamonds in the rough. The changes were made to help further oversee the import and export of the rough diamond trade. One of the most significant changes in the policy is that reports must now be filed for all diamonds. In the past rough diamonds that were valued under $2,500 were allowed to enter informally. The new laws will take effect starting in September 2008. The new laws apply to all rough diamond imports into the United States. The diamonds must be entered using a U.S. Customs and Border Protection Entry Summary form. The importers of these rough diamonds must also submit a yearly report of all the import and export activity. Currently all rough diamonds that are either exported or imported are required to include a special certificate called the Kimberly Process.
The Kimberly Process Certification Scheme was adopted in 2003 by many nations to prevent rough diamonds being used to finance civil wars. This happened in the 1990’s in Sierra Leone, Liberia and Angola. Strict penalties are enforced for those who do not follow the proper rules and submit the correct paperwork.
In the United States the Clean Diamond Trade Act was enacted in 2003 to carry out the standards set forth in the Kimberly Process Certification Scheme. Every diamond must now have a Kimberly Process certificate. Additionally there are rules as to how diamonds must be shipped. All rough diamonds must be placed in tamper proof containers.
Rough diamonds may be imported or exported to any of the 74 countries that participate in the Kimberly Process. If a country does not participate then the U.S. is prohibited from receiving any diamonds from them. This includes rough diamonds that come from Cote d’lvoire, as there is currently an embargo set forth from the United Nations.
It is the responsibility of diamond companies who import and export rough diamonds to make sure that they know and abide by these rules. For instance all importers and exporters are required by law to keep records of their activities and diamond certificates for a period of five years. They must fax or send copies of the forms to the U.S. Census bureau for processing.
These increased rules are the result of a report issued by the U.S. Government Accountability Office in 2006. In the report they ask for more and better methods to oversee rough diamond importation and exportation. They felt that the diamond trade regulations were too lax and more restriction was necessary. The new rules are meant to be an extension of the regulations that are already set in place and being followed.
It should be noted that many of the largest diamond importers and exporters were already following many of the recommendations set forth in the new rules. Reputable companies already provide Kimberly Process Certificates for their imported rough diamonds. The major change has to do with rough diamonds that are smaller in size.
Previously the importers did not need to provide specific certificates and reports for diamonds worth less than $2,500. This new rule will mark a change in the process that diamond importers use to process diamonds. Now all diamonds will follow the same procedure and must all be accounted for equally.
These changes will undoubtedly require an increase in the customs agents handling precious gem imports. With the new regulations in place starting in September there will be the need for even more gems to be reviewed by customs. The new regulations just help to strengthen the participation by the U.S. in the Kimberly Process.
The U.S.Customs Department advises consumers to purchase rough diamonds through reputable dealers only. One way that exporters and importers are getting around the laws is by selling rough diamonds through online auctions. The diamonds are then shipped to the winner who may end up with customs problems. The diamonds most likely will not contain the proper certification and therefore may be considered illegal. If customs were to review the contents and find diamonds without certification they may be confiscated and consumers may not get the items they paid for.
For the most part, however, consumers need not worry about the new laws and processes. As long as they make their purchases from reputable dealers they will not run into any problems. It is a good idea, however, for the consumer to be aware of the certification process to ensure that they receive a rough diamond that has entered the country legally.
