Originally published on Diaz Trade Law Blog
Co-Authored by Jennifer Diaz and Sharath Patil
What’s the Kimberley Process?
Established in 2003, the Kimberley Process (“KP”) is a multilateral trade regime created to prevent the flow of conflict diamonds. Conflict diamonds, also known as “blood” diamonds, are rough diamonds used by rebel movements or their allies to finance armed conflicts aimed at undermining legitimate governments. Under the Kimberley Process Certification Scheme, participant states implement safeguards on shipments of rough diamonds and certify them as “conflict-free.” The regime is credited with removing 99.8 percent of conflict diamonds from the global supply chain. The Process comprises 83 countries, and a number of civil society organizations and industry associations. The participants include all major rough diamond producing, exporting and importing countries.
Process participant countries are eligible to trade in rough diamonds because of their commitment to mitigate conflict diamond trade. The Process’ enforcement mechanism works through granting authentic Process certificates. The Process grants certificates to individuals and entities demonstrating that they are trading in conflict-free diamonds, in collaboration with participant governments.Kimberley Diamond-Trading
Participant governments facilitate the enforcement by:
- Satisfying ‘minimum requirements’ and establish national legislation, institutions and import/export controls
- Committing to transparent practices and to the exchange of critical statistical data
- Trading only with fellow members who also satisfy the fundamentals of the founding agreement
- Certifying shipments as conflict-free and provide the supporting certification
Addition of the United Kingdom
The member-states of the European Union (“EU”) are jointly represented in the Kimberley Process by the EU. However, given the formal withdrawal of the United Kingdom from the EU, the United Kingdom has now joined the Kimberley Process representing itself.
The Clean Diamond Trade Act of 2003 requires the U.S. President to prohibit the importation into or the exportation from the United States of any rough diamond that has not been controlled through the Kimberley Process. Furthermore, the Act requires the President to publish in the Federal Register a list of all participants and to update the list as necessary. Accordingly, on January 8, 2021, the U.S. State Department announced that its own corresponding list of participants eligible for trade in rough diamonds under the Clean Diamond Trade Act of 2003 was updated to include the United Kingdom as an independent participant state.
Obtaining a Kimberley Process Certificate or Becoming a Licensee
The Clean Diamond Trade Act of 2003 established a Kimberley Process Implementation Coordinating Committee to coordinate the implementation of the Act. Provisions of the Act are implemented by a private non-profit, the U.S. Kimberley Process Authority (“USKPA”), in partnership with several U.S. government agencies including:
- U.S. State Department’s Bureau of Economic & Business Affairs
- U.S. Commerce Department’s Census Bureau
- U.S. Customs and Border Protection’s Office of Trade
According to federal regulations, Kimberley Process certificates must accompany every export of rough diamonds from the United States. According to the U.S. State Department, “rough diamonds” are diamond products classified under HTSUS 7102.10, 7102.21, and 7102.31. Only USKPA licensees can obtain KP certificates for use when exporting rough diamonds. The USKPA advises that entities that often export rough diamonds should consider becoming a USKPA licensee.
To become a USKPA licensee, businesses must
- complete an application,
- supply an industry reference, and
- demonstrate that you are a bona fide member of the diamond industry, which can be done by showing that you have been in business for at least two years.
If your application is approved, the USKPA will prepare a license agreement with requirements including procedures for using KP certificates to export diamonds in compliance with regulations. These include an agreement to submit to periodic performance reviews by representatives of the U.S. government and the USKPA.
As a licensee, you will be asked to:
- Ensure the security of KP certificates in your possession.
- Comply with all federal regulations pertaining to the use of KP certificates for the import and export of rough diamonds.
- Submit U.S. and foreign country KP certificates to the proper authorities in the U.S.
- Maintain all records and documentation pertaining to the use of KP certificates for five years.
The U.S. State Department publishes an annual report on the to the Kimberley Process. The most recent iteration of this report is available here.
If you have questions about the Kimberley Process or require assistance obtaining a Kimberley Process certificate or USKPA license, or your goods have been detained or seized based upon an alleged violation of the Kimberley process, contact Diaz Trade Law today at firstname.lastname@example.org or 305-456-3830.