Council Regulation (EC) No 2368/2002 of 20 December 2002 implementing the Kimberley Process certification scheme for the international trade in rough diamonds

CHAPTER I

SUBJECT MATTER AND DEFINITIONS

Article 1

This Regulation sets up a Union system of certification and import and export controls for rough diamonds for the purposes of implementing the Kimberley Process certification scheme.

For the purposes of the certification scheme, the territory of the Union and that of Greenland shall be considered as one entity without internal borders.

This Regulation does not prejudice or substitute any provisions in force relating to customs formalities and controls.

Article 2

For the purposes of this Regulation the following definitions shall apply:

(a) ‘Kimberley Process’ means the forum in which the participants have designed an international certification scheme for rough diamonds;

(b) ‘Kimberley Process certification scheme’ (hereinafter ‘KP certification scheme’) means the international certification scheme negotiated by the Kimberley Process as set out in Annex I;

(c) ‘Participant’ means any State, regional economic integration organisation, WTO-member or separate customs territory that fulfils the requirements of the KP certification scheme, has notified that fact to the Chair of the KP certification scheme and is listed in Annex II;

(d) ‘certificate’ means a document duly issued and validated by a participant's competent authority identifying a shipment of rough diamonds as being in compliance with the requirements of the KP certification scheme;

(e) ‘competent authority’ means the authority designated by a participant to issue, validate or verify certificates;

(f) ‘Community authority’ means a competent authority designated by a Member State and listed in Annex III;

(g) ‘Community certificate’ means a certificate corresponding to the specimen in Annex IV and issued by a Community authority;

(h) ‘conflict diamonds’ means rough diamonds as defined under the KP Certification Scheme;

(i) ‘rough diamond’ means a diamond that is unworked or simply sawn, cleaved or bruted and falls under the Harmonised Commodity Description and Coding System 7102 10 , 7102 21 and 7102 31 (hereinafter ‘HS code’);

(j) ‘imports’ means the physical entering or bringing into any part of the geographical territory of a participant;

(k) ‘export’ means the physical leaving or taking out of any part of the geographical territory of a participant;

(l) ‘shipment’ means one or more parcels;

(m) ‘parcel’ means one or more diamonds that are packed together;

(n) ‘parcel of mixed origin’ means a parcel that contains rough diamonds from two or more countries of origin;

(o) ‘Community territory’ means the territories of the Member States to which the Treaty is applicable, under the conditions laid down in that Treaty;

(p) ‘Certified stock’ means a stock of rough diamonds to which this Regulation applies, and whose location, volume and value, and changes therein, have been submitted to effective supervision of a Member State;

(q) ‘Customs transit’ means transit as provided for by Articles 91 to 97 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (¹).

CHAPTER II

IMPORT REGIME

Article 3

The import of rough diamonds into the Community (²) territory or Greenland shall be prohibited unless all of the following conditions are fulfilled:

(a) the rough diamonds are accompanied by a certificate validated by the competent authority of a participant;

(b) the rough diamonds are contained in tamper-resistant containers, and the seals applied at export by that participant are not broken;

(c) the certificate clearly identifies the consignment to which it refers.

Article 4

A Community authority shall opt for either of the following methods to verify that the content of a container matches the particulars on the corresponding certificate:

(a) it will open each container with a view to such verification; or

(b) it will identify the containers to be opened with a view to such verification on the basis of a risk analysis or equivalent system that gives due consideration to rough diamond shipments.

Article 5

If a Community authority establishes that the conditions in Article 3 are:

(a) fulfilled, it shall confirm this on the original certificate and provide the importer with an authenticated and forgery-resistant copy of that confirmed certificate. This confirmation procedure shall take place within 10 working days of the submission of the certificate;

(b) not fulfilled, it shall detain the shipment.

Article 6

Article 7

Notwithstanding the provisions of Articles 3, 4 and 5, a Community authority may allow the import of rough diamonds if the importer provides conclusive evidence that those diamonds were destined for import into the Community and were exported 5 working days or less before the date of applicability of the Articles referred to in Article 29(3).

In such cases, the Community authority concerned shall issue the importer with a confirmation of legal import, to the effect that those diamonds shall be considered to have fulfilled the conditions of Article 3.

Article 8

Article 9

The Commission shall provide all Community authorities with authenticated specimens of the participants' certificates, the names and other relevant details of the participants issuing and/or validating authorities, authenticated specimens of stamps and signatures attesting that a certificate has been legally issued or validated and any other relevant information received in respect of certificates.

Article 10

For each certificate this report shall list at least:

(a) the unique certificate number,

(b) the name of the issuing and validating authorities,

(c) the date of issue and validation,

(d) the date of expiry of validity,

(e) the country of provenance,

(f) the country of origin, where known,

(g) the HS code(s),

(h) the carat weight,

(i) the value,

(j) the verifying Community authority,

(k) the date of verification.

The Commission may, in accordance with the procedure referred to in Article 22(2), determine the format of this report in order to facilitate monitoring of the certification scheme's working.

CHAPTER III

EXPORT REGIME

Article 11

The export from the Community territory or Greenland of rough diamonds shall be prohibited unless both of the following conditions are fulfilled:

(a) the rough diamonds are accompanied by a corresponding Community certificate issued and validated by a Community authority;

(b) the rough diamonds are contained in tamper-resistant containers sealed in accordance with Article 12.

Article 12

The Community authority may issue a Community certificate to an exporter when it has established that:

(a) the exporter has provided conclusive evidence that: (i) the rough diamonds for which a certificate is being requested were lawfully imported in accordance with Article 3; or (ii) the rough diamonds for which a certificate is being requested were mined or extracted in Greenland in case the rough diamonds have not been previously exported to a participant other than the Union.

(b) the other information requested on the certificate is correct;

(c) the rough diamonds are effectively destined for arrival in the territory of a participant, and

(d) the rough diamonds are to be transported in a tamper-resistant container.

A Community authority shall opt for either of the following methods to verify that the content of a container matches the particulars thereon on the certificate:

(a) it will verify the content of each container; or

(b) it will identify the containers, the content of which shall be verified, on the basis of a risk analysis or equivalent system that gives due consideration to rough diamond shipments.

Article 13

If an exporter is a member of a diamond organisation listed in Annex V, the Community authority may accept as conclusive evidence of lawful import into the Community a signed declaration by the exporter to that effect. Such a declaration shall contain at least the information to be given in an invoice under Article 17(2)(a)(ii).

Article 14

Article 15

For each certificate this report shall list at least:

(a) the unique certificate number,

(b) the name of the issuing and validating authorities,

(c) the date of issue and validation,

(d) the date of expiry of validity,

(e) the country of provenance,

(f) the country of origin, where known,

(g) the HS code(s),

(h) the carat weight and value.

In accordance with the procedure referred to in Article 22(2), the Commission may determine the format of the report in order to facilitate monitoring of the certification scheme's working.

They shall provide the Commission or persons or bodies designated by the Commission with access to those authenticated copies and this information, in particular with a view to answering questions raised within the framework of the KP certification scheme.

Article 16

CHAPTER IV

INDUSTRY SELF-REGULATION

Article 17

When applying for listing, an organisation shall:

(a) provide conclusive evidence that adopted rules and regulations whereby its members dealing in rough diamonds, whether natural or legal persons, undertake that they will, at the latest from the date of applicability of the Articles referred to in Article 29(3): (i) sell only diamonds purchased from legitimate sources in compliance with the provisions of relevant United Nations Security Council Resolutions and of the Kimberley Process Certification Scheme and guarantee in writing on the invoice accompanying each sale of rough diamonds that, on the basis of their personal knowledge and/or written warranties provided by the supplier of such rough diamonds, the rough diamonds sold are therefore not conflict diamonds; (ii) see that each sale of rough diamonds is accompanied by an invoice containing the said signed guarantee unequivocally identifying the seller and buyer and their registered offices, containing the VAT identification number of the seller, where applicable, the quantity/weight and qualification of the goods sold, the value of the transaction and the date of delivery; (iii) not buy rough diamonds from suspect or unknown sources of supply and/or rough diamonds originating in non-participants in the KP certification scheme; (iv) not buy rough diamonds from any source found, after legally binding due process, to have violated government laws and regulations concerning the trade in conflict diamonds; (v) not buy rough diamonds in, or from, any region that is the subject of an advisory notice from a governmental or KP certification scheme authority to the effect that conflict diamonds are emanating from, or are available for sale in, that region; (vi) not knowingly buy, sell or assist others in buying or selling conflict diamonds; (vii) ensure that all employees buying or selling rough diamonds within the diamond trade are fully informed of trade resolutions and government regulations restricting the trade in conflict diamonds; (viii) create and maintain for at least three years records of invoices received from suppliers and issued to customers; (ix) instruct an independent auditor to certify that these records have been created and maintained accurately and either that it has identified no transactions which failed to comply with the undertakings referred to in (i) to (viii) or that any transaction which failed to comply with such undertakings has been duly reported to the appropriate Community authority; and

(b) provide conclusive evidence that is has adopted rules and regulations which oblige the organisation: (i) to expel any member found, after a due process inquiry by the organisation itself, to have seriously violated the abovementioned undertakings; and (ii) to publicise that member's expulsion and notify the Commission thereof; (iii) to make known to all its members all governmental and KP certification scheme laws, regulations and guidelines regarding conflict diamonds and the names of any natural or legal person found guilty, after legally binding due process, of violating these laws and regulations; and

(c) provide the Commission and the appropriate Community authority with a complete list of all its members dealing in rough diamonds, including full names, addresses, location and other information which will contribute to avoiding mistaken identities.

(a) A listed organisation or a member thereof shall provide the relevant Community authority with access to any information that may be needed to assess the proper functioning of the system of warranties and industry self-regulation. Where circumstances justify, that Community authority may require additional guarantees that an organisation is able to maintain a credible system.

(b) The appropriate Community authority shall report its assessment to the Commission on an annual basis.

(a) If the Commission has credible information that a listed organisation or a member thereof is infringing the provisions of this Article, it shall request an assessment of the situation by the Community authority of a Member State in which the organisation or its member is resident or established. Upon such request, the relevant Community authority shall promptly inquire into the matter and duly inform the Commission of its findings.

(b) If the Commission, on the basis of reports, assessments or other pertinent information, comes to the conclusion that a system of warranties and industry self-regulation does not function properly, and the issue has not been addressed adequately, the Commission shall take the necessary measures in accordance with the procedure referred to in Article 22(2).

CHAPTER V

TRANSIT

Article 18

Articles 4, 11, 12, and 14 shall not apply to rough diamonds which enter the Community territory or Greenland solely for the purposes of transit to a participant outside those territories, on condition that neither the original container in which rough diamonds are being transported nor the original accompanying certificate issued by a competent authority of a participant has been tampered with at entry into or exit from the Community territory or Greenland, and the transit purpose is clearly attested by the accompanying certificate.

CHAPTER VI

GENERAL PROVISIONS

Article 19

Article 20

On the basis of relevant Information provided to the Chair of the KP certification scheme and/or by participants, the Commission may amend the list of participants and their competent authorities.

Article 21

Article 22

The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at ten working days.

Article 23

The Committee referred to in Article 22 may examine any question concerning the application of this Regulation. Such questions may be raised either by the chairman or by a representative of a Member State or Greenland.

Article 24

Article 25

Information supplied in accordance with this Regulation shall be used only for the purposes for which it was provided.

Information which is by nature confidential or which is provided on a confidential basis shall be covered by the obligation of professional secrecy. It shall not be disclosed by the Commission without the express permission of the person providing it.

Communication of such information shall however be permitted where the Commission is obliged or authorised to do so, in particular in connection with legal proceedings. Such communication must take into account the legitimate interests of the person concerned that his or her business secrets should not be divulged.

This Article shall not preclude the disclosure of general information by the Commission. Such disclosure shall not be permitted if this is incompatible with the original purpose of such information.

In the event of a breach of confidentiality, the originator of the information shall be entitled to obtain that it be deleted, disregarded or rectified, as the case may be.

Article 26

Compliance with this Regulation does not discharge any natural or legal person from compliance, fully or partially, with any other obligation under other Community or national legislation.

Article 27

Each Member State shall determine the sanctions to be imposed where the provisions of this Regulation are infringed. Such sanctions shall be effective, proportionate and dissuasive and shall be capable of preventing those responsible for the infringement from obtaining any economic benefit from their action.

Pending the adoption, where necessary, of any legislation to this end, the sanctions to be imposed where the provisions of this Regulation are infringed shall, where relevant, be those determined by the Member States in order to give effect to Article 5 of Regulation (EC) No 303/2002.

Article 28

This Regulation shall apply:

(a) within the Community territory, including its airspace, or on board any aircraft or any vessel under the jurisdiction of a Member State;

(b) to any national of a Member State, and to any legal person, entity, or body which is incorporated or constituted under the law of a Member State.

Article 29

This Regulation shall be binding in its entirety and directly applicable in all Member States.

ANNEX I

PREAMBLE

PARTICIPANTS,

— RECOGNISING that the trade in conflict diamonds is a matter of serious international concern, which can be directly linked to the fuelling of armed conflict, the activities of rebel movements aimed at undermining or overthrowing legitimate governments, and the illicit traffic in, and proliferation of, armaments, especially small arms and light weapons;

— FURTHER RECOGNISING the devastating impact of conflicts fuelled by the trade in conflict diamonds on the peace, safety and security of people in affected countries and the systematic and gross human rights violations that have been perpetrated in such conflicts;

— NOTING the negative impact of such conflicts on regional stability and the obligations placed upon states by the United Nations Charter regarding the maintenance of international peace and security;

— BEARING IN MIND that urgent international action is imperative to prevent the problem of conflict diamonds from negatively affecting the trade in legitimate diamonds, which makes a critical contribution to the economies of many of the producing, processing, exporting and importing states, especially developing states;

— RECALLING all of the relevant resolutions of the United Nations Security Council under Chapter VII of the United Nations Charter, including the relevant provisions of Resolutions 1173 (1998), 1295 (2000), 1306 (2000), and 1343 (2001), and determined to contribute to and support the implementation of the measures provided for in these resolutions;

— HIGHLIGHTING the United Nations General Assembly Resolution 55/56 (2000) on the role of the trade in conflict diamonds in fuelling armed conflict, which called on the international community to give urgent and careful consideration to devising effective and pragmatic measures to address this problem;