To prohibit the importation of diamonds from countries that have not become signatories to an international agreement establishing a certification system for exports and imports of rough diamonds or that have not unilaterally implemented a certification system meeting the standards set forth herein.

April 26, 2001

Mr. GREGG introduced the following bill; which was referred to the Committee on Finance

To prohibit the importation of diamonds from countries that have not become signatories to an international agreement establishing a certification system for exports and imports of rough diamonds or that have not unilaterally implemented a certification system meeting the standards set forth herein.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Conflict Diamonds Act of 2001'.

TITLE I--PROHIBITION ON IMPORTATION OF CONFLICT DIAMONDS

SEC. 101. FINDINGS.

The Congress finds that:

(1) The use of funds from illegitimate diamond trade to support conflicts in Africa has had devastating effects on the peoples of the regions involved in those conflicts.

(2) U.N. Security Council Resolution 1173 of June 12, 1998, requires the United States and all other U.N. members to take the necessary measures to prohibit the direct or indirect importation from Angola to their territory of all diamonds that are not controlled through the Certificate of Origin regime of the Government of Unity and National Reconciliation (GURN).

(3) U.N. Security Council Resolution 1306 of July 5, 2000, requires the United States and all other U.N. members to take the necessary measures to prohibit the direct or indirect importation of all rough diamonds from Sierra Leone into their territory that are not controlled by the Government of Sierra Leone through its Certificate of Origin regime.

(4) U.N. Security Council Resolution 1344 of March 8, 2001, requires the United States and all other U.N. members to take the necessary measures to prevent the direct or indirect import of all rough diamonds from Liberia, whether or not such diamonds originated in Liberia.

(5) Effective compliance with U.N. Security Council Resolutions 1173, 1306, and 1344 is necessary to eliminate trade in conflict diamonds.

(6) Although the President of the United States has issued Executive Orders to implement Resolution 1173 and Resolution 1306, additional measures are needed to ensure compliance with, and prevent circumvention of, those resolutions.

(7) Further measures are needed to prevent rough diamonds originating in other rebel-controlled conflict areas from entering the global stream of commerce in which legitimate diamonds are sold.

(8) The resolution of the United Nations General Assembly approved on December 1, 2000, provides important guidance on devising effective and pragmatic measures to address the problem of conflict diamonds.

(9) Since legitimate diamond trade is of great economic importance to developing countries in Africa, no law should be enacted, nor regulation or other measure implemented, that would impede legitimate diamond trade or diminish confidence in the integrity of the legitimate diamond industry.

SEC. 102. DEFINITIONS.

(a) The term `diamond' means a natural mineral consisting of essentially pure carbon crystallized in the isometric system with a hardness of 10 on the Mohs scale, a specific gravity of approximately 3.52, and a refractive index of 2.42.

(b) The term `rough diamond' means a diamond that is unworked or simply sawn, cleaved or bruted, as described in Harmonized Tariff Schedule of the United States subheading 7102.31.0000.

(c) The term `conflict diamond' means a diamond that has at any time been in the possession of any person belonging to or associated with armed insurgents, rebel forces, or any other movement using violence against civilians or internationally recognized governments.

SEC. 103. RESTRICTIONS ON THE IMPORTATION OF DIAMONDS.

(a) No person may enter into the customs territory of the United States or aid or abet an attempt to enter any diamond, including any diamond set in jewelry, that has been mined in, or mined and set in, and exported directly from, the Republic of Sierra Leone, the Republic of Angola, or the Republic of Liberia except for a diamond or a diamond set in jewelry--

(1) the country of origin of which has been certified as the Republic of Sierra Leone by the internationally recognized government of that country, in accordance with United Nations Security Council Resolution 1306 of July 5, 2000; or

(2) the country of origin of which has been certified as the Republic of Angola by the internationally recognized government of that country, in accordance with United Nations Security Council Resolution 1173 of June 12, 1998.

(b) No person may enter into the customs territory of the United States or aid or abet an attempt to enter any diamond directly from a country that: is subject to a United Nations Security Council resolution similar to those identified in subsection (a) or that is not a signatory to an international agreement that establishes a certification system for exports and imports of rough diamonds, that has not unilaterally implemented such a system, or that is not a `cooperating country' as defined in subsection (c) of section 105 of this Act.

SEC. 104. PROHIBITION OF OTHER IMPORTS TO PREVENT CIRCUMVENTION OF U.N. RESOLUTIONS.

The President of the United States is authorized to prohibit the importation of diamonds or diamond jewelry exported from any country except for rough diamonds whose country of origin has been certified as either the Republic of Angola or the Republic of Sierra Leone under the Certificate of Origin regimes described in section 103 (a) (1) or (2), if there are reasonable grounds to believe that such prohibition is necessary to carry out U.N. Security Council Resolution 1173, 1306, or 1344, or any other Resolution banning the exportation or importation of conflict diamonds.

SEC. 105. IMPLEMENTING MEASURES.

(a) The Secretary of the Treasury of the United States is authorized to make such rules and regulations as may be necessary to carry out the provisions of this Act. The public will be notified and given an opportunity of at least 30 days to comment on all proposed rules and regulations before they take effect.

(b) These regulations will provide that an importer is entitled to rely on the country of origin marking that is required under 19 U.S.C. Sec. 1304. However, nothing in this Act shall be construed to override an importer's duty to exercise reasonable care.

(c) No later than six months after the date of enactment of this Act, the Secretary of the Treasury will issue a list of countries that are signatories to the international agreement described in title II, have unilaterally implemented a certification system containing the elements described in subsection (b) of section 203, or are found to be `cooperating' countries as defined in this subsection. The Secretary of the Treasury will revise and update this list as necessary. For purposes of this subsection, the Secretary of the Treasury will find that a country is `cooperating' if it is acting in good faith to establish and enforce a unilateral certification system meeting the standards described in subsection (b) of section 203 or taking action to ensure that it is not facilitating trade in conflict diamonds. The Secretary of the Treasury, in consultation with appropriate agencies, shall develop and publish criteria that will be used to evaluate whether a country will be deemed a cooperating country. These criteria will be subject to public notice and comment before adoption in final form.

(d) The Secretary of the Treasury may extend cooperating country status for more than six months after the initial designation, but shall provide to Congress an explanation of the reasons for why such an extension is necessary.

(e) The President of the United States shall ensure that implementation of and compliance with title I of this Act is monitored by appropriate agencies or by an independent body.

SEC. 106. PENALTIES FOR NONCOMPLIANCE.

(a) CIVIL AND CRIMINAL PENALTIES- Any person who enters or introduces into the commerce of the United States, attempts to enter or introduce, or aids or abets an attempt to enter or introduce, merchandise in violation of title I of this Act or the implementing regulations for title I will be subject to civil and criminal penalties in effect under the customs laws of the United States, as set forth in title 19 of the United States Code. The same administrative procedures and defenses that apply under title 19 of the United States Code will apply to penalties that are sought to be assessed under this subsection.

(b) SEIZURE- If the Customs Service has reasonable cause to believe that a person has violated the provisions of subsection (a) of this section and that seizure is essential to prevent the introduction of merchandise into the customs territory of the United States whose importation is prohibited by title I of this Act, then such merchandise may be seized. Within a reasonable time after any such seizure is made, the Customs Service will issue to the person concerned a written statement containing the reasons for the seizure. A person may seek relief from seizure under the procedures and standards prescribed in 19 U.S.C. Sec. 1618 and the Customs Service regulations that implement that provision.

(c) COURT OF INTERNATIONAL TRADE PROCEEDINGS-

(1) JURISDICTION- Section 1582 of title 28, United States Code, is amended by amending paragraph (1) to read as follows:

`(1) to recover a civil penalty under section 592, 593A, 641(b)(6), 641(d)(2)(A), 704(i)(2), or 734(i)(2) of the Tariff Act of 1930.'.

(2) STANDARD OF REVIEW- Notwithstanding any other provision of law, in any proceeding commenced by the United States in the Court of International Trade for the recovery of any monetary penalty under this section, all issues, including the amount of any penalty, shall be tried de novo.

(d) PROCEEDS FROM FINES AND SEIZED GOODS- The proceeds derived from penalties and seizures under title I of this Act will, in addition to amounts otherwise available for such purposes, be available only for programs to assist the victims of conflicts involving illicitly traded diamonds.

SEC. 107. REPORT TO CONGRESS.

The President of the United States will report to Congress no later than 180 days after enactment of this Act and annually thereafter on the implementing measures taken to carry out the provisions of this title and their effectiveness in stopping imports of conflict diamonds into the United States.

TITLE II--NEGOTIATION OF AN INTERNATIONAL AGREEMENT TO ELIMINATE TRADE IN CONFLICT DIAMONDS

SEC. 201. FINDINGS.

The Congress finds that:

(1) The most effective and desirable means of eliminating international trade in conflict diamonds is through international cooperative efforts involving governments, the private sector, civil society, and appropriate international organizations.

(2) The initiatives of the world diamond industry, as reflected in the Resolution of the World Federation of Diamond Bourses and the International Diamond Manufacturers Association in Antwerp on July 19, 2000, as well as the efforts of the South African-led Working Group on African Diamonds and the World Diamond Council in developing proposals for a global certification system for rough diamonds, are important efforts at international cooperation and may provide effective mechanisms that could be incorporated in an international agreement to eliminate trade in conflict diamonds.

(3) Eliminating imports of rough diamonds from countries where conflict diamonds are mined, transshipped, or subsequently shipped into countries where cutting and polishing occur is the most effective way to eliminate trade in conflict diamonds.

SEC. 202. SENSE OF CONGRESS--NEGOTIATION OF INTERNATIONAL AGREEMENT.

It is the sense of the Congress that the President should engage in negotiations on and seek to conclude an international agreement to eliminate trade in conflict diamonds as soon as possible. The system implementing this agreement shall be transparent and subject to independent verification and monitoring. Participants in such an agreement should include all countries that either export or import diamonds or diamond jewelry.

SEC. 203. OVERALL NEGOTIATING OBJECTIVE OF THE UNITED STATES AND ESSENTIAL ELEMENTS OF AN INTERNATIONAL AGREEMENT.

(a) The overall negotiating objective of the United States is to establish an effective global certification system covering the major exporting and importing countries of rough diamonds that will eliminate trade in conflict diamonds.

(b) The elements of an effective global certification system for rough diamonds that the United States should seek in its negotiations are as follows:

(1) Rough diamonds, when exported from the country in which they were extracted, must be sealed in a secure, transparent container or bag by appropriate government officials of that country.

(2) The sealed container described in paragraph (1) must include a fully visible government document certifying the country of extraction and recording a unique export registration number and the total carat weight of the rough diamonds enclosed.

(3) A database containing information described in paragraph (2) must be established for rough diamond exports in each exporting country, including countries engaged in the re-export of rough diamonds.

(4) No country may allow importation of rough diamonds unless they are sealed in a secure, transparent container that includes a fully visible document that states a unique export registration number for such container and the total carat weight of the rough diamonds enclosed. The legitimacy of such document must be verified by electronic or other reliable means with the database maintained in the country of export.

(5) Provisions shall be made for physical inspection of sealed containers of rough diamonds by appropriate authorities.

(6) Diamonds may be freely imported and exported from a country that implements and enforces a rough diamond certification system that contains the elements specified in paragraphs (1) through (5), or a system that is its functional equivalent, provided that the country of extraction need only be specified when rough diamonds are exported from such country and need not be specified when rough diamonds are exported from a country that implements and enforces such a rough diamond certification system.

SEC. 204. CONSULTATIONS WITH CONGRESS.

The President of the United States shall consult periodically with Congress in developing and negotiating proposals for an international agreement as described in sections 202 and 203.

SEC. 205. REPORT TO CONGRESS.

The President of the United States will provide a written report to Congress no later than 180 days after enactment of this Act and annually thereafter on the progress made towards concluding an international agreement and the progress of the signatories to that agreement in implementing it, including which countries are not implementing it and the effects of their actions on trade in conflict diamonds. Each report shall also describe any technological advances that permit determining a diamond's origin, marking a diamond, and tracking it.

SEC. 206. IMPLEMENTING LEGISLATION.

The President of the United States will submit to Congress a draft bill implementing the provisions of any agreement that is negotiated no later than 60 calendar days after entering into that agreement.

SEC. 207. EFFECTIVE DATE.

Title I will apply with respect to articles entered, or withdrawn from warehouse for consumption, six months after the date of enactment of this Act. Title II will take effect on the date of enactment of this Act.

TITLE III--OTHER PROVISIONS

SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

Such sums as may be necessary are hereby authorized to be appropriated to implement the provisions of this Act, including such sums as are necessary to assist the governments of Sierra Leone and Angola to establish and maintain a diamond certification system.

SEC. 302. SEVERABILITY.

If any provision of this Act or the application of such provision to any person or circumstance is held invalid, it is the intent of Congress that the remainder of this Act and application of such provision to other persons or circumstances will not be affected thereby.

SEC. 303. GAO REPORT.

The General Accounting Office shall report to Congress on the effectiveness of this Act no later than three years after the date of enactment of this Act.

END