SUPPORTING MATERIALS COURTESY OF JEWELERS OF AMERICA (JA)

# # #

More work is required, however, and the cooperation of all segments of the industry is needed as the campaign enters a critical stage. At the same time, it is vital that consumers and the news media alike have an accurate picture of the issue and of the industry’s commitment to resolve it. Because this is a complex and emotional issue of concern to many around the world, there is misinformation that is adverse to the industry in circulation.

Everyone involved in the industry should be equally aware of the serious efforts being made to eliminate the flow of conflict diamonds into legitimate markets and of recent events. Following are highlights.

• The World Diamond Congress, comprised of representation from the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, acknowledged the industry’s obligation concerning conflict diamonds during their 2000 Annual Meeting. The Congress agreed on strong principles as the foundation of an international regulatory system to cleanse the world supply of conflict diamonds.

• These principles envision the establishment of an international "certificate of origin" system to protect the legitimate supply chain from being polluted by rough diamonds mined in conflict zones. The system is to employ tamper-proof containers, counterfeit-proof certificates to accompany each shipment to processing centers and electronic databases in which each packet is recorded. WDC’s proposal, A System for International Rough Diamond Export and Import Controls, appears on the Council’s website: www.worlddiamondcouncil.com.

• With Sierra Leone the focal point of attention last year, the Belgian High Diamond Council (HRD) led the way in establishing a certificate of origin system to track shipments from government-controlled areas of Sierra Leone to Antwerp. That system is now in operation on a pilot basis, facilitating legitimate exports from Sierra Leone to Belgium. A similar system is also currently in operation between Angola and Antwerp.

• The World Diamond Council recognizes that the United States – the world’s largest diamond retail market – has a special leadership role to play in bringing the conflict diamonds issue to resolution. During their January Members Meeting and International Conference in London, WDC approved a proposal for model legislation to be presented for consideration in the U.S. Congress. In an effort to find common ground with organizations supporting an alternative bill, the WDC proposal was subsequently refined and in April, Senator Judd Gregg (R-NH) introduced The Conflict Diamonds Act of 2001 (S 787), which builds on the WDC model and has the industry’s active support.

Some have criticized the pace of progress in establishing a practical and enforceable system as too slow. Impatience is understandable, given the humanitarian aspects of the issue. The industry, working through the World Diamond Council, is doing everything it can to accelerate progress. However, many other parties – including governments and international human rights organizations – have a role to play, as well as a legitimate interest in assuring that the system implemented will be appropriate to the need.

Last year, legislative proposals surfaced on Capitol Hill that had worthy objectives, but would have had adverse impact on the legitimate diamond trade. This year, an updated version of one of these bills has been introduced. While it resembles S 787 in some important ways, it also contains some significant differences. The WDC, working in partnership with other industry firms, organizations and individuals too numerous to mention, seeks to reconcile these differences in a constructive way.

The World Diamond Council believes that as the process goes forward, members of the industry should keep informed and be willing to speak out in support of the industry’s position when circumstances warrant. This packet contains a selection of supplementary materials developed by and for the Jewelers of America that are helpful in that regard. They are provided herein for the educational value of the information they contain that is of benefit to all concerned. In addition, a substantial archive of Council news, general press coverage, speeches and other important issue-related information is available on the World Diamond Council website (www.worlddiamondcouncil.com). WDC invites you to review these items and welcomes your inquiries and comments on all aspects of the conflict diamond issue.

By Mr. GREGG:

S 787. A bill 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; to the Committee on Finance.

MR. GREGG:

Mr. President, the purpose of the Conflict Diamonds Act of 2001 is to eliminate the illegal diamond trade that has fueled violent conflicts in the African nations of Sierra Leone, Liberia, Congo, Angola, Ivory Coast, and Burkina Faso. The sale of illicit diamonds has allowed criminal gangs like the Revolutionary United Front in Sierra Leone to buy arms and supplies in an effort to expand their influence. In the process, they have inflicted unspeakable pain, including torture and amputation, on the innocent people they encounter. The Conflict Diamonds Act of 2001 bans the importation into the United

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

(Senate–April 26, 2001)

[Page: S4004]

States of diamonds from countries that fail to observe an effective diamond control system. Under this legislation, no diamond that has ever been in the possession of the RUF or any other rebel group will be allowed to enter the United States. This includes diamonds that pass through another country for cutting or setting. The

Conflict Diamonds Act of 2001 authorizes the President of the United States to ban the importation of diamonds and diamond jewelry from countries if he believes that shipments from those countries violate the legislation’s intent. Those who knowingly violate the import ban would be subject to criminal and civil penalties under existing U.S. Customs law. The Customs Service would be authorized to seize illicit shipments. The import ban would take effect six months after enactment, regardless of the status of negotiations for an international agreement. I ask unanimous consent that the text of the bill be printed in the RECORD.

On April 26, 2001, Senator Judd Gregg (R-NH) introduced the "Conflict Diamonds Act of 2001" (S787) into the Senate and the text appears below. The bill has been referred to the Committee on Finance.

A BILL

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.

# # #

CONFLICT DIAMONDS ACT OF 2001

The bill expresses Congressional recognition of the adverse effects of conflict diamond trade; supports the U.N. Security Council resolutions on Angola, Sierra Leone, and Liberia, as well as the General Assembly resolution of December 1, 2000; and expresses the sense of Congress that domestic legislation is needed to make the U.N. prohibitions on conflict diamond trade more effective. However, Congress also finds that no law should be enacted that "would impede legitimate diamond trade, which is of great economic importance to developing countries in Africa, or diminish confidence in the integrity of the legitimate diamond industry."

The bill defines the terms "diamond," "rough diamond," and "conflict diamond" in order to ensure that, when enacted, affected persons will clearly understand what actions are permitted and what actions are prohibited.

Subsection (a) incorporates into U.S. law the current prohibitions in the U.N. Security Council resolutions on the importation of rough diamonds from Sierra Leone, Angola, and Liberia that have not been certified by the internationally recognized governments of Sierra Leone and Angola as originating in conflict free areas. Diamond jewelry that is produced in these countries may also not be imported, unless certified by the governments of Sierra Leone and Angola.

Subsection (b) provides that no person may import any diamond into the United States from a country that has not implemented a system of rough diamond controls or which is not "cooperating" in efforts to implement such a system. Importers will be free to import diamonds from any country that has: (1) signed an international treaty establishing rough diamond controls; (2) unilaterally implemented an equivalent control system; or (3) is "cooperating" in efforts to implement a control system. Subsection (b) also imposes an import ban on diamonds from any country that is the subject of a future U.N. resolution similar to those adopted for Sierra Leone, Angola, and Liberia.

Recognizing that it is extremely difficult to foresee all of the ways in which persons may seek to evade the import ban on conflict diamonds, the bill provides the President with additional authority to address any attempted "circumvention" of the U.N. Security Council resolutions. This authority will allow the President to prohibit imports of diamonds and diamond jewelry from such country as he determines necessary if he has reasonable grounds to believe that the prohibition is necessary to carry out any U.N. resolution on conflict diamonds.

The objective of Sections 103 and 104 is to prohibit the importation of conflict diamonds and jewelry containing conflict diamonds into the United States.

The Secretary of the Treasury is authorized to adopt regulations that will implement the legislation. In order to provide certainty to importers, the bill requires the Secretary of the Treasury to publish a list of each country that: (a) is a signatory to an international agreement on rough diamond controls; (b) has implemented a satisfactory unilateral system of rough diamond controls, or (c) is found to be a "cooperating country" that is taking steps to prohibit trade in conflict diamonds.

Importers will be free to import diamonds from each country identified on this list, which the Secretary must initially issue by no later than six months after the date of enactment and then periodically update. For a country to retain "cooperating country" status for more than six months after its initial designation, the Secretary of the Treasury must provide Congress an explanation of why this is necessary to achieve the purposes of the Act.

Importers will also be entitled to rely on the country of origin marking that is required under U.S. law. However, nothing in this Act shall be construed to override an importer’s duty to exercise reasonable care.

Subsection (a) provides that existing penalty provisions in the customs laws will apply to each importation of merchandise found to violate this Act. Importers will be able to contest any alleged penalties through the administrative and judicial procedures that the United States Customs Service now uses for other programs.

Subsection (b) authorizes the Customs Service to seize merchandise that is imported in violation of this Act.

Subsection (c) provides that any penalty assessed by the Customs Service may be reviewed by the United States Court of International Trade, located in New York, where the matter will be heard de novo.

Subsection (d) directs that proceeds derived from penalties and seizures be available only to the War Victims Fund administered by the Agency for International Development or as grants under Section 131 of the Foreign Assistance Act of 1961.

The President is required to report to Congress within 180 days of enactment of the Act and annually thereafter as to the measures taken to implement Title I and their effectiveness in stopping trade in conflict diamonds.

This section sets forth the reasons why the most effective way to control trade in conflict diamonds is through an international agreement that establishes a global system of rough diamond controls. It then endorses the international efforts taken so far to eliminate trade in conflict diamonds and suggests that proposals made to date should be incorporated into the agreement.

Congress expresses its sense that the President should seek to conclude as soon as possible an international agreement to end trade in conflict diamonds. The system implementing the agreement shall be transparent and subject to independent verification.

This section specifies the five required elements of an "effective global certification system for rough diamonds" that countries that either export or import rough diamonds should adopt, either through treaty or unilaterally. An importer may import diamonds from a country that is a signatory to this agreement or has adopted a unilateral system that contains these five elements. These five elements include: 1) rough diamonds must be sealed in a secure, transparent container or bag by appropriate government officials from the country where the rough diamonds were mined; 2) the sealed container must include a fully visible government document certifying the country of extraction and a unique export registration number for the rough diamonds; 3) a database containing information about each shipment must be established by the exporting country; 4) importing countries of rough diamonds may only allow importation of rough diamonds sealed in a transparent container, accompanied by the required documentation, and verified with the database of the exporting country; and 5) provisions shall be made for physical inspection of the sealed containers by appropriate authorities.

The President is required to consult periodically with Congress on his negotiating proposals and progress in the negotiations.

The President is required to report within 180 days of enactment and annually thereafter on the progress made toward implementing an effective global system of rough diamond controls.

The President must submit to Congress a draft bill implementing the provisions of any international agreement within 60 calendar days after the United States enters into it.

The import prohibition in Title I will take effect six months after the date of enactment. Title II takes effect immediately.

Such sums as are necessary are authorized to be appropriated.

If any provision of the Act is invalidated, Congress intends that the remainder of the Act not be affected.

The General Accounting Office shall report to the Congress within three years on the effectiveness of the Act in stopping trade in conflict diamonds.

# # #

Hall Bill (HR 918) and Gregg Bill (S 787)

# # #

COURTESY OF

Jewelers of America

With increased attention to the question of "conflict diamonds," the Jewelers of America, Inc. has prepared a summary of background on the issue and our action regarding it. We take this problem very seriously and are acting vigorously to bar tainted stones from the inventories of American jewelers.

is a stone extracted from areas of Africa controlled by military forces in rebellion against legitimate governments. The rebels smuggle rough stones – those not yet cut and polished – into other countries. From there, they may end up in overseas processing centers, where they may be mingled with the much larger number of stones that have come through the legitimate distribution system.

Expert analysis has shown that the proportion of the worldwide supply that can be characterized as conflict diamonds is very small. However, the revenue from illicit traffic has subsidized arms purchases by rebel factions, and these transactions can sustain continued fighting. The most dramatic recent examples of this phenomenon are the Democratic Republic of the Congo and Sierra Leone, where many civilians have suffered because of the fighting. Angola has had similar problems.

is very clear. We abhor the role played by conflict diamonds in perpetuating combat in Africa and we have a zero tolerance policy towards them. Jewelers of America, the national trade association for over 10,000 American jewelers, is doing everything feasible to bar conflict diamonds from entering the American market. We are also actively cooperating with other interested parties – governments, international organizations and members of our industry – to cleanse the worldwide supply of this contraband.

Most American jewelry retailer stores do not operate in Africa and do not purchase directly from mining operators anywhere. Rather American jewelers acquire stones that have been cut and polished in processing centers.

to achieve additional progress. It is important to note that concerned parties have been focusing more intently on the problem and taking steps in the right direction. The United Nations Security Council recently acted to block exports from Liberia, which had laundered conflict diamonds from Sierra Leone. Last July the Security Council approved a resolution imposing a boycott on diamonds from Sierra Leone, except those regulated by the government. Two years ago a similar measure covered diamonds from Angola. The governments of several stable African countries – nations that regulate diamond exports appropriately – have agreed on principals of a system to monitor the supply chain so as to exclude conflict diamonds. On December 1, the U.N. General Assembly unanimously approved this plan. Implementation of it is proceeding rapidly. In recent days the interested parties met in Brussels to work on technical aspects of the system.

All sectors of the diamond industry have been actively participating in this work. The industry created a new entity, the World Diamond Council (WDC), to combat conflict diamonds. The council is working with the governments of exporting and importing nations toward this end. Jewelers of America is playing a leadership role in the council’s activities. The council in January 2001 proposed legislation aimed at making a strong regulatory system a reality this year. Senator Judd Gregg of New Hampshire recently introduced the Conflict Diamonds Act of 2001, (S 787) which builds on the WDC model. The Gregg bill represents an effective, practical approach to the problem. We are urging prompt and serious consideration of it on Capitol Hill.

Jewelers of America is committed to this constructive process and is doing everything within its means to make it successful. At the present time no retailer can say, with 100 percent certainty, that it holds not a single conflict diamond in its inventory. The limitations of current technology make it impossible to identify the country of origin of a stone already cut and polished (which is how retailers obtain them).

What is needed is a credible, practical tracking system that accurately establishes the region of origin of batches of rough diamonds. This system would rely on monitored packaging and rigorous documentation of shipments – each recorded in an electronic data base – as they move through the supply chain. With sufficient international cooperation, this goal can be reached and the story of conflict diamonds can become an historical footnote rather than a current anxiety.

###

Jewelers of America, like other responsible segments of the diamond industry, is appalled by the role of conflict diamonds in the strife that afflicts some parts of Africa. More importantly, we are actively participating in a comprehensive campaign to rid the world supply of the small quantity of tainted stones that are the problem.

As the national trade association for the American retail jewelry industry, we urge our members to implement a policy of refusing to do no business with any supplier dealing in conflict diamonds. But much broader action is necessary, involving all elements of the industry as well as the governments of exporting and importing countries and international organizations.

To that end we play a leadership role in the World Diamond Council (WDC) to put in place an effective, workable system to identify and track shipments of rough stones from their place of origin through the processing and distribution stages. It will then be possible to assure customers that conflict diamonds have been excised from the trade.

Significant progress is being made. The WDC has sponsored the drafting of model legislation aimed at creating an international monitoring system. Senator Judd Gregg of New Hampshire recently introduced the Conflict Diamonds Act of 2001, (S. 787) which builds on the WDC model. Senator Gregg’s bill provides an international solution for what is clearly an international problem. We believe that this proposal is the most effective and the most easily enforced solution to end the illicit trade.

Meanwhile, the private sector has agreed on a set of firm principles both to protect the supply and to ostracize anyone found to be dealing in contraband. The WDC was created by the industry last summer for the sole purpose of translating these principles into practice.

The governments of exporting and importing countries are also cooperating, as is the United Nations. On December 1, 2000, the U.N. General Assembly unanimously approved a resolution that envisions the same regulatory regime sought by the WDC. Because conflict diamonds constitute a complex, multinational problem, an effective solution demands that all the interested parties work in tandem. That is now occurring.

It will take some additional time to accomplish this important mission. But we are confident that it will succeed and we are committed to doing everything in our power to see that it does.

Jewelers of America, Inc. is the national trade association for retail jewelers. With more than 10,000 members nationally, JA also works locally through its 42 state and regional affiliates. JA advocates high ethical standards, promotes professional business and leadership skills, and enhances its members’ profitability by offering education, certification, marketing and cost-saving programs.