[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 760 Introduced in Senate (IS)]






108th CONGRESS
  1st Session
                                 S. 760

To implement effective measures to stop trade in conflict diamonds, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 1, 2003

 Mr. Grassley (for himself, Mr. Baucus, Mr. DeWine, Mr. Durbin, Mr. 
        Gregg, Mr. Bingaman, Mr. Feingold, Ms. Snowe, Mr. Rockefeller, 
        Mr. Santorum, and Mr. Leahy) introduced the following bill; 
        which was read twice and referred to the Committee on FinanceYY

_______________________________________________________________________

                                 A BILL


 
To implement effective measures to stop trade in conflict diamonds, and 
                          for other purposes.

    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 ``Clean Diamond Trade Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Funds derived from the sale of rough diamonds are being 
        used by rebels and state actors to finance military activities, 
        overthrow legitimate governments, subvert international efforts 
        to promote peace and stability, and commit horrifying 
        atrocities against unarmed civilians. During the past decade, 
        more than 6,500,000 people from Sierra Leone, Angola, and the 
        Democratic Republic of the Congo have been driven from their 
        homes by wars waged in large part for control of diamond mining 
        areas. A million of these are refugees eking out a miserable 
        existence in neighboring countries, and tens of thousands have 
        fled to the United States. Approximately 3,700,000 people have 
        died during these wars.
            (2) The countries caught in this fighting are home to 
        nearly 70,000,000 people whose societies have been torn apart 
        not only by fighting but also by terrible human rights 
        violations.
            (3) Human rights and humanitarian advocates, the diamond 
        trade as represented by the World Diamond Council, and the 
        United States Government have been working to block the trade 
        in conflict diamonds. Their efforts have helped to build a 
        consensus that action is urgently needed to end the trade in 
        conflict diamonds.
            (4) The United Nations Security Council has acted at 
        various times under chapter VII of the Charter of the United 
        Nations to address threats to international peace and security 
        posed by conflicts linked to diamonds. Through these actions, 
        it has prohibited all states from exporting weapons to certain 
        countries affected by such conflicts. It has further required 
        all states to prohibit the direct and indirect import of rough 
        diamonds from Sierra Leone unless the diamonds are controlled 
        under specified certificate of origin regimes and to prohibit 
        absolutely the direct and indirect import of rough diamonds 
        from Liberia.
            (5) In response, the United States implemented sanctions 
        restricting the importation of rough diamonds from Sierra Leone 
        to those diamonds accompanied by specified certificates of 
        origin and fully prohibiting the importation of rough diamonds 
        from Liberia. The United States is now taking further action 
        against trade in conflict diamonds.
            (6) Without effective action to eliminate trade in conflict 
        diamonds, the trade in legitimate diamonds faces the threat of 
        a consumer backlash that could damage the economies of 
        countries not involved in the trade in conflict diamonds and 
        penalize members of the legitimate trade and the people they 
        employ. To prevent that, South Africa and more than 30 other 
        countries are involved in working, through the ``Kimberley 
        Process'', toward devising a solution to this problem. As the 
        consumer of a majority of the world's supply of diamonds, the 
        United States has an obligation to help sever the link between 
        diamonds and conflict and press for implementation of an 
        effective solution.
            (7) Failure to curtail the trade in conflict diamonds or to 
        differentiate between the trade in conflict diamonds and the 
        trade in legitimate diamonds could have a severe negative 
        impact on the legitimate diamond trade in countries such as 
        Botswana, Namibia, South Africa, and Tanzania.
            (8) Initiatives of the United States seek to resolve the 
        regional conflicts in sub-Saharan Africa which facilitate the 
        trade in conflict diamonds.
            (9) The Interlaken Declaration on the Kimberley Process 
        Certification Scheme for Rough Diamonds of November 5, 2002, 
        states that Participants will ensure that measures taken to 
        implement the Kimberley Process Certification Scheme for Rough 
        Diamonds will be consistent with international trade rules.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Controlled through the kimberley process certification 
        scheme.--An importation or exportation of rough diamonds is 
        ``controlled through the Kimberley Process Certification 
        Scheme'' if it is an importation from the territory of a 
        Participant or exportation to the territory of a Participant of 
        rough diamonds that is--
                    (A) carried out in accordance with the Kimberley 
                Process Certification Scheme, as set forth in 
                regulations promulgated by the President; or
                    (B) controlled under a system determined by the 
                President to meet substantially the standards, 
                practices, and procedures of the Kimberley Process 
                Certification Scheme.
            (2) Exporting authority.--The term ``exporting authority'' 
        means 1 or more entities designated by a Participant from whose 
        territory a shipment of rough diamonds is being exported as 
        having the authority to validate the Kimberley Process 
        Certificate.
            (3) Importing authority.--The term ``importing authority'' 
        means 1 or more entities designated by a Participant into whose 
        territory a shipment of rough diamonds is imported as having 
        the authority to enforce the laws and regulations of the 
        Participant regulating imports, including the verification of 
the Kimberley Process Certificate accompanying the shipment.
            (4) Kimberley process certificate.--The term ``Kimberley 
        Process Certificate'' means a forgery resistant document of a 
        Participant that demonstrates that an importation or 
        exportation of rough diamonds has been controlled through the 
        Kimberley Process Certification Scheme and contains the minimum 
        elements set forth in Annex I of the Kimberley Process 
        Certification Scheme.
            (5) Kimberley process certification scheme.--The term 
        ``Kimberley Process Certification Scheme'' means those 
        standards, practices, and procedures of the international 
        certification scheme for rough diamonds presented in the 
        document entitled ``Kimberley Process Certification Scheme'' 
        referred to in the Interlaken Declaration on the Kimberley 
        Process Certification Scheme for Rough Diamonds of November 5, 
        2002.
            (6) Participant.--The term ``Participant'' means a state, 
        customs territory, or regional economic integration 
        organization identified by the Secretary of State.
            (7) Person.--The term ``person'' means an individual or 
        entity.
            (8) Rough diamond.--The term ``rough diamond'' means any 
        diamond that is unworked or simply sawn, cleaved, or bruted and 
        classifiable under subheading 7102.10, 7102.21, or 7102.31 of 
        the Harmonized Tariff Schedule of the United States.
            (9) United states.--The term ``United States'', when used 
        in the geographic sense, means the several States, the District 
        of Columbia, and any commonwealth, territory, or possession of 
        the United States.
            (10) United states person.--The term ``United States 
        person'' means--
                    (A) any United States citizen or any alien admitted 
                for permanent residence into the United States;
                    (B) any entity organized under the laws of the 
                United States or any jurisdiction within the United 
                States (including its foreign branches); and
                    (C) any person in the United States.

SEC. 4. MEASURES FOR THE IMPORTATION AND EXPORTATION OF ROUGH DIAMONDS.

    (a) Prohibition.--The President shall prohibit the importation 
into, or exportation from, the United States of any rough diamond, from 
whatever source, that has not been controlled through the Kimberley 
Process Certification Scheme.
    (b) Waiver.--The President may waive the requirements set forth in 
subsection (a) with respect to a particular country for periods of not 
more than 1 year each, if, with respect to each such waiver--
            (1) the President determines and reports to Congress that 
        such country is taking effective steps to implement the 
        Kimberley Process Certification Scheme; or
            (2) the President determines that the waiver is in the 
        national interests of the United States, and reports such 
        determination to Congress, together with the reasons therefor.

SEC. 5. REGULATORY AND OTHER AUTHORITY.

    (a) In General.--The President is authorized to and shall as 
necessary issue such proclamations, regulations, licenses, and orders, 
and conduct such investigations, as may be necessary to carry out this 
Act.
    (b) Recordkeeping.--Any United States person seeking to export from 
or import into the United States any rough diamonds shall keep a full 
record of, in the form of reports or otherwise, complete information 
relating to any act or transaction to which any prohibition imposed 
under section 4(a) applies. The President may require such person to 
furnish such information under oath, including the production of books 
of account, records, contracts, letters, memoranda, or other papers, in 
the custody or control of such person.
    (c) Oversight.--The President shall require the appropriate 
Government agency to conduct annual reviews of the standards, 
practices, and procedures of any entity in the United States that 
issues Kimberley Process Certificates for the exportation from the 
United States of rough diamonds to determine whether such standards, 
practices, and procedures are in accordance with the Kimberley Process 
Certification Scheme. The President shall transmit to Congress a report 
on each annual review under this subsection.

SEC. 6. IMPORTING AND EXPORTING AUTHORITIES.

    (a) In the United States.--For purposes of this Act--
            (1) the importing authority shall be the United States 
        Bureau of Customs and Border Protection or, in the case of a 
        territory or possession of the United States with its own 
        customs administration, analogous officials; and
            (2) the exporting authority shall be the Bureau of the 
        Census.
    (b) Of Other Countries.--The Secretary of State shall publish in 
the Federal Register a list of all Participants, and all exporting 
authorities and importing authorities of Participants. The Secretary 
shall update the list as necessary.

SEC. 7. STATEMENT OF POLICY.

    Congress supports the policy that the President take appropriate 
steps to promote and facilitate the adoption by the international 
community of the Kimberley Process Certification Scheme implemented 
under this Act.

SEC. 8. ENFORCEMENT.

    (a) In General.--In addition to the enforcement provisions set 
forth in subsection (b)--
            (1) a civil penalty of not to exceed $10,000 may be imposed 
        on any person who violates, or attempts to violate, any 
        license, order, or regulation issued under this Act; and
            (2) whoever willfully violates, or willfully attempts to 
        violate, any license, order, or regulation issued under this 
        Act shall, upon conviction, be fined not more than $50,000, or, 
        if a natural person, may be imprisoned for not more than 10 
        years, or both; and any officer, director, or agent of any 
        corporation who willfully participates in such violation may be 
        punished by a like fine, imprisonment, or both.
    (b) Import Violations.--The civil and criminal customs laws and 
penalities of the United States, including seizure and forfeiture, that 
apply to merchandise imported in violation of such laws shall apply 
with respect to rough diamonds imported in violation of this Act.

SEC. 9. TECHNICAL ASSISTANCE.

    The President may direct the appropriate agencies of the United 
States Government to make available technical assistance to countries 
seeking to implement the Kimberley Process Certification Scheme.

SEC. 10. SENSE OF CONGRESS.

    (a) Ongoing Process.--It is the sense of Congress that the 
Kimberley Process Certification Scheme, officially launched on January 
1, 2003, is an ongoing process. The President should work with 
Participants to strengthen the Kimberley Process Certification Scheme 
through the adoption of measures for the sharing of statistics on the 
production of and trade in rough diamonds, and for monitoring the 
effectiveness of the Kimberley Process Certification Scheme in stemming 
trade in diamonds the importation or exportation of which is not 
controlled through the Kimberley Process Certification Scheme.
    (b) Statistics and Reporting.--It is the sense of Congress that 
under Annex III to the Kimberley Process Certification Scheme, 
Participants recognized that reliable and comparable data on the 
international trade in rough diamonds are an essential tool for the 
effective implementation of the Kimberley Process Certification Scheme. 
Therefore, the executive branch should continue to--
            (1) keep and publish statistics on imports and exports of 
        rough diamonds under subheadings 7102.10.00, 7102.21, and 
        7102.31.00 of the Harmonized Tariff Schedule of the United 
        States;
            (2) make these statistics available for analysis by 
        interested parties and by Participants; and
            (3) take a leadership role in negotiating a standardized 
        methodology among Participants for reporting statistics on 
        imports and exports of rough diamonds.
    (c) Kimberley Process Implementation Coordinating Committee.--It is 
the sense of Congress that the President should establish a Kimberley 
Process Implementation Coordinating Committee to coordinate the 
implementation of this Act. The Committee should be composed of the 
following individuals or their designee:
            (1) The Secretary of the Treasury and the Secretary of 
        State, who shall be co-chairpersons.
            (2) The Secretary of Commerce.
            (3) The United States Trade Representative.
            (4) The Secretary of Homeland Security.
            (5) A representative of any other agency the President 
        deems appropriate.

SEC. 11. REPORTS.

    (a) Annual Reports.--Not later than 1 year after the date of 
enactment of this Act and every 12 months thereafter for such period as 
this Act is in effect, the President shall transmit to Congress a 
report--
            (1) describing actions taken by countries that have 
        exported rough diamonds to the United States during the 
        preceding 12-month period to control the exportation of the 
        diamonds through the Kimberley Process Certification Scheme;
            (2) describing whether there is statistical information or 
        other evidence that would indicate efforts to circumvent the 
        Kimberley Process Certification Scheme, including cutting rough 
        diamonds for the purpose of circumventing the Kimberley Process 
        Certification Scheme; and
            (3) identifying each country that, during the preceding 12-
        month period, exported rough diamonds to the United States and 
        was exporting rough diamonds not controlled through the 
        Kimberley Process Certification Scheme, if the failure to do so 
        has significantly increased the likelihood that those diamonds 
        not so controlled are being imported into the United States.
    (b) Semiannual Reports.--For each country identified in subsection 
(a)(2), the President, during such period as this Act is in effect, 
shall, every 6 months after the initial report in which the country was 
identified, transmit to Congress a report that explains what actions 
have been taken by the United States or such country since the previous 
report to ensure that diamonds the exportation of which was not 
controlled through the Kimberley Process Certification Scheme are not 
being imported from that country into the United States. The 
requirement to issue a semiannual report with respect to a country 
under this subsection shall remain in effect until such time as the 
country is controlling the importation and exportation of rough 
diamonds through the Kimberley Process Certification Scheme.

SEC. 12. GAO REPORT.

    Not later than 24 months after the effective date of this Act, the 
Comptroller General of the United States shall transmit a report to 
Congress on the effectiveness of the provisions of this Act in 
preventing the importation or exportation of rough diamonds that is 
prohibited under section 4. The Comptroller General shall include in 
the report any recommendations on any modifications to this Act that 
may be necessary.

SEC. 13. EFFECTIVE DATE.

    This Act shall take effect on the date on which the President 
certifies to Congress that--
            (1) an applicable waiver that has been granted by the World 
        Trade Organization is in effect; or
            (2) an applicable decision in a resolution adopted by the 
        United Nations Security Council pursuant to Chapter VII of the 
        Charter of the United Nations is in effect.
This Act shall thereafter remain in effect during those periods in 
which, as certified by the President to Congress, an applicable waiver 
or decision referred to in paragraph (1) or (2) is in effect.
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