Prohibits the importation of polished diamonds (including jewelry containing diamonds) into the United States unless the exporting country: (1) is implementing a system of controls on the export and import of rough diamonds, except such system shall not be required for countries that do not import rough diamonds; and (2) requires that its own imports of diamonds originate from countries that have implemented a system of controls on the export and import of rough diamonds.
Prohibits the Overseas Private Investment Corporation and the Export-Import Bank of the United States from engaging in certain transactions in connection with a project involving the mining, polishing or other processing, or sale of diamonds in a country that fails to meet the requirements of this Act.
Provides a waiver for the requirements of this Act.
Urges the President to negotiate an international agreement to eliminate trade in diamonds used to support conflict in the country or regions in which such diamonds are mined.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1084 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1084
To prohibit the importation into the United States of diamonds unless
the countries exporting the diamonds have in place a system of controls
on rough diamonds, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 21, 2001
Mr. Durbin (for himself, Mr. DeWine, and Mr. Feingold) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To prohibit the importation into the United States of diamonds unless
the countries exporting the diamonds have in place a system of controls
on rough 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 Diamonds Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Diamonds are being used by rebels and dictators 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 advocates, the diamond trade as
represented by the World Diamond Council, and the United States
Government recently began 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, acting under
chapter VII of the Charter of the United Nations, has
prohibited all states from importing diamonds from, and
exporting weapons to, certain countries affected by diamond-
related conflicts. Unfortunately, diamond smugglers continue
funding rebel movements, which has led in turn to regional
destabilization, arms proliferation, and other activities which
are a potential threat to the essential security interests of
the United States, and the United Nations sanctions have not
been sufficiently effective to achieve their goals. In order to
put an end to this emergency situation in international
relations, to maintain international peace and security, and to
protect its essential security interests, and pursuant to its
obligations under the United Nations Charter, the United States
must take action against this illicit trade and smuggling of
conflict diamonds.
(5) Articles XX and XXI of GATT 1994 allow WTO member
countries to take measures to deal with situations such as that
presented by the current trade in conflict diamonds without
violating their WTO obligations.
(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 20 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.
SEC. 3. DEFINITIONS.
In this Act:
(1) Diamonds.--The term ``diamonds'' means diamonds
classified under subheading 7102.31.00 or subheading 7102.39.00
of the Harmonized Tariff Schedule of the United States.
(2) GATT 1994.--The term ``GATT 1994'' means the General
Agreement on Tariffs and Trade annexed to the WTO Agreement.
(3) Polished diamonds.--The term ``polished diamonds''
means diamonds that are classified under subheading 7102.39.00
of the Harmonized Tariff Schedule of the United States.
(4) Rough diamonds.--The term ``rough diamonds'' means
diamonds that are unworked, or simply sawn, cleaved, or bruted,
classified under subheading 7102.3100 of the Harmonized Tariff
Schedule of the United States.
(5) 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.
(6) WTO agreement.--The term ``WTO Agreement'' means the
Agreement Establishing the World Trade Organization entered
into on April 15, 1994.
(7) World trade organization and wto.--The terms ``World
Trade Organization'' and ``WTO'' mean the organization
established pursuant to the WTO Agreement.
SEC. 4. REQUIREMENTS FOR THE IMPORTATION OF DIAMONDS.
(a) Requirements.--
(1) Rough diamonds.--Rough diamonds may not be imported
into the United States from a country unless the country
exporting the rough diamonds is implementing--
(A) a system of controls on the export from, and
import into, that country of rough diamonds that meets
the requirements of paragraph (2), consistent with
United Nations General Assembly Resolution 55/56
adopted on December 1, 2000, or consistent with an
international agreement which requires such controls
and to which the United States is a party; or
(B) a system of controls that the President
determines to be functionally equivalent to the system
of controls specified in subparagraph (A).
(2) System of controls.--The system of controls referred to
in paragraph (1)(A) shall include the following requirements:
(A) Rough diamonds, when exported from the country
in which they were extracted, shall be sealed in a
secure, transparent container or bag by appropriate
government officials of that country.
(B) The sealed container or bag described in
subparagraph (A) shall include a fully visible document
that--
(i) certifies the country from which the
rough diamonds were extracted;
(ii) records a unique export registration
number for, and the total carat weight of, the
rough diamonds in the container or bag; and
(iii) is issued by the government of that
country.
(C) The country from whose territory the rough
diamonds are first exported shall maintain at least the
information on exports of rough diamonds described in
subparagraph (B).
(D) Any country into whose territory the rough
diamonds are first imported prior to polishing or other
processing--
(i) shall permit importation of the rough
diamonds only in a container or bag described
in subparagraphs (A) and (B); and
(ii) shall verify, on the basis of
documentation provided to it by electronic or
other reliable means, the legitimacy of the
export document included in the sealed
container or bag in which the rough diamonds
were shipped, using the information maintained
by the country of export.
(E) Appropriate government authorities of countries
that import rough diamonds shall conduct reasonable
physical inspections of a sampling of the sealed
containers and bags of rough diamonds to ensure
compliance with the requirements of this paragraph.
(3) Polished diamonds.--Polished diamonds may not be
imported into the United States from a country unless the
country exporting the diamonds--
(A) is implementing a system of controls on the
export from, and import into, that country of rough
diamonds described in paragraph (1), except that
such system shall not be required for those countries that do not
import rough diamonds; and
(B) requires that its own imports of diamonds
originate from countries that have implemented a system
of controls on the export and import of rough diamonds
described in paragraph (1).
(4) Jewelry containing diamonds.--Jewelry containing
diamonds may not be imported into the United States from a
country unless the country exporting the jewelry--
(A) is implementing a system of controls on the
export and import of rough diamonds described in
paragraph (1), except that such system shall not be
required for those countries that do not import rough
diamonds; and
(B) requires that its own imports of diamonds
originate from countries that have implemented a system
of controls on the export and import of rough diamonds
described in paragraph (1).
(5) Exclusions.--
(A) In general.--The provisions of this subsection
do not apply to--
(i) jewelry containing diamonds imported by
or on behalf of a person for personal use and
accompanying a person upon entry into the
United States; or
(ii) diamonds or jewelry containing
diamonds, previously exported from the United
States and reimported by the same importer,
without having been advanced in value or
improved in condition by any process or other
means while abroad, if the importer declares
that the reimportation of the diamonds or
jewelry, as the case may be, satisfies the
requirements of this clause.
(B) Regulations.--The Secretary of the Treasury is
authorized to promulgate regulations to ensure that the
exclusions described in subparagraph (A) do not become
a means to evade the requirements made by this section.
(b) Monitoring.--The President shall ensure that any system of
controls described in subsection (a)(1) is monitored by appropriate
agencies of the United States.
(c) Presidential Advisory Commission.--
(1) Purpose.--The President shall appoint an advisory
commission the purpose of which shall be to make
recommendations to the President on the effectiveness of the
monitoring system under subsection (b), and on ways to improve
that monitoring system.
(2) Membership.--The advisory commission shall be composed
of 9 members, 2 of whom shall be representatives of private and
voluntary organizations, and 2 of whom shall be representatives
of the diamond industry. The remaining members may be appointed
from appropriate agencies of the United States and other
interested parties.
SEC. 5. ENFORCEMENT.
(a) In General.--Diamonds imported into the United States in
violation of section 4 are subject to seizure and forfeiture laws, and
all criminal and civil laws of the United States shall apply to the
same extent as any other violation of the customs and navigation laws
of the United States.
(b) Prohibiting Transactions in Certain Property.--
(1) In general.--The President may exercise the authorities
under the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.) to prohibit transactions involving any
property described in paragraph (2) or to prohibit any
transaction by a person subject to the jurisdiction of the
United States with respect to such property.
(2) Property covered.--Property described in this paragraph
is property owned or controlled by a person that exports
diamonds to the United States from a country that fails to meet
the requirements of section 4(a).
(3) Penalties.--The penalties provided in section 206 of
the International Emergency Economic Powers Act shall apply to
violations of licenses, orders, or regulations issued under
this subsection to the same extent as such penalties apply with
respect to violations under that Act.
(c) Proceeds From Fines and Forfeited Goods.--Notwithstanding any
other provision of law, the proceeds derived from fines imposed for
violations of section 4(a), and from the seizure and forfeiture of
goods imported in violation of section 4(a), shall, in addition to
amounts otherwise available for such purposes, be available only for--
(1) the Leahy War Victims Fund administered by the United
States Agency for International Development or any successor
program to assist victims of foreign wars; and
(2) grants under section 131 of the Foreign Assistance Act
of 1961 (22 U.S.C. 2152a).
SEC. 6. LIMITATIONS ON OPIC AND EXPORT-IMPORT BANK.
(a) OPIC.--The Overseas Private Investment Corporation may not
insure, reinsure, guarantee, or finance any investment in connection
with a project involving the mining, polishing or other processing, or
sale of diamonds in a country that fails to meet the requirements of
section 4(a).
(b) Export-Import Bank.--The Export-Import Bank of the United
States may not guarantee, insure, extend credit, or participate in an
extension of credit in connection with the export of any goods to a
country for use in an enterprise involving the mining, polishing or
other processing, or sale of diamonds in a country that fails to meet
the requirements of section 4(a).
SEC. 7. WAIVER AUTHORITY.
(a) Waiver Authority.--The President may at any time waive the
applicability of this Act with respect to a country for a period of not
more than 6 months if the President, before granting the waiver--
(1) determines that the country is cooperating because the
country--
(A) is making significant progress toward
concluding an international agreement such as the one
described in section 12; or
(B) is acting in good faith to establish and
enforce a unilateral certification system containing
the requirements described in section 4(a); and
(2) transmits that determination, with the reasons
therefor, to Congress.
(b) Evaluation Criteria.--Not later than 180 days after the date of
enactment of this Act, the President, in consultation with the heads of
appropriate Federal agencies, shall develop and publish criteria that
will be used to evaluate whether or not a country is a cooperating
country for purposes of subsection (a). Before adopting such criteria
in final form, the President shall provide for public notice and a
period for public comment on the criteria.
SEC. 8. ANNUAL REPORTS.
Not later than 6 months after the date of the enactment of this
Act, and not later than September 30 of each subsequent calendar year,
the President shall transmit to Congress a report--
(1) describing and evaluating the effectiveness of any
system of controls on trade in diamonds described in section
4(a)(1);
(2) identifying those countries that are implementing those
controls;
(3) identifying those countries that are not implementing
those controls, and describing the effects of that failure on
the trade in diamonds used to support conflict in the country
or regions in which the diamonds are extracted; and
(4) describing in detail technological developments that
allow--
(A) the determination of where a diamond was mined;
and
(B) the marking and tracking of rough and polished
diamonds.
SEC. 9. GAO REPORT.
Not later than 3 years after the date of enactment 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 of diamonds traded in violation of any
system of controls described in section 4(a)(1). The Comptroller
General shall include in the report any recommendations on any
modifications to this Act that may be necessary.
SEC. 10. STATUTORY CONSTRUCTION.
This Act may not be construed to apply to restrictions on the
importation of diamonds in effect on its date of enactment or to
diminish the authority of the President under the International
Emergency Economic Powers Act or any other Act to impose restrictions
on the importation of diamonds after such date.
SEC. 11. CONSISTENCY OF ACTIONS UNDER THIS ACT WITH THE WTO.
(a) Statutory Construction.--Nothing in this Act requires the
Secretary of the Treasury or the Commissioner of Customs to take any
action that would be a violation of United States obligations under the
agreements of the World Trade Organization (WTO), as determined in a
WTO dispute settlement proceeding.
(b) Sense of Congress.--It is the sense of Congress that, in the
event there is a determination in a WTO dispute settlement proceeding
that this Act, any part of this Act, or any action taken under this Act
is inconsistent with United States obligations under the WTO, the
United States will take such steps as are necessary to bring itself
into conformity with its WTO obligations.
SEC. 12. SENSE OF CONGRESS ON NEGOTIATION OF AN INTERNATIONAL
AGREEMENT.
It is the sense of Congress that the President should take the
necessary steps to negotiate an international agreement, working in
concert with the Kimberley Process referred to in section 2(6), to
eliminate the trade in diamonds used to support conflict in the country
or regions in which the diamonds are extracted. Such an agreement
should create an effective global certification system covering diamond
exporting and importing countries, and should include--
(1) the requirements described in section 4(a);
(2) a requirement that any country from whose territory
rough diamonds are exported publish annual reports disclosing
the names of all entities and individuals who hold mining
concessions, licenses to purchase rough diamonds, and licenses
to export rough diamonds, as well as the volume and value of
such diamonds exported categorized by country of importation;
and
(3) a requirement that any country into whose territory
rough diamonds are imported publish annual reports disclosing
the source by country of exportation of its diamond imports as
well as the volume and value of such diamonds for each such
country of exportation.
SEC. 13. SENSE OF CONGRESS ON IMPLEMENTATION OF THE SYSTEM OF CONTROLS.
It is the sense of Congress that companies involved in diamond
extraction and trade should make financial contributions to countries
seeking to implement any system of controls described in section
4(a)(1), if those countries would have financial difficulty
implementing that system of controls.
SEC. 14. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the President $5,000,000
for fiscal year 2002 to provide assistance to countries seeking to
implement any system of controls described in section 4(a)(1), if those
countries would have financial difficulty implementing that system of
controls.
SEC. 15. EFFECTIVE DATE.
This Act shall take effect 6 months after its date of enactment.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S6617-6618)
Read twice and referred to the Committee on Finance.
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