EU adopts ban on conflict diamonds

The European Commission today adopted a proposal for a Council Regulation concerning a Community Certification scheme for the international trade in rough diamonds. The purpose of the certification scheme is to prevent "conflict" or "blood" diamonds from fuelling armed conflicts, such as those in Angola, Sierra Leone, and the DR Congo, thereby contributing to the EU's policy on conflict prevention (see http://europa.eu.int/comm/external_relations/cpcm/cp.htm for further details). An effective ban will deprive rebel movements of significant finances and will therefore be an important contribution to peace and stability. The scheme also aims to prevent conflict diamonds from discrediting the legitimate market for rough diamonds, which makes an important economic contribution, not least to certain developing countries in Africa. Less than 4 % of global diamond production is regarded as 'conflict diamonds', while a number of developing countries that are major producers and processors of diamonds depend heavily on the legitimate diamond industry for their economic and social development. The underlying certification scheme has been developed in the 'Kimberley Process', with the active participation of the EU.

The proposal from the Commission envisages a set of controls that build on control mechanisms currently existing in some Member States, improves on them and creates a system of controls that will apply uniformly throughout the EU, and will protect the legitimate diamonds trade. In addition to physical controls by public authorities on imports and exports where necessary, the proposal sets out the conditions for an effective system of self-regulation by the European diamonds trade as well as mechanisms to ensure that the EC authorities that may be entrusted with the control tasks are fully capable of carrying them out.

Since the European scheme is part of a network of such schemes set up by the participants in the Kimberley Process, this will ensure that the effectiveness of European controls is not undermined by those controls remaining isolated. Eventually all world trade in diamonds should be regulated under these schemes. In particular, the implementation of the certification scheme by all participants of the Kimberley Process will do away with the declarations of provenance that presently provide the greatest loophole for conflict diamonds legally to enter the market.

Finally, the Commission proposal takes on board a number of recommendations of the Kimberley Process that go beyond the minimum requirement agreed by the participants in this process. For this reason, the European certification scheme will be an advanced one, and the Commission expects that its proposal will stimulate other participants to come up with similar legislation.

The Commission proposal, which is based on Article 133 of the EC Treaty, has been developed following consultation with Member States and many other interested parties within the Community. It will be submitted to the Council for adoption. The Commission hopes that this will be rapid so as to enable the Commission and the Member States to prepare in good time for the definitive implementation of the scheme by the time this becomes a legally binding obligation for all participants in the Kimberley Process. This date will be set by the participants of the Kimberley Process when they meet at ministerial level in Interlaken (Switzerland) on 5 November 2002.

Kimberley Process

The Kimberley Process, chaired by South Africa had its origins in the decision of Southern African countries to take action to stop the flow of "conflict" diamonds to the markets, while at the same time protecting the legitimate diamond industry. The Kimberley Process involves more than 30 governments, the European Community, the diamond industry and civil society and has been establishing minimum acceptable international standards for national certification schemes relating to trade in rough diamonds. It is hoped that the certification scheme will stem the flow of rough diamonds from rebel-held conflict areas, in support of the existing UN Security Council sanctions, thereby contributing substantially to peace efforts.

On 29 October 2001 the Council authorised the Commission to negotiate an agreement establishing an international certification scheme for rough diamonds and to conduct these negotiations on behalf of the European Community.

On 29 November 2001 the Kimberley Process completed the first phase of its work. Ministers from participating states meeting in Botswana declared that the detailed proposals for the international certification scheme for rough diamonds proposed by representatives from government, the diamond industry and civil society, provided a good basis for the envisaged certification scheme. Participants are currently focusing their attention on implementing the scheme nationally. It is envisaged that the scheme will become fully operational by the end of 2002.

The certification scheme is basically an export and import control regime. Producer countries will control the production and transport of rough diamonds from mine to point of export. Shipments of rough diamonds will be sealed in tamper-resistant containers and a Kimberley Process certificate issued for each shipment. Re-exporting countries will ensure that only rough diamonds exported/imported under a Kimberly Process certificate enter the chain of transactions from import to export. The diamond industry will introduce a system of self regulation to support government efforts.

Importing countries will inspect the seal and the certificate at the time of import. Imports of rough diamonds not accompanied by a certificate issued by a Kimberly Process participant will be prohibited, as will exports to non-participants. It is expected that all countries producing and trading rough diamonds will participate. Participants will set up a mutual system to monitor the internal controls underpinning the issue of certificates.

The United Nations General Assembly welcomed the certification scheme developed by the Kimberley Process in Resolution 56/263 of 13 March 2002.


Further information is available at:

http://www.kimberleyprocess.com/

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• EU Presidency Statement - The role of diamonds in conflict (13/3/2002)