European Commission “Relaxes” Diamond Trading Regulations – And Old Stocks Will Not Be Turned Into “Conflict Goods”

The latest still confidential and not yet published draft of the European Commission’s regulations for rough diamond imports and exports are definitely more “industry-friendly” and certainly more workable than the initial draft published in August. 

The requirement that each member state should have a diamond authority has been relaxed: states can limit the number of point of entries through which diamonds can be imported and if it does not readily have diamond experts available, the goods can also be certified by the authorities of another member state.

Diamonds also can’t be so quickly “impounded or confiscated” or automatically be returned to the country of origins. A new article 28 says, “Where it is found that violations [of relevant articles] have taken place, knowingly and intentionally, Member States shall ensure that the rough diamonds concerned shall be impounded immediately and confiscated subsequently.” This certainly provides protection to those who unwittingly and in good-faith imported rough diamonds which did not meet the Kimberley certification criteria.

The problematic issues in the original draft referred to “old stocks”, which, if not exported within a 3 months transition period, would become “conflict rough”. This has been changed. A new article 6 reads: “…a member state may certify rough diamonds that have been imported or are present in the community territory before that date ……and such rough diamonds shall be considered to have fulfilled the [Kimberley process] conditions.”  

For further clarity, the national authority may always “issue a confirmation that it considers rough diamonds to have fulfilled the conditions [of the Kimberley Process] if it has established that those diamonds were legally present in the Community at and since the [date of commencement of the new system.]”  

The European Commission will carefully monitor the implementation of the system. Member states must report to the Commission and annual reports will review the system. The industry’s self-regulation will also be checked and, if found lacking, the EC keeps the right to interfere. 

The new 26 articles have not yet been approved. They were formulated at the initiative of the Danish Chair of the EC and the British and Belgian Foreign Offices have played a major role in formulating regulations, which have a chance to actually work.

But it must be stressed that we are quoting from a confidential draft – we still don’t know what regulation will eventually be adopted. But we’ll keep you posted.