Legal provisions of COM(2002)455 - Implementation of the Kimberley Process certification scheme for the international trade in rough diamonds - Main contents

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dossier	COM(2002)455 - Implementation of the Kimberley Process certification scheme for the international trade in rough diamonds.
document	COM(2002)455
date	December 20, 2002

CHAPTER I - SUBJECT MATTER AND DEFINITIONS

Article 1

This Regulation sets up a Community system of certification and import and export controls for rough diamonds for the purposes of implementing the Kimberley Process certification scheme.

For the purposes of the certification scheme, the Community shall be considered as one entity without internal borders.

This Regulation does not prejudice or substitute any provisions in force relating to customs formalities and controls.

Article 2

For the purposes of this Regulation the following definitions shall apply:

(a) 'Kimberley Process' means the forum in which the participants have designed an international certification scheme for rough diamonds;

(b) 'Kimberley Process certification scheme' (hereinafter 'KP certification scheme') means the international certification scheme negotiated by the Kimberley Process as set out in Annex I;

(c) 'Participants' means participants in the KP certification scheme listed in Annex II;

(d) 'certificate' means a document duly issued and validated by a participant's competent authority identifying a shipment of rough diamonds as being in compliance with the requirements of the KP certification scheme;

(e) 'competent authority' means the authority designated by a participant to issue, validate or verify certificates;

(f) 'Community authority' means a competent authority designated by a Member State and listed in Annex III;

(g) 'Community certificate' means a certificate corresponding to the specimen in Annex IV and issued by a Community authority;

(h) 'conflict diamonds' means rough diamonds as defined under the KP Certification Scheme;

(i) 'rough diamond' means a diamond that is unworked or simply sawn, cleaved or bruted and falls under the Harmonised Commodity Description and Coding System 7102 10, 7102 21 and 7102 31 (hereinafter 'HS code');

(j) 'imports' means the physical entering or bringing into any part of the geographical territory of a participant;

(k) 'export' means the physical leaving or taking out of any part of the geographical territory of a participant;

(l) 'shipment' means one or more parcels;

(m) 'parcel' means one or more diamonds that are packed together;

(n) 'parcel of mixed origin' means a parcel that contains rough diamonds from two or more countries of origin;

(o) 'Community territory' means the territories of the Member States to which the Treaty is applicable, under the conditions laid down in that Treaty;

(p) 'Certified stock' means a stock of rough diamonds to which this Regulation applies, and whose location, volume and value, and changes therein, have been submitted to effective supervision of a Member State;

(q) 'Customs transit' means transit as provided for by Articles 91 to 97 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code(3).

CHAPTER II - IMPORT REGIME

Article 3

The import of rough diamonds into the Community shall be prohibited unless all of the following conditions are fulfilled:

(a) the rough diamonds are accompanied by a certificate validated by the competent authority of a participant;

(b) the rough diamonds are contained in tamper-resistant containers, and the seals applied at export by that participant are not broken;

(c) the certificate clearly identifies the consignment to which it refers.

Article 4

1. Containers and the corresponding certificates shall be submitted for verification, together and at the earliest opportunity, to a Community authority either in the Member State where they are imported or in the Member State for which they are destined, as indicated in accompanying documents.

2. In cases where rough diamonds are imported into a Member State where there is no Community authority, they shall be submitted to the appropriate Community authority in the Member State for which they are destined. If a Community authority exists neither in the importing Member State nor in the Member State of destination they shall be submitted to an appropriate Community authority in another Member State.

3. The Member State where the rough diamonds are imported shall ensure their submission to the appropriate Community authority provided for in paragraphs 1 and 2. Customs transit may be granted to that effect. If such customs transit is granted, the verification provided for by this Article shall be suspended until arrival at the appropriate Community authority.

4. The importer shall be responsible for the proper movement of the rough diamonds and the costs thereof.

5. A Community authority shall opt for either of the following methods to verify that the content of a container matches the particulars on the corresponding certificate:

(a) it will open each container with a view to such verification; or

(b) it will identify the containers to be opened with a view to such verification on the basis of a risk analysis or equivalent system that gives due consideration to rough diamond shipments.

6. A Community authority shall complete the verification without delay.

Article 5

1. If a Community authority establishes that the conditions in Article 3 are:

(a) fulfilled, it shall confirm this on the original certificate and provide the importer with an authenticated and forgery-resistant copy of that confirmed certificate. This confirmation procedure shall take place within 10 working days of the submission of the certificate;

(b) not fulfilled, it shall detain the shipment.

2. If a Community authority finds that the failure to fulfil the conditions is not made knowingly or intentionally or is the result of an action by another authority in the exercise of its proper duties, it may proceed with the confirmation and release the shipment, after the necessary remedial measures have been taken to ensure that the conditions are met.

3. A Community authority shall, within one month, inform the Commission and the competent authority of the participant that purportedly issued or validated the certificate for the shipment of any failure to fulfil the conditions.

Article 6

1. Until the date of applicability of the Articles referred to in Article 29(3), a Member State may certify stocks of rough diamonds that have been imported or are present in the Community territory before that date. After that date, rough diamonds from certified stocks shall be considered to have fulfilled the conditions laid down in Article 3.

2. In all other cases, a Community authority may issue a confirmation that it considers rough diamonds to have fulfilled the conditions of Article 3, if it has established that those diamonds were legally present in the Community at that date and have been so since.

Article 7

Notwithstanding the provisions of Articles 3, 4 and 5, a Community authority may allow the import of rough diamonds if the importer provides conclusive evidence that those diamonds were destined for import into the Community and were exported 5 working days or less before the date of applicability of the Articles referred to in Article 29(3).

In such cases, the Community authority concerned shall issue the importer with a confirmation of legal import, to the effect that those diamonds shall be considered to have fulfilled the conditions of Article 3.

Article 8

1. The Commission shall consult participants on the practical arrangements for providing the competent authority of the exporting participant that has validated a certificate with confirmation of imports into the Community territory.

2. On the basis of these consultations the Commission shall, in accordance with the procedure referred to in Article 22(2), lay down guidelines for such confirmation.

Article 9

The Commission shall provide all Community authorities with authenticated specimens of the participants' certificates, the names and other relevant details of the participants issuing and/or validating authorities, authenticated specimens of stamps and signatures attesting that a certificate has been legally issued or validated and any other relevant information received in respect of certificates.

Article 10

1. Community authorities shall provide the Commission with a monthly report on all certificates submitted for verification under Article 4.

For each certificate this report shall list at least:

(a) the unique certificate number,

(b) the name of the issuing and validating authorities,

(c) the date of issue and validation,

(d) the date of expiry of validity,

(e) the country of provenance,

(f) the country of origin, where known,

(g) the HS code(s),

(h) the carat weight,

(i) the value,

(j) the verifying Community authority,

(k) the date of verification.

The Commission may, in accordance with the procedure referred to in Article 22(2), determine the format of this report in order to facilitate monitoring of the certification scheme's working.

2. The Community authority shall keep the originals of certificates provided for under Article 3(a) submitted for verification for at least three years. It shall provide the Commission or persons or bodies designated by the Commission with access to these original certificates in particular with a view to answering questions raised within the framework of the KP certification scheme.

CHAPTER III - EXPORT REGIME

Article 11

The export from the Community of rough diamonds shall be prohibited unless both of the following conditions are fulfilled:

(a) the rough diamonds are accompanied by a corresponding Community certificate issued and validated by a Community authority;

(b) the rough diamonds are contained in tamper-resistant containers sealed in accordance with Article 12.

Article 12

1. The Community authority may issue a Community certificate to an exporter when it has established that:

(a) the exporter has provided conclusive evidence that the rough diamonds for which a certificate is being requested were lawfully imported in accordance with the provisions of Article 3;

(b) the other information requested on the certificate is correct;

(c) the rough diamonds are effectively destined for arrival in the territory of a participant, and

(d) the rough diamonds are to be transported in a tamper-resistant container.

2. A Community authority shall not validate a Community certificate until it has verified that the content of the container matches the particulars on the corresponding certificate and that the tamper-resistant container containing the rough diamonds has subsequently been sealed on the responsibility of that authority.

3. A Community authority shall opt for either of the following methods to verify that the content of a container matches the particulars thereon on the certificate:

(a) it will verify the content of each container; or

(b) it will identify the containers, the content of which shall be verified, on the basis of a risk analysis or equivalent system that gives due consideration to rough diamond shipments.

4. The Community authority shall provide the exporter with an authenticated forgery-resistant copy of the Community certificate it has validated. The exporter shall keep any copy accessible for at least three years.

5. The Community certificate shall be valid for export for no more than two months from the date of issue. If the rough diamonds are not exported within this period, the Community certificate shall be returned to the issuing Community authority.

Article 13

If an exporter is a member of a diamond organisation listed in Annex V, the Community authority may accept as conclusive evidence of lawful import into the Community a signed declaration by the exporter to that effect. Such a declaration shall contain at least the information to be given in an invoice under Article 17(2)(a)(ii).

Article 14

1. If a Community authority establishes that a shipment of rough diamonds, for which a Community certificate is requested, does not fulfil the conditions of Articles 11, 12, or 13, that authority shall detain the shipment.

2. If a Community authority finds that the failure to fulfil the conditions is not made knowingly or intentionally or is the result of an action by another authority in the exercise of its proper duties, it may release the shipment and proceed with the issuing and validation of a Community Certificate, after the necessary remedial measures have been taken to ensure that the conditions are met.

3. The Community authority shall, within one month, inform the Commission and the competent authority of the participant that purportedly issued or validated the certificate for the shipment of any failure to fulfil the conditions.

Article 15

1. Community authorities shall provide the Commission with a monthly report on all Community certificates issued and validated by them.

For each certificate this report shall list at least:

(a) the unique certificate number,

(b) the name of the issuing and validating authorities,

(c) the date of issue and validation,

(d) the date of expiry of validity,

(e) the country of provenance,

(f) the country of origin, where known,

(g) the HS code(s),

(h) the carat weight and value.

In accordance with the procedure referred to in Article 22(2), the Commission may determine the format of the report in order to facilitate monitoring of the certification scheme's working.

2. Community authorities shall keep for at least three years the authenticated copies provided for under Article 12(4) as well as all information received from an exporter to justify the issue and validation of a Community certificate.

They shall provide the Commission or persons or bodies designated by the Commission with access to those authenticated copies and this information, in particular with a view to answering questions raised within the framework of the KP certification scheme.

Article 16

1. The Commission shall consult participants on the practical arrangements for obtaining confirmation of imports of rough diamonds exported from the Community covered by a certificate validated by the Community authority.

2. On the basis of these consultations the Commission shall, in accordance with the procedure referred to in Article 22(2), lay down guidelines for such confirmation.

CHAPTER IV - INDUSTRY SELF-REGULATION

Article 17

1. Organisations representing traders in rough diamonds which have established a system of warranties and industry self-regulation for the purposes of implementing the KP Certification Scheme may apply to the Commission for listing in Annex V directly or through the appropriate Community authority.

2. When applying for listing, an organisation shall:

(a) provide conclusive evidence that adopted rules and regulations whereby its members dealing in rough diamonds, whether natural or legal persons, undertake that they will, at the latest from the date of applicability of the Articles referred to in Article 29(3):

(i) sell only diamonds purchased from legitimate sources in compliance with the provisions of relevant United Nations Security Council Resolutions and of the Kimberley Process Certification Scheme and guarantee in writing on the invoice accompanying each sale of rough diamonds that, on the basis of their personal knowledge and/or written warranties provided by the supplier of such rough diamonds, the rough diamonds sold are therefore not conflict diamonds;

(ii) see that each sale of rough diamonds is accompanied by an invoice containing the said signed guarantee unequivocally identifying the seller and buyer and their registered offices, containing the VAT identification number of the seller, where applicable, the quantity/weight and qualification of the goods sold, the value of the transaction and the date of delivery;

(iii) not buy rough diamonds from suspect or unknown sources of supply and/or rough diamonds originating in non-participants in the KP certification scheme;

(iv) not buy rough diamonds from any source found, after legally binding due process, to have violated government laws and regulations concerning the trade in conflict diamonds;

(v) not buy rough diamonds in, or from, any region that is the subject of an advisory notice from a governmental or KP certification scheme authority to the effect that conflict diamonds are emanating from, or are available for sale in, that region;

(vi) not knowingly buy, sell or assist others in buying or selling conflict diamonds;

(vii) ensure that all employees buying or selling rough diamonds within the diamond trade are fully informed of trade resolutions and government regulations restricting the trade in conflict diamonds;

(viii) create and maintain for at least three years records of invoices received from suppliers and issued to customers;

(ix) instruct an independent auditor to certify that these records have been created and maintained accurately and either that it has identified no transactions which failed to comply with the undertakings referred to in (i) to (viii) or that any transaction which failed to comply with such undertakings has been duly reported to the appropriate Community authority;

and

(b) provide conclusive evidence that is has adopted rules and regulations which oblige the organisation:

(i) to expel any member found, after a due process inquiry by the organisation itself, to have seriously violated the abovementioned undertakings; and

(ii) to publicise that member's expulsion and notify the Commission thereof;

(iii) to make known to all its members all governmental and KP certification scheme laws, regulations and guidelines regarding conflict diamonds and the names of any natural or legal person found guilty, after legally binding due process, of violating these laws and regulations;

and

(c) provide the Commission and the appropriate Community authority with a complete list of all its members dealing in rough diamonds, including full names, addresses, location and other information which will contribute to avoiding mistaken identities.

3. Organisations covered by this Article shall immediately notify the Commission and the Community authority of a Member State in which they are resident or established of all changes in their membership subsequent to the application for listing.

4. In accordance with the procedure referred to in Article 22(2), the Commission shall list in Annex V each organisation that fulfils the requirements of this Article. It shall notify all Community authorities of the names and other relevant particulars of the members of listed organisations and any changes therein.

5. (a) A listed organisation or a member thereof shall provide the relevant Community authority with access to any information that may be needed to assess the proper functioning of the system of warranties and industry self-regulation. Where circumstances justify, that Community authority may require additional guarantees that an organisation is able to maintain a credible system.

(b) The appropriate Community authority shall report its assessment to the Commission on an annual basis.

6. If, in the course of monitoring the proper functioning of the system, a Community authority in a Member State obtains credible information that a listed organisation covered by this Article and established or resident in that Member State, or a member thereof established or resident in that Member State, is infringing the provisions of this Article, it shall inquire into the matter to verify whether the provisions of this Article have effectively been infringed.

7. (a) If the Commission has credible information that a listed organisation or a member thereof is infringing the provisions of this Article, it shall request an assessment of the situation by the Community authority of a Member State in which the organisation or its member is resident or established. Upon such request, the relevant Community authority shall promptly inquire into the matter and duly inform the Commission of its findings.

(b) If the Commission, on the basis of reports, assessments or other pertinent information, comes to the conclusion that a system of warranties and industry self-regulation does not function properly, and the issue has not been addressed adequately, the Commission shall take the necessary measures in accordance with the procedure referred to in Article 22(2).

8. If an inquiry leads to the conclusion that an organisation is infringing the provisions of this Article, the Community authority of a Member State in which that organisation is resident or established will notify the Commission thereof without delay. In turn, the Commission, in accordance with the procedure referred to in Article 22(2), shall take the appropriate measures with a view to removing that organisation from the list in Annex V.

9. If a listed organisation or one or more of its members are established or resident in a Member State that has not designated a Community authority for the purposes of this Article, the Commission shall be the Community authority for that organisation or those members.

10. Organisations or their members covered by this Article acting in the territory of a participant other than the Community shall be considered to have complied with the provisions of this Article if they comply with the rules and regulations that this participant has laid down for the purpose of implementing the Kimberley Process Certification Scheme.

CHAPTER V - TRANSIT

Article 18

Articles 4, 11, 12, and 14 shall not apply to rough diamonds which enter the Community territory solely for the purposes of transit to a participant other than the Community, on condition that neither the original container in which rough diamonds are being transported nor the original accompanying certificate issued by a competent authority of a participant have been tampered with at entry into and exit from the Community territory and the transit purpose is clearly attested by the accompanying certificate.

CHAPTER VI - GENERAL PROVISIONS

Article 19

1. Member States may designate one or more authorities in their territory as Community authority and may attribute different tasks to them.

2. Member States designating a Community authority shall provide the Commission with the information showing that their designated Community authorities can reliably, timely, effectively and adequately fulfil the tasks required by this Regulation.

3. Member States may limit the number of points where the formalities provided for in this Regulation can be completed. They shall notify the Commission thereof. Based on the information provided under paragraphs 1 and 2 and in accordance with the procedure referred to in Article 22(2), the Commission shall maintain in Annex III a list of Community authorities, their location and the tasks entrusted to them.

4. Community authorities may ask an economic operator to pay a fee for the production, issue and/or validation of a certificate and for a physical inspection in accordance with Articles 4 and 14. Under no circumstances shall the amount of that fee exceed the costs incurred by that competent authority for the operation concerned. No levies or similar duties shall be charged in relation to such operations.

5. Member States shall notify the Commission of the option they choose under Articles 4(5) and 12(3) or of subsequent changes.

6. The Commission may amend the specifications of the Community certificate with a view to improving its security, processing and functionality for the purposes of the KP certification scheme.

Article 20

On the basis of the relevant information from the chair of the Kimberley Process and/or participants, the Commission may amend the list of participants and the competent authorities they have designated to issue and validate their certificates in Annex II.

Article 21

1. The Community shall be a participant in the Kimberley Process certification scheme.

2. The Commission, which represents the Community in the Kimberley Process certification scheme, shall aim to ensure optimal implementation of the KP certification scheme, in particular through cooperation with participants. To this end, the Commission shall, in particular, exchange information with participants on international trade in rough diamonds and, where appropriate, cooperate in monitoring activities and in the settlement of any disputes that may arise.

Article 22

1. In the performance of its duties under Articles 8, 10, 15, 16, 17 and 19, the Commission shall be assisted by a Committee (hereinafter referred to as 'the Committee').

2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at ten working days.

3. The Committee shall establish its rules of procedure.

Article 23

The Committee referred to in Article 22 may examine any question concerning the application of this Regulation. Such questions may be raised either by the chairman or by a representative of a Member State.

Article 24

1. Any natural or legal person providing services directly or indirectly related to the activities covered by Articles 3, 4, 6, 7, 11, 12, 13, 17 or 18 shall exercise due diligence for establishing that the activities for which it provides services comply with the provisions of this Regulation.

2. The participation, knowingly and intentionally, in activities, the object or effect of which is, directly or indirectly, to circumvent the provisions of this Regulation shall be prohibited.

3. The Commission shall be notified of any information suggesting that the provisions of this Regulation are being, or have been, circumvented.

Article 25

Information supplied in accordance with this Regulation shall be used only for the purposes for which it was provided.

Information which is by nature confidential or which is provided on a confidential basis shall be covered by the obligation of professional secrecy. It shall not be disclosed by the Commission without the express permission of the person providing it.

Communication of such information shall however be permitted where the Commission is obliged or authorised to do so, in particular in connection with legal proceedings. Such communication must take into account the legitimate interests of the person concerned that his or her business secrets should not be divulged.

This Article shall not preclude the disclosure of general information by the Commission. Such disclosure shall not be permitted if this is incompatible with the original purpose of such information.

In the event of a breach of confidentiality, the originator of the information shall be entitled to obtain that it be deleted, disregarded or rectified, as the case may be.

Article 26

Compliance with this Regulation does not discharge any natural or legal person from compliance, fully or partially, with any other obligation under other Community or national legislation.

Article 27

Each Member State shall determine the sanctions to be imposed where the provisions of this Regulation are infringed. Such sanctions shall be effective, proportionate and dissuasive and shall be capable of preventing those responsible for the infringement from obtaining any economic benefit from their action.

Pending the adoption, where necessary, of any legislation to this end, the sanctions to be imposed where the provisions of this Regulation are infringed shall, where relevant, be those determined by the Member States in order to give effect to Article 5 of Regulation (EC) No 303/2002.

Article 28

This Regulation shall apply:

(a) within the Community territory, including its airspace, or on board any aircraft or any vessel under the jurisdiction of a Member State;

(b) to any national of a Member State, and to any legal person, entity, or body which is incorporated or constituted under the law of a Member State.

Article 29

1. This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities.

2. The Commission shall report annually or at any other time as necessary to the Council on the implementation of this Regulation and the need for a review or repeal of the Regulation.

3. The application of Articles 3, 4, 5, 10, 11, 12, 13, 14, 15 and 18 shall be suspended until the Council decides to apply these Articles on the basis of a proposal from the Commission.

This Regulation shall be binding in its entirety and directly applicable in all Member States.