Diamonds Dealers Club To Hold Meeting on New US Trade Rules

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(Rapaport…October 24, 2004) US organizations the Diamond Dealers Club and the Diamond Manufacturers and Importers Association of America (DMIA) are to hold a special program next month in New York about new US regulations for the shipment of rough diamonds.

In a letter to its members, the DMIA said representatives from the US State Department, customs and other government agencies will be available to answer questions at the free session, which will take place November 9.

Last month, the Treasury Department’s Office of Foreign Asset Control issued the final regulations, which incorporated many of the provisions of the interim rules that were published in August 2003. The final rules included significant changes, most of which became effective immediately.

The regulations prohibit the shipment of rough diamonds between non-participants in the Kimberly Process. The shipment of rough diamonds between the US and Kimberley Process participants is permitted only if handled in accordance with KP standards, practices and procedures.

The penalties for breaking the regulations include fines of up to $10,000 per violation. Those convicted of willfully breaking the rules can be fined up to $50,000 or receive a prison sentence of up to ten years, or both. Corporate officers, directors and agents may also be held responsible for violations and can be fined, imprisoned or both.

The DMIA said the most significant changes in the rules are as follows:

The ultimate consignee is responsible for retaining the original KP certificate accompanying an importation into the US. The certificate must be maintained by the consignee for a period of five years from the date of the importation.

The ultimate consignee is now required to report the receipt of each shipment of rough diamonds to the relevant foreign exporting authority within 15 calendar days of the shipment arriving in the US. This provision is effective immediately.

Customs brokers, importers and filers can electronically file import data by submitting the identification number of the KP Certificate accompanying the shipment through the Automated Broker Interface (ABI) system. For non-ABI entries, merchants must indicate the KP Certificate number on the Customs form 7501 at each entry line. The DMIA believes that this provision will be effective November 1.

With respect to shipments of mixed country of origin rough diamonds, the merchant does not need to list each country of origin, although the country of origin on the certificate must be filled in with asterisks.

The full text of the final rules can be found at: http://www.treas.gov/offices/enforcement/ofac/legal/regs/fr69_56936.pdf

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