INTRODUCTION - In the Interlaken Declaration of November 5, 2002,
representatives of the United States and 47 other countries announced the launch
of the Kimberley Process Certification Scheme for rough diamonds ("KPCS").
Countries participating in the KPCS (“Participants”) are expected to prohibit
the importation of rough diamonds from, and the exportation of rough diamonds
to, non-Participants and to require that shipments of rough diamonds from or to
a Participant be controlled through the KPCS.

On April 25, 2003, the President signed the Clean Diamond Trade Act (Pub. L.
108-19) (the "Act").  The Act requires the President to take steps to implement
the KPCS in the United States.  On July 29, 2003, the President issued Executive
Order 13312, “Implementing the Clean Diamond Trade Act.”

PROHIBITED TRANSACTIONS - Executive Order 13312 prohibits, subject to certain
waiver authorities set forth in section 4(b) of the Act, the importation into,
and exportation from, the United States of any rough diamond, from whatever
source, not controlled through the KPCS.  (Pursuant to section 4(b) of the Act,
the Secretary of State, in certain limited circumstances, may waive these
prohibitions with respect to a particular country for periods of not more than
one year each.)  This means that shipments of rough diamonds between the United
States and countries that do not participate in the KPCS generally are
prohibited, and shipments between the United States and Participants are
permitted only if they are “controlled through the KPCS,” i.e., handled in
accordance with the standards, practices, and procedures of the KPCS, as
summarized below. Executive Order 13312 also prohibits any transaction by a
United States person or within the United States that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions of the order, as well as any conspiracy formed to violate any of
the prohibitions of the order.

The Department of State is responsible for identifying all the Participants
eligible for trade in rough diamonds (and their importing and exporting
authorities) and periodically publishes an up-to-date list of Participants in
the Federal Register. The list of Participants may be amended at any time as
determined appropriate by the Secretary of State.

KPCS REQUIREMENTS –  OFAC's Rough Diamonds Control Regulations, 31 CFR Part 592,
implement Executive Order 13312 and the KPCS. The regulations, as amended, were
published in 69 FR 56936. (September 23, 2004). As explained in detail in those 
regulations, except to the extent modified by the Secretary of State, all 
shipments of rough diamonds imported into the United States from a Participant,  
or exported from the United States to a Participant must be accompanied by a  
Kimberley Process Certificate and sealed in a tamper-resistant container.  
The Kimberley Process Certificate must bear the following information:  
the title "Kimberley Process Certificate"; the statement, "The rough diamonds 
in this shipment have been handled in accordance with the provisions of the 
Kimberley Process Certification Scheme for rough diamonds"; country of origin 
for shipment of parcels of unmixed origin; unique numbering with the Alpha 2 
country code, according to ISO 3166-1; date of issuance; date of expiry; name 
of issuing authority; identification of exporter and importer; carat weight/mass;
value; number of parcels in shipment; Harmonized Commodity Description and Coding 
System; and validation by the exporting authority. A shipment of rough diamonds 
imported into the United States that includes a parcel of mixed-origin rough diamonds
must be accompanied by the Kimberley Process Certificate, and the certificate need not
indicate the countries of origin of the diamonds; however, the country-of-origin field
on the certificate must be filled in with asterisks. In addition, the shipment still 
must comply with all other country-of-origin reporting requirements. 

For an inbound shipment of rough diamonds, the ultimate consignee must report
receipt of the shipment to the relevant foreign exporting authority within 15
calendar days of the date that the shipment arrived at a U.S. port of entry. The
report must refer to the relevant Kimberley Process Certificate by its unique
identifying number; specify the number of parcels in the shipment and the total
carat weight; and identify the importer and exporter. To obtain the required
validation of the Kimberley Process Certificate for an exportation of rough
diamonds from the United States to any Participant (including Canada), U.S.
exporters must file transaction-specific information through the Automated
Export System (AES) maintained by the Bureau of the Census, which is the
exporting authority for the United States. Validation of the Kimberley Process
Certificate occurs when the AES confirms the submission of export information by
the return of an Internal Transaction Number, which the exporter is required to
report on the Kimberley Process Certificate.

PENALTIES - The Clean Diamond Trade Act provides for criminal penalties of
$50,000 per count for corporations and individuals and/or ten years imprisonment
for individuals.  Civil penalties of up to $10,000 per violation may be imposed
on any person who violates, or attempts to violate, any order or regulation
issued under the Act.  In addition, those customs laws of the United States,
both civil and criminal, including those laws relating to seizure and
forfeiture, that apply to articles imported in violation of such laws apply with
respect to rough diamonds imported in violation of the Act.

Moreover, 18 U.S.C. 3571 provides that organizations or individuals convicted of
violating a criminal statute may be fined the greater of the amount specified in
the statute, or twice the pecuniary gain or loss from the violation, or $500,000
for felonies and that individuals may be fined $250,000 for felonies.  Finally,
18 U.S.C. 1001 provides for five years’ imprisonment and a $10,000 criminal fine
for knowingly making false statements or falsifying or concealing material facts
with respect to any matter within the jurisdiction of the executive,
legislative,  or judicial branch of the Government of the United States.


EXECUTIVE ORDER 13312 - IMPLEMENTING THE CLEAN DIAMOND TRADE ACT

By the authority vested in me as President by the Constitution and the laws of
the United States of America, including the Clean Diamond Trade Act (Public Law
108-19) (the "Act"), the International Emergency Economic Powers Act, as amended
(50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.),
section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c),
and section 301 of title 3, United States Code, and in view of the national
emergency described and declared in Executive Order 13194 of January 18, 2001,
and expanded in scope in Executive Order 13213 of May 22, 2001, I, GEORGE W.
BUSH, President of the United States of America, note that, in response to the
role played by the illicit trade in diamonds in fueling conflict and human
rights violations in Sierra Leone, the President declared a national emergency
in Executive Order 13194 and imposed restrictions on the importation of rough
diamonds into the United States from Sierra Leone. I expanded the scope of that
emergency in Executive Order 13213 and prohibited absolutely the importation of
rough diamonds from Liberia. I further note that representatives of the United
States and numerous other countries announced in the Interlaken Declaration of
November 5, 2002, the launch of the Kimberley Process Certification Scheme
(KPCS) for rough diamonds, under which Participants prohibit the importation of
rough diamonds from, or the exportation of rough diamonds to, a non-Participant
and require that shipments of rough diamonds from or to a Participant be
controlled through the KPCS. The Clean Diamond Trade Act authorizes the
President to take steps to implement the KPCS. Therefore, in order to implement
the Act, to harmonize Executive Orders 13194 and 13213 with the Act, to address
further threats to international peace and security posed by the trade in
conflict diamonds, and to avoid undermining the legitimate diamond trade, it is
hereby ordered as follows:

Section 1. Prohibitions. Notwithstanding the existence of any rights or
obligations conferred or imposed by any contract entered into or any license or
permit granted prior to July 30, 2003, the following are, except to the extent a
waiver issued under section 4(b) of the Act applies, prohibited:

	(a) 	the importation into, or exportation from, the United States on
or after July 30,  2003, of any rough diamond, from whatever source, unless the
rough diamond has been controlled through the KPCS;

 	(b)	any transaction by a United States person anywhere, or any
transaction that occurs in whole or in part within the United States, that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in this section; and 	

	(c)	any conspiracy formed to violate any of the prohibitions of this
section.
	
Sec. 2. Assignment of Functions.

	(a)  	The functions of the President under the Act are assigned as
follows: (i) sections 4(b), 5(c), 6(b), 11, and 12 to the
Secretary of State; and (ii) sections 5(a) and 5(b) to the Secretary of the
Treasury.

	(b)	The Secretary of State and the Secretary of the Treasury may
reassign any of these functions to other officers, officials, departments, 
and agencies within the executive branch, consistent with applicable law.
	
	(c) 	In performing the function of the President under section 11 of
the Act, the Secretary of State shall establish the coordinating
committee as part of the Department of State for administrative purposes only,
and shall, consistent with applicable law, provide administrative support to the
coordinating committee.  In the performance of functions assigned by subsection
2(a) of this order or by the Act, the Secretary of State, the Secretary of the
Treasury, and the Secretary of Homeland Security shall consult the coordinating
committee, as appropriate.

Sec. 3. Amendments to Related Executive Orders.

	(a) 	Section 1 of Executive Order13194 of January 18, 2001, is
revised to read as follows: "Section 1. Except to the extent provided by section
2 of this order, and notwithstanding the existence of any rights or obligations
conferred or imposed by any contract entered into or any license or permit
granted prior to the effective date of this order, the importation into, or
exportation from, the United States of any rough diamond from Sierra Leone, on
or after July 30, 2003, is prohibited."

	(b) 	Section 2 of Executive Order 13194 is revised to read as
follows: "Sec. 2. The prohibitions in section 1 of this order shall not apply to
the importation or exportation of any rough diamond that has been controlled
through the Kimberley Process Certification Scheme."

	(c) 	Sections 4(c), (d), and (e) of Executive Order 13194 are
deleted, and the word "and" is added after the semicolon at the end of section
4(a).
	
	(d) 	Section 1 of Executive Order 13213 of May 22, 2001, is revised
to read as follows: "Section 1.  Notwithstanding the existence of any rights or
obligations conferred or imposed by any contract entered into or any license or
permit granted prior to the effective date of this order, the direct or indirect
importation into the United States  of all rough diamonds from Liberia, whether
or not such diamonds originated in Liberia, on or after July 30, 2003, is
prohibited."

Sec. 4. Definitions. For the purposes of this order and Executive Order 13194,
the definitions set forth in section 3 of the Act shall apply, and the term
"Kimberley Process Certification Scheme" shall not be construed to include any
changes to the KPCS after April 25, 2003.

Sec. 5. General Provisions. This order is not intended to, and does not, create
any right or benefit, substantive or procedural, enforceable at law or in equity
by any party against the United States, its departments, agencies,
instrumentalities or entities, its officers or employees, or any other person.

Sec. 6. Effective Date and Transmittal.

 	(a) 	Sections 1 and 3 of this order are effective at 12:01 a.m.
eastern daylight time on July 30, 2003. The remaining provisions of this order
are effective immediately.

	(b) 	This order shall be transmitted to the Congress and published in
the Federal Register.

GEORGE W. BUSH
THE WHITE HOUSE,
July 29, 2003.