Grassley Hails Committee Passage of Conflict Diamonds Bill

WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, today
praised the committee’s overwhelming passage of his legislation to help stop the trade of diamonds that fund violent civil conflicts in many African countries.

“The trade of conflict diamonds is a serious problem,” Grassley said. “Funds from the sale
of these diamonds add fuel to civil conflicts in several African countries and elsewhere. Millions of
people end up suffering. These countries and their people deserve our support. Passing this bill is the right thing to do.”

The Finance Committee today unanimously passed the Clean Diamond Trade Act (S. 760),
which Grassley introduced last night with strong bipartisan support, as modified during committee
consideration (please see below for a full description). The legislation will implement the United
States’ participation in the Kimberley Process Certification Scheme for trade in rough diamonds. The Kimberley plan is an international agreement establishing minimal acceptable international standards for national certification relating to cross-border trade in rough diamonds. It represents more than two years of negotiations among more than 50 countries, human rights advocacy groups, the diamond industry, and non-governmental organizations.

Grassley has heard from dozens – and possibly hundreds – of Iowans, urging him to stop the
trade of conflict diamonds. The Iowans wrote to Grassley on behalf of the Campaign to Eliminate
Conflict Diamonds, an umbrella group of human rights organizations including Amnesty International, Oxfam America, World Vision, and Catholic Relief Services. Today, Catholic Relief Services put out a news release supporting today’s legislative effort.

“The United States played a leadership role in crafting the Kimberley Process Certification
Scheme,” Grassley said. “It’s important that we continue our leadership role on this important issue.”

Grassley said conflict diamonds are mined and used by rebel movements in many African
nations as a source of revenue to fuel armed conflict and the activities of rebel movements aimed at undermining or overthrowing legitimate governments in African countries. “Millions of people have been driven from their homes by wars over control of these diamonds,” Grassley said. “Families and entire countries have been torn apart.”

Grassley said the Clean Diamond Trade Act is a compromise bill that he worked on with
bipartisan supporters of efforts to stop trade in conflict diamonds. Grassley said prior attempts to
move similar bills stalled in both the House and the Senate, so he worked to put together a bill that implements a certification process that meets the United States’ international responsibilities, that can pass the House and the Senate, and most importantly, that works.

Grassley said he hopes the Senate and House will adopt the Clean Diamond Trade Act before
the next plenary session of the Kimberley Process Certification Scheme, which is scheduled to
convene in Johannesburg, South Africa, from April 28 to April 30, 2003. The timing is important to ensure that the United States retains its leadership in the Kimberley process and does everything possible to stop the trade of conflict diamonds as soon as possible, Grassley said.

“This is a trade issue, a consumer issue, and most of all, a human rights issue,” Grassley said.
“Legitimate trade can elevate the standard of living for people all over. And the benefits of trade in valuable natural resources like diamonds should accrue to the peace-loving majority instead of the violent rebel minority.”

The Clean Diamond Trade Act implements the United States’ obligations as a participant in
the Kimberley Process Certification Scheme (KPCS). The KPCS was developed by the United
States and other nations to remove conflict diamonds from the legitimate diamond trade. Conflict diamonds are so named because fighting over diamond mines fuels and sometimes funds civil conflicts in some African countries. The KPCS represents the culmination of many years of work by President Bush and prior administrations to end trade in conflict diamonds. This legislation ensures that the United States will assume the specified responsibilities of participation, including that imported and exported rough diamonds be properly certified, and that the United States trade only with participating countries. Presently, the participating countries include: Algeria, Angola, Armenia, Australia, Belarus, Botswana, Brazil, Burkina Faso, Cameroon, Canada, Central African Republic, China (People’s Republic of), Congo (Democratic Republic of) , Congo (Republic of), Cote D’lvoire, Cyprus, Czech Republic, European Community, Gabon, Ghana, Guinea, Guyana, Hungary, India, Israel, Japan, Korea (Democratic People’s Republic of), Korea (Republic of), Laos, Lebanon, Lesotho, Malaysia, Mali, Malta, Mauritius, Mexico, Namibia, Norway, Philippines, Russian Federation, Sierra Leone, South Africa, Sri Lanka, Swaziland, Switzerland, Tanzania, Thailand, Togo, Turkey, Ukraine, United Arab Emirates, United States of America, Venezuela, Vietnam, and Zimbabwe. The trading entities of Taiwan, Penghu, Kinmen and Matsu are also recognized as participants.

The next plenary session of the Kimberly Process is scheduled to convene in Johannesburg
from April 28th to the 30th, 2003. Implementation of the KPCS by the United States prior to April
28th, 2003 will ensure that the U.S. continues its leadership role in curtailing trade in conflict
diamonds.

Summary of Provisions

Note: The bill adopted by the committee today includes a modified amendment introduced
by Sen. Max Baucus, ranking member, that establishes a Kimberley Process Coordinating Committee to coordinate implementation of the Act. The coordinating committee is to be co-chaired by the Secretary of Treasury and the Secretary of State and composed of the Secretary of Commerce, the United States Trade Representative, the Secretary of Homeland Security, and a representative of any other agency the President deems appropriate. This provision will be incorporated into the bill in the appropriate section, to be determined.

Sec. 1. Short Title. This Act may be cited as the “Clean Diamond Trade Act.”

Sec. 2. Findings. Enumerates congressional findings regarding the Act.

Sec. 3. Definitions. Defines terms utilized in the Act.

Sec. 4. Measures for the Importation and Exportation of Rough Diamonds. Sec. 4(a)
Requires the President to prohibit the importation or exportation of rough diamonds that have not been controlled through the Kimberley Process Certification Scheme. Sec. 4(b) Authorizes the
President to waive the prohibition for periods of not more than one year if the President determines and reports to Congress that a country is taking steps to implement the Kimberley Process or the President determines and reports to Congress that the wavier is in the national interest of the United States.

Sec. 5. Regulatory and Other Authority. Sec. 5(a) Authorizes the President to issue such
proclamations, regulations, licenses, and orders, and conduct such investigations as necessary to carry out the legislation. Sec. 5(b) Requires any U.S. person importing rough diamonds into or exporting rough diamonds from the United States to keep a full record of any transaction covered by the legislation and authorizes the President to require the production of such records under oath. Sec. 5(c) Mandates the President to require the appropriate agency to conduct annual reviews of the procedures of any entity in the United States that issues Kimberley Process Certificates for exportation, to determine whether they are in accordance with the Kimberley Process.

Sec. 6. Importing and Exporting Authorities. Sec. 6(a) Provides that the importing
authority shall be the U.S. Bureau of Customs and Border Protection and that the exporting authority shall be the U.S. Census Bureau. Sec. 6(b) Requires the Secretary of State to publish a list of all participants to the Kimberley Process and all exporting and importing authorities of those participants. Sec. 6(b) Also requires the Secretary to update the list of participants as necessary.

Sec. 7. Statement of Policy. Expresses congressional support for presidential efforts to
facilitate the adoption of the KPCS by other countries.

Sec. 8. Enforcement. Provides for civil and criminal penalties for violations of the Act both
under and in addition to existing law.

Sec. 9. Technical Assistance. Permits the President to direct federal agencies to provide
technical assistance to countries trying to implement the Kimberley Process.

Sec. 10. Sense of Congress. Expresses the Sense of the Congress that: the Kimberley Process
is an ongoing process and that the President should work to strengthen the KPCS through the
adoption of measures on the sharing of statistics on rough diamond trade and for monitoring the
effectiveness of the process; that the President should keep and publish statistics on the importation and exportation of rough diamonds, make these statistics available for analysis, and take a leadership role in negotiating a standardized methodology for reporting import and export statistics.

Sec. 11. Reports. Provides for annual and semiannual reports to be submitted by the President
to Congress, including a report on whether there is statistical or other information that would indicate circumvention of the KPCS.

Sec. 12. GAO Report. Requires the Comptroller General to transmit a report to Congress
no later than 24 months after the effective date of the Act on the effectiveness of the Act in
preventing trade in conflict diamonds.

Sec. 13. Effective Date. Provides an effective date for the Act.

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