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Conflict Diamonds

Conflict free certificateConflict Diamonds, also known as blood diamonds, are those diamonds that have come out of countries where there is war and bloodshed, misery and death. Diamonds from such areas are used to finance the conflicts and wars in the area. As part of the attempt to prevent this and make it difficult for such diamonds to enter the international diamond industry a process has been set up called the Kimberley Process.

Conflict diamonds first came to the attention of the world media during the extremely brutal conflict in Sierra Leone in the 1990s. The UN, governments, the diamond industry and non-governmental organizations, such as Global Witness, Amnesty International and Partnership Africa Canada, for example, recognized the need for a global system to prevent conflict diamonds from entering the legitimate diamond supply chain and thus helping to fund conflict.

The agreement developed was called the Kimberley Process. This process requires participating governments to ensure that each shipment of rough diamonds be exported/imported in a secure container, accompanied by a uniquely numbered, government-validated certificate stating that the diamonds are from sources free of conflict.

In order to prevent such diamonds from entering the legitimate supply chain a monitoring process has been set up which provides continuous checks as a diamond is moved from the source point through to the jewelry store. The Kimberley Process and System of Warranties was mandated by the United nations and these days over 99 percent of all diamonds that go through this process. are certified to originate from conflict free sources.

Of course this does not guarantee that conflict, or blood diamonds, are not sold through other, less dubious sources but, as time goes by, these diamonds will be less able to be sold and on sold on the secondary market as more and more dealers and consumers demand authentication of a diamonds origin.

The way this process works is by instituting a number of checks or ‘warranties’ at various check points as the diamond works its way from mine to store.

After the rough diamonds are mined, they are then transported to Government Diamond Offices.

At the Government Diamond Offices, the source of the diamonds are checked to ensure they are conflict free. This is the most crucial check as all subsequent checks do not check the origin but that the diamonds have correctly arrived from the last checkpoint. Once the source is validated, the diamonds are sealed and placed into tamper resistant containers and issued with a government-validated Kimberley Process Certificate. Each Certificate bears a unique serial number. 71 countries have implemented the principles of the Kimberley Process and have it enshrined in their national law so only these countries may legitimately export rough diamonds.

As a result, diamonds can only be legally imported into one of the 71 Kimberley process countries. Once diamonds are imported, a further check by the government customs office, in conformance with its national procedures, checks the certificate and seals on the container. Any rough diamonds without a government-validated Kimberley Certificate or that are unsealed are turned back or impounded by Customs.
Blood Diamonds
From this point on, once a diamond has been legitimately imported it is ready to go through the usual process of being traded, cut, polished and set into jewelry. Many companies and dealers may be involved in this process but each time the diamond changes hands it must be accompanied by a warranty on invoices stating that the diamond is not from a conflict source. This is called the System of Warranties.

Nowadays all manufacturers, traders and dealers are required to audit these System of Warranties statements on their invoices as part of their annual audit process and to keep all records for 5 years.

Retailers are also carry a responsibility for responsible for ensuring that the diamonds they stock and sell carry such a warranty that the diamonds are conflict free. Retailers are also required to audit these Systems of Warranties statements on their invoices as part of their annual audit process and to keep such records for 5 years. However, the System of Warranties does not require the warranty to appear on the consumer’s receipt. Consumers can and, and should, ask for assurances from their retailers that their diamond is from sources free from conflict and should be able to see such warranties.

Under this system, which has been endorsed by all Kimberley Process participants, all buyers and sellers of both rough and polished diamonds must make the following affirmative statement on all invoices:
“The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations Resolutions. The undersigned hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.”

All members of the trade who provide such assurances should keep records of both their customer warranties and their System of Warranties statements from their suppliers. This flow of warranties in and out must be audited and reconciled on an annual basis by the company’s own auditors. If asked for by a duly authorized government agency, these records must be able to prove that the supplier is in compliance with the Kimberley Process.

Failure to abide by the aforementioned principles exposes the member to expulsion from industry organizations. Under the terms of the Kimberley Process, it will be considered a violation to issue a warranty declaration on a sales invoice unless it can be corroborated by warranty invoices received for purchases. Failure to adhere to these principles will prompt investigation and could result in expulsion from the various diamond industry institutions.

The Kimberley Process and System of Warranties ensures that the diamonds you buy at the diamond store or from as legitimate diamond are not conflict diamonds and are blood free!

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