1st Session, 37th Parliament,
49-50 Elizabeth II, 2001

House of Commons of Canada

BILL C-402

An Act to prohibit the importation of conflict diamonds into Canada

Preamble

Whereas illegally-mined diamonds are being used to finance military activities, overthrow legitimate governments, subvert international efforts to promote peace and stability and commit horrifying atrocities against unarmed civilians;

Whereas the illicit trade diamonds is being used to continue and spread conflicts;

Whereas a comprehensive effort is required to end the diamond smuggling that fuels these conflicts;

And Whereas, consistent with Resolution 55/56 of the United Nations General Assembly, Canada, as a member of the Kimberley Process, is involved in working to find a solution to prohibit the trade in conflict diamonds that does not result in damaging the economies of countries who engage in the legitimate trade of diamonds;

Now, Therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

1. This Act may be cited as the Conflict Diamonds Act.

INTERPRETATION

Definitions

2. In this Act, unless the context otherwise requires,

``diamonds''
« diamants »

``diamonds'' includes rough diamonds and polished diamonds;

``Minister''
« ministre »

``Minister'' means the Minister of National Revenue or an officer, as defined in subsection 2(1) of the Customs Act, who is designated by the Minister;

``polished diamond''
« diamant poli »

``polished diamond'' means a diamond as classified under subheading No. 7102.39 set out in the schedule to the Customs Tariff;

``regulations''
« règlement »

``regulations'' means regulations made under section 8;

``rough diamond''
« diamant brut »

``rough diamond'' means a diamond that is unworked or simply sawn, cleaved or bruted, as classified under subheading No. 7102.31 set out in the schedule to the Customs Tariff;

``World Trade Organiza-
tion'' or ``WTO''
« Organisatio n mondiale du commerce » ou « OMC »

``World Trade Organization'' or ``WTO'' means the World Trade Organization established by Article I of the World Trade Organization Agreement;

``World Trade Organization Agreement''
« Accord sur l'Organisa-
tion mondiale du commerce »

``World Trade Organization Agreement'' has the same meaning as the word ``Agreement'' in subsection 2(1) of the World Trade Organization Agreement Implementation Act.

CONTROL ON THE IMPORTATION OF DIAMONDS

Import control system for rough diamonds

3. (1) No person may import rough diamonds into Canada unless the exporting country is implementing a control system, either on its own initiative or as a signatory to an international agreement, that requires

    (a) rough diamonds to be exported from, and imported into, that country in secure and transparent containers that are

      (i) sealed by an appropriate government official of that country, and

      (ii) accompanied by a fully visible export document issued by the government of the country from which the diamonds have been extracted that records the name of that country, a unique export registration number for, and a total carat weight and number of, the diamonds;

    (b) the information referred to in subparagraph (a)(ii) to be recorded and stored by an appropriate government official of the exporting country; and

    (c) the verification, by an appropriate government official of the exporting country, of the information referred to in subparagraph (a)(ii).

Polished diamonds and diamond jewellery

(2) Subject to subsections (3) and (4), no person may import polished diamonds or jewellery containing diamonds into Canada unless the exporting country

    (a) is implementing a control system for rough diamonds that is at least functionally equivalent to the one described in subsection (1); and

    (b) requires that diamonds only be imported into that country from a country that in turn is implementing a control system for rough diamonds that is at least functionally equivalent to the one described in subsection (1).

Exception for polished diamonds

(3) Subject to the regulations, subsection (2) does not apply in respect of polished diamonds that are imported into Canada if

    (a) they have been previously exported from Canada and are being reimported by the same importer;

    (b) they have not had their value increased or their condition improved by any process or other means while abroad; and

    (c) the importer provides a written and signed declaration to the Minister at the time of import that states that the conditions referred to in paragraphs (a) and (b) have been met.

Exception for jewellery containing diamonds

(4) Subject to the regulations, subsection (2) does not apply in respect of jewellery containing diamonds that is imported into Canada if,

    (a) where the jewellery is for the importer's personal use and not for resale and accompanies the importer into Canada, the importer, at the time of import, provides a written and signed declaration to the Minister that states that the conditions referred to in this paragraph have been met; or

    (b) where paragraph (a) does not apply,

      (i) the jewellery has been previously exported from Canada and is being reimported by the same importer,

      (ii) the jewellery has not had its value increased or its condition improved by any process or other means while abroad, and

      (iii) the importer provides a written and signed declaration to the Minister at the time of import that states that the conditions referred to in subparagraphs (i) and (ii) have been met.

Verification

(5) No person may import diamonds and jewellery containing diamonds into Canada unless, at the time of import, the Minister verifies that the applicable requirements referred to in subsections (1) to (4) have been met.

Monitoring committee

4. The Minister shall establish a committee that is composed of those representatives of the diamond industry and of other sectors as the Minister considers appropriate,

    (a) to monitor the effectiveness of the control system referred to in subsection 3(1) and the requirements set out in subsections 3(2) to (4) in respect of polished diamonds and jewellery containing diamonds; and

    (b) to report and make recommendations to the Minister on the ways to improve the system, the requirements and their monitoring.

Seizure

5. (1) The Minister may seize diamonds and jewellery containing diamonds that are imported into Canada where the Minister believes, on reasonable grounds, that the diamonds or the jewellery containing diamonds are being imported in contravention of this Act or the regulations.

Property of Her Majesty

(2) Any diamonds and jewellery containing diamonds that have been seized and in respect of which the importer has been found guilty of contravening this Act or the regulations become the property of Her Majesty in right of Canada.

Restrictions on the powers of the Export Development Corporation

6. Notwithstanding section 10 of the Export Development Act and any regulations made under it, the Export Development Corporation, established under section 3 of that Act, may not insure, reinsure, guarantee or finance any investment in connection with a project involving the mining, processing or sale of diamonds in a country that is not implementing a control system described in subsection 3(1).

Exception

7. (1) Subject to subsection (2), the Governor in Council may, by order, name a country from which diamonds may be imported notwithstanding that the country is not implementing a control system that is at least functionally equivalent to the one described in subsection 3(1), if, on the advice of the Minister of National Revenue and the Minister for International Trade, the Governor in Council determines that the country is making significant progress towards

    (a) implementing that control system; or

    (b) becoming a signatory to an international agreement that requires participating countries to implement that control system.

Restrictions on order

(2) The Governor in Council may only make one order in respect of each country that meets a condition referred to in subsection (1) and the order may be in effect for a maximum period of 6 months.

Regulations

8. The Governor in Council may make such regulations that, in the Governor in Council's opinion, are necessary to carry out the purposes and provisions of this Act.

Obligations under World Trade Organization Agreement

9. (1) Nothing in this Act shall be construed to require action by the Government of Canada that, in accordance with a WTO dispute settlement proceeding determination, would be a violation of Canada's obligations under the World Trade Organization Agreement.

Respect of WTO Agreement obligations

(2) Where there is a determination in a WTO dispute settlement proceeding that any provisions of this Act or the regulations or any action taken under this Act or the regulations is inconsistent with a provision of the World Trade Organization Agreement, the provisions of that Agreement shall prevail and Canada shall take such steps as are necessary to respect its WTO obligations under that Agreement.

Report to Parliament

10. The Minister of National Revenue and the Minister for International Trade together shall table in both Houses of Parliament, within six months after the coming into force of this Act, and annually thereafter, a report that

    (a) evaluates the effectiveness of this Act in preventing the importation of diamonds and jewellery containing diamonds traded in contravention of this Act or the regulations;

    (b) identifies those countries that are complying with subsection 3(1);

    (c) identifies those countries that are not complying with subsection 3(1) and describes the effects of that failure on the trade in diamonds used to support conflicts in the country or regions in which the diamonds are extracted; and

    (d) describes technological developments that allow the determination of where a diamond is mined and the marking and tracking of rough and polished diamonds.

OFFENCES AND PENALTIES

Offence and penalty

11. Any person who imports, attempts to import, or aids or abets the import or attempted import of diamonds and jewellery containing diamonds in contravention of this Act or the regulations is guilty of an indictable offence and liable to a fine not exceeding $500,000 or to imprisonment for a term not exceeding five years, or to both.