Council Regulation (EC) No 2368/2002Show full title

CHAPTER IV U.K. INDUSTRY SELF-REGULATION

Article 17 U.K.

1. Organisations representing traders in rough diamonds which have established a system of warranties and industry self-regulation for the purposes of implementing the KP Certification Scheme may apply to the Commission for listing in Annex V directly or through the appropriate Community authority.

2. When applying for listing, an organisation shall:

(a) provide conclusive evidence that adopted rules and regulations whereby its members dealing in rough diamonds, whether natural or legal persons, undertake that they will, at the latest from the date of applicability of the Articles referred to in Article 29(3):

(i)

sell only diamonds purchased from legitimate sources in compliance with the provisions of relevant United Nations Security Council Resolutions and of the Kimberley Process Certification Scheme and guarantee in writing on the invoice accompanying each sale of rough diamonds that, on the basis of their personal knowledge and/or written warranties provided by the supplier of such rough diamonds, the rough diamonds sold are therefore not conflict diamonds;

(ii)

see that each sale of rough diamonds is accompanied by an invoice containing the said signed guarantee unequivocally identifying the seller and buyer and their registered offices, containing the VAT identification number of the seller, where applicable, the quantity/weight and qualification of the goods sold, the value of the transaction and the date of delivery;

(iii)

not buy rough diamonds from suspect or unknown sources of supply and/or rough diamonds originating in non-participants in the KP certification scheme;

(iv)

not buy rough diamonds from any source found, after legally binding due process, to have violated government laws and regulations concerning the trade in conflict diamonds;

(v)

not buy rough diamonds in, or from, any region that is the subject of an advisory notice from a governmental or KP certification scheme authority to the effect that conflict diamonds are emanating from, or are available for sale in, that region;

(vi)

not knowingly buy, sell or assist others in buying or selling conflict diamonds;

(vii)

ensure that all employees buying or selling rough diamonds within the diamond trade are fully informed of trade resolutions and government regulations restricting the trade in conflict diamonds;

(viii)

create and maintain for at least three years records of invoices received from suppliers and issued to customers;

(ix)

instruct an independent auditor to certify that these records have been created and maintained accurately and either that it has identified no transactions which failed to comply with the undertakings referred to in (i) to (viii) or that any transaction which failed to comply with such undertakings has been duly reported to the appropriate Community authority;

and

(b) provide conclusive evidence that is has adopted rules and regulations which oblige the organisation:

(i)

to expel any member found, after a due process inquiry by the organisation itself, to have seriously violated the abovementioned undertakings; and

(ii)

to publicise that member's expulsion and notify the Commission thereof;

(iii)

to make known to all its members all governmental and KP certification scheme laws, regulations and guidelines regarding conflict diamonds and the names of any natural or legal person found guilty, after legally binding due process, of violating these laws and regulations;

and

(c) provide the Commission and the appropriate Community authority with a complete list of all its members dealing in rough diamonds, including full names, addresses, location and other information which will contribute to avoiding mistaken identities.

3. Organisations covered by this Article shall immediately notify the Commission and the Community authority of a Member State in which they are resident or established of all changes in their membership subsequent to the application for listing.

4. In accordance with the procedure referred to in Article 22(2), the Commission shall list in Annex V each organisation that fulfils the requirements of this Article. It shall notify all Community authorities of the names and other relevant particulars of the members of listed organisations and any changes therein.

5. (a) A listed organisation or a member thereof shall provide the relevant Community authority with access to any information that may be needed to assess the proper functioning of the system of warranties and industry self-regulation. Where circumstances justify, that Community authority may require additional guarantees that an organisation is able to maintain a credible system.

(b) The appropriate Community authority shall report its assessment to the Commission on an annual basis.

6. If, in the course of monitoring the proper functioning of the system, a Community authority in a Member State obtains credible information that a listed organisation covered by this Article and established or resident in that Member State, or a member thereof established or resident in that Member State, is infringing the provisions of this Article, it shall inquire into the matter to verify whether the provisions of this Article have effectively been infringed.

7. (a) If the Commission has credible information that a listed organisation or a member thereof is infringing the provisions of this Article, it shall request an assessment of the situation by the Community authority of a Member State in which the organisation or its member is resident or established. Upon such request, the relevant Community authority shall promptly inquire into the matter and duly inform the Commission of its findings.

(b) If the Commission, on the basis of reports, assessments or other pertinent information, comes to the conclusion that a system of warranties and industry self-regulation does not function properly, and the issue has not been addressed adequately, the Commission shall take the necessary measures in accordance with the procedure referred to in Article 22(2).

8. If an inquiry leads to the conclusion that an organisation is infringing the provisions of this Article, the Community authority of a Member State in which that organisation is resident or established will notify the Commission thereof without delay. In turn, the Commission, in accordance with the procedure referred to in Article 22(2), shall take the appropriate measures with a view to removing that organisation from the list in Annex V.

9. If a listed organisation or one or more of its members are established or resident in a Member State that has not designated a Community authority for the purposes of this Article, the Commission shall be the Community authority for that organisation or those members.

10. Organisations or their members covered by this Article acting in the territory of a participant other than the Community shall be considered to have complied with the provisions of this Article if they comply with the rules and regulations that this participant has laid down for the purpose of implementing the Kimberley Process Certification Scheme.