Memorandum D19-6-4: Exporting and Importing Rough Diamonds, the Kimberley Process

ISSN 2369-2391

Ottawa, October 21, 2024

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Plain language summary

Target audience: Trade chain partners, including importers, exporters, customs brokers

Key content: This memorandum outlines and explains the legislation, regulations and general guidelines that apply to the exportation and importation of rough diamonds out of or into Canada

Keywords: CARM, importing, exporting, CAD (Commercial Accounting Declaration), rough diamonds, mining

Updates made to this D-memo

This D-memorandum has been updated to provide instructions on how to declare rough diamonds using the new Commercial Accounting Declaration (CAD) process.

Guidelines

This memorandum contains guidelines and information on the Kimberley Process certification scheme for the trade in rough diamonds. On January 1, 2003, the provisions of the Export and Import of Rough Diamonds Act and its associated regulations became law. This legislation is the responsibility of Natural Resources Canada (NRCan). The Canada Border Services Agency (CBSA) and the Royal Canadian Mounted Police (RCMP) will assist NRCan with the border enforcement aspects of the Kimberley Process certification scheme.

Kimberley Process certification scheme

1. The Export and Import of Rough Diamonds Act was introduced as a result of commitments made by several countries, including Canada, that participate in the Kimberley Process Certification Scheme. List of Kimberley Process participants.

2. The purpose of the certification scheme is to prevent the international movement of conflict or "blood" diamonds that are being used to fund rebel activities in various African countries. The scheme requires imports and exports of rough diamonds to be accompanied by valid Kimberley Process Certificate (KPC) and transported in tamper-resistant containers.

3. The Export and Import of Rough Diamonds Act defines a rough diamond as "a diamond that is unsorted, unworked or simply sawn, cleaved or bruted, and that falls under subheading 7102.10, 7102.21 or 7102.31 in the List of Tariff Provisions set out in the schedule to the Customs Tariff." Diamonds that are cut and polished and ready to be mounted, set or fitted do not fall under the provisions of the Act and do not require a KPC.

4. The Minister of Natural Resources has designated NRCan inspectors and the RCMP to respectively administer and enforce the Export and Import of Rough Diamonds Act.

5. The CBSA’s role is to review the KPCs, verify that appropriate containers are used and detain shipments that appear to violate the Export and Import of Rough Diamonds Act.

6. Information relating to Canadian diamonds that are exported and then returned to Canada can be found in Memorandum D10-14-39, Canadian Diamonds Exported and Returned.

Import controls

7. Every person who imports rough diamonds into Canada must ensure that the rough diamonds are in a container that meets the requirements described in the section called Containers and Seals of this memorandum and is accompanied by a valid KPC (the KPC has to physically accompany the shipment) that:

has been issued by a participant
has not been invalidated by the participant
contains accurate information and
contains the data elements listed in the Appendix

8. If there are no discrepancies between the KPC and the import documentation at the time of importation, the CBSA will stamp the KPC with the CBSA Integrated Stamp and return it to the importer or the importer’s authorized agent.

9. The importer or the importer’s authorized agent must forward the KPC, within seven days after import, to NRCan at the address provided in this memorandum in the section called Additional Information.

10. The CBSA will detain shipments if any of the following circumstances occur:

no KPC is presented and the goods are suspected to be rough diamonds
discrepancies are identified on the KPC
the KPC is suspected to be fraudulent
the shipment is imported from a non-participant
the packaging requirements are not met or
the KPC has expired

Commercial Accounting Declaration

11. Effective May 13, 2024, the Form B-3 will be replaced by the Commercial Accounting Declaration (CAD) C Type. Importers should be aware that specific coding requirements apply to imports of rough diamonds that are classified under tariff item Nos. 7102.10, 7102.21, 7102.31 and 9813.00.00.41. The KPC that is required for imports of rough diamonds has a unique identification number and this number must be entered in Field 81 (Special Authority Permit). In most cases, it will be possible to enter the KPC number in field 81 of the CAD as it appears on the certificate. For example, the KPC number that appears on the United States certificate starts with US, while the European Union KPC number starts with EU. However, as the format of the KPC number varies among the participating countries and because there are field limitations, it may be necessary for the importer to modify the number before entering it. The following rules apply when completing field 81:

The KPC number must begin with the two-letter country code. The country code must be added to the beginning of the number if it is not included
The KPC number must be no more than 20 characters. If it is longer than 20 characters, then the appropriate number of characters should be deleted from the end of the number

For more information, visit CARM: The new way to assess and pay duties and taxes on imported commercial goods.

Export controls

12. Every person who exports rough diamonds from Canada must ensure that the diamonds are in a proper container that meets the requirements in the section called Containers and Seals and are accompanied by a valid Canadian KPC.

13. At the time of export, if there are no discrepancies between the Canadian KPC and the export documentation, the CBSA will date-stamp the export declaration and exporter’s copy portion of the KPC and return them to the exporter.

14. The exporter or the exporter’s agent must forward the export declaration portion of the KPC, within seven days after export, to the Kimberly Process Office at NRCan at the address provided on the reverse side of the KPC.

15. The CBSA will detain shipments and immediately contact NRCan’s Kimberley Process Office to get instructions on how to proceed if any of the following circumstances occur:

No KPC is presented and the goods are suspected to be rough diamonds
Discrepancies are identified on the KPC
The KPC is suspected to be fraudulent
The shipment is about to be exported to a non-participant
The packaging requirements are not met
The KPC has expired

In-transit shipments

16. As per the Export and Import of Rough Diamonds Act, shipments of rough diamonds that are transiting Canada (in-transit shipments) are not considered to be imported into Canada or exported from Canada.

17. In-transit shipments can be seized if they are not accompanied by a KPC certificate or are in a container that has been opened. However, if the Minister of Natural Resources orders the shipment to be returned to the participant who exported it then the rough diamonds cannot be seized.

18. In the event that the shipment transiting Canada cannot make an immediate connecting flight to the final destination, the CBSA will issue the person transporting the sealed container a BSF241, Non-monetary General Receipt and the shipment will remain in CBSA's custody and control until the connecting flight is ready for departure. At that time the CBSA will deliver the shipment, to the person issued the BSF241, at the gate to ensure the goods are exported.

Single Window Initiative and the Kimberley Process Rough Diamonds Program

19. The Single Window Initiative (SWI) provides commercial importers with the ability to submit electronic information to the CBSA, in advance of their arrival, through the use of the Integrated Import Declaration (IID) using service option 911. This new service is voluntary and provides the ability for importers and brokers to obtain release of various regulated goods that previously could only be released through a paper process. The IID can be submitted up to 90 days in advance and the trade chain partner will be able to receive border decisions related to the release of the diamonds up to 90 days in advance of their arrival.

20. In order to meet the SWI commitment to reduce paper, a new Document Image Functionality (DIF) has been developed. The DIF, service option 927, allows importers and brokers to electronically submit digital images of documents that traditionally needed to be presented with the importation documentation.

Note: In the case of rough diamonds importations, if commercial importers decide to submit advance electronic information to the CBSA using the SWI service, the submission of the KPC number remains mandatory; however, the submission of the KPC image is optional; an original KPC must still accompany the shipment into Canada and be verified by the CBSA at the point of entry for authenticity. Lastly, presentation of the original KPC to the CBSA, at the time of release and for further validation, must be accompanied by a "Release Information Sheet" (refer to Memorandum D17-1-4, Release of Commercial Goods (Appendix D).

The SWI Integrated Import Declaration electronic commerce client requirements document provides technical and system requirements information. Appendix B of the document includes a list of required data elements for Natural Resources Canada.

For more information visit the Single Window Initiative.

Containers and seals

21. A container that is used to export or import rough diamonds must be constructed so that it cannot be opened when sealed without showing evidence of having been opened. In addition, a container in which rough diamonds are exported from Canada must be secured with a seal that bears a seal number listed on the accompanying Canadian KPC. If a situation arises where a seal is broken at the time of export from Canada, either as a result of a CBSA examination or damage in-transit, NRCan must be informed immediately. CBSA, in consultation with NRCan, will inform the exporter of next steps. In the event that an imported shipment is examined and the seal is broken or damage in-transit, NRCan must be informed immediately. CBSA, in consultation with NRCan, will inform the importer or the importer’s authorized agent of next steps.

Penalties

22. Subsection 41.(1) of the Export and Import of Rough Diamonds Act sets out the following penalties for various offences under this Act: (a) an indictable offence and liable to a fine in an amount that is in the discretion of the court or to imprisonment for a term not exceeding 10 years, or to both; or (b) an offence punishable on summary conviction and liable to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months, or to both.

23. In the event that a CBSA infraction may also apply to the shipment (e.g., smuggling or false statements are made regarding the country of origin in the case of imports; non-report or false statements are made regarding the destination country in the case of exports), the CBSA will detain the goods and charges may be laid under both the Customs Act and the Export and Import of Rough Diamonds Act.

Appendix A: Required data elements for Kimberley Process Certificates

Required data elements for Kimberley Process Certificates

Identification of importer and exporter
Carat weight
Value in U.S. dollars
Harmonized System subheading
Name of issuing authority
Unique KPC identification number (beginning with the two-letter country code)
Date of issue
Date of expiry
Number of packages/parcels or containers
Validation by issuing authority
Country of origin of unmixed (i.e. from same) mining origin

Note: A certificate should bear the title "Kimberley Process Certificate" and have the following statement: "The rough diamonds in this shipment have been handled in accordance with the provisions of the Kimberley Process certification scheme for rough diamonds".

Note: A Kimberley Process certificate issued to export rough diamonds from Canada will apply to one shipment, identify the appropriate seal number(s) and be valid for a period of 60 days.

References

Applicable legislation

Superseded memoranda D

Memorandum D19-6-4

Issuing office

Other Government Programs Unit
Program and Policy Management Division
Commercial Programs Directorate
Commercial and Trade Branch

Contact us

For more information on the requirements of the Kimberley Process, contact:

Kimberley Process Office
Lands and Minerals Sector
Natural Resources Canada
580 Booth Street, 10th floor
Ottawa ON K1A 0E4
Telephone: 343-292-8710
1-866-539-0766 (toll-free)
Email: kpc-cpk-canada@nrcan-rncan.gc.ca

Website: Importing and exporting rough diamonds: The Kimberley Process
Office hours: 9 am to 5 pm Monday to Friday

Questions concerning the administration of these procedures from a CBSA perspective should be directed to the CBSA Border Information Service (BIS).

Page details

Date modified:: 2024-10-21

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