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TRADE IN AFRICAN DIAMONDS

WEDNESDAY, SEPTEMBER 13, 2000

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,
SUBCOMMITTEE ON TRADE,

Washington, D.C. The Subcommittee met, pursuant to notice, at 9:35 a.m., in room 1100, Longworth House Office Building, Hon. Philip M. Crane (Chairman of the Subcommittee) presiding.

[The advisories announcing the hearing follow:]

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Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade of the Committee on Ways and Means, announced today that the Subcommittee will hold a hearing on trade in African diamonds. The hearing will take place on Tuesday, September 12, 2000, in the main Committee hearing room, 1100 Long. worth House Office Building, beginning at 10:00 a.m.

Oral testimony at this hearing will be from both invited and public witnesses. Invited witnesses will include officials from the U.S. Department of State and the U.S. Department of the Treasury. Also, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee or for inclusion in the printed record of the hearing.

BACKGROUND:

Recently, there has been intensified international focus on the trade in diamonds and its link to illegal arms trafficking and civil war in Africa. Often called "conflict" or "blood" diamonds, such diamonds generally come from mines controlled by rebel forces and are traded for arms to fuel civil war in Africa.

Many claim that the Sierra Leone rebel organization Revolutionary United Front has engaged in atrocious acts against civilians and has been trading conflict diamonds to finance its war against the Government of Sierra Leone. On July 5, 2000, the United Nations adopted a resolution calling for an 18-month embargo against diamonds from Sierra Leone. The resolution calls on member States to ban the importation of rough diamonds from Sierra Leone unless those diamonds are exported under a certificate system approved by a Security Council Sanction Committee. This ban is similar to the U.N. embargo implemented against diamonds from Angola in June 1998.

The United States has been actively involved in efforts to curb trade in conflict diamonds. In May 2000 in Kimberly, South Africa, the United States, along with South Africa, the United Kingdom, Belgium, and representatives of the diamond industry reached an agreement on key issues establishing a certification system, accountability and oversight for the industry. The United States has also taken a lead in establishing Sierra Leone's Commission on the Management of Strategic Resources and has committed over $1 million as well as technical advice for this effort.

In response to the international focus on conflict diamond trade and the U.N. ban against diamonds from Sierra Leone, the World Diamond Congress (comprised of the World Federation of Diamond Bourses and the International Diamond Manufacturers Association) adopted on July 19, 2000, a joint resolution laying out a proposal for oversight, accountability and specific actions to track the flow of rough diamonds. The proposal requires each accredited rough diamond importing country to enact "redline” legislation prohibiting the importation of any parcel of rough diamonds unless such parcel has been sealed and registered in a universally standardized manner by an accredited export authority from the exporting country. In addition, the proposal does the following: (1) calls for the exporting country to implement an accredited export system; (2) prohibits the importation of diamonds from countries that have not enacted redline legislation; (3) requires countries to adopt criminal penalties for trading in illicit rough diamonds; and (4) requires adherence to a code of conduct. Under the proposal, compliance is to be monitored and controlled by the industry, the International Diamond Council.

Under U.S. law, the origin of a cut diamond is the country where the diamond was cut, and U.S. Customs does not require any information relating to the country of mining of the imported cut diamond. Most experts agree that once a diamond has been cut and polished, it is difficult to determine the country where it was mined.

There have been a number of legislative proposals in Congress seeking to address the trade in conflict diamonds, including banning diamonds from specified countries and requiring a certification of where the diamond sought to be imported was mined. These proposals have not received the support of the Administration, largely because of concerns that they are not administrable and have the potential to harm legitimate diamond trade.

In announcing the hearing, Chairman Crane stated: “This hearing will provide the Subcommittee with an opportunity to review the options available to curtail conflict diamond trade that is World Trade Organization (WTO) consistent and does not impact legitimate diamond trade. We must break the link that makes diamonds a rebel's best friend, but we must also not harm legitimate diamond trade that is a vital link to the world's economy."

FOCUS OF THE HEARING:

The focus of the hearing will be to evaluate options available that are administrable and WTO consistent and will effectively curtail conflict diamond trade without impacting legitimate diamond trade. The Subcommittee is interested in receiving testimony on possible approaches to this issue, including testimony on current and developing technology that can determine the country of mining of a cut and polished diamond.

DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:

Requests to be heard at the hearing must be made by telephone to Traci Altman or Pete Davila at (202) 225–1721 no later than the close of business, Tuesday, September 5, 2000. The telephone request should be followed by a formal written request to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. The staff of the Subcommittee on Trade will notify by telephone those scheduled to appear as soon as possible after the filing deadline. Any questions concerning a scheduled appearance should be directed to the Subcommittee on Trade staff at (202) 225–6649.

In view of the limited time available to hear witnesses, the Subcommittee may not be able to accommodate all requests to be heard.

Those persons and organizations not scheduled for an oral appearance are encouraged to submit written statements for the record of the hearing. All persons requesting to be heard, whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline.

Witnesses scheduled to present oral testimony are required to summarize briefly their written statements in no more than five minutes. THE FIVE-MINUTE RULE WILL BE STRICTLY ENFORCED. The full written statement of each witness will be included in the printed record, in accordance with House Rules.

In order to assure the most productive use of the limited amount of time available to question witnesses, all witnesses scheduled to appear before the Subcommittee are required to submit 200 copies, along with an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, of their prepared statement for review by Members prior to the hearing. Testimony should arrive at the Subcommittee on Trade office, room 1104 Longworth House Office Building, no later than Friday, September 8, 2000. Failure to do so may result in the witness being denied the opportunity to testify in person.

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE:

Any person or organization wishing to submit a written statement for the printed record of the hearing should subm six (6) single-spaced copies of their statement, along with an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, with their name, address, and hearing date noted on a label, by the close of business, Tuesday, September 26, 2000, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Trade office, room 1104 Longworth House Office Building, by close of business the day before the hearing.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All statements and any accompanying exhibits for printing must be submitted on an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press, and the public during the course of a public hearing may be submitted in other forms.

Note: All Committee advisories and news releases are available on the World Wide Web at “http://waysandmeans.house.gov."

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202–225–1721 or 202–226– 3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

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Change in Date and Time for Subcommittee

Hearing on
Trade in African Diamonds

Tuesday, September 12, 2000

Congressman Philip M. Crane (R-IL), Chairman of the Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee hearing on trade in African diamonds, previously scheduled for Tuesday, September 12, 2000, at 10:00 a.m., in the main Committee hearing room, 1100 Longworth House Office Building, will now be held on Wednesday, September 13, 2000, beginning at 9:30 a.m.

All other details for the hearing remain the same. (See Subcommittee press release No. TR-23, dated August 10, 2000.)

Chairman CRANE. Welcome to this important hearing on conflict diamonds. I especially want to thank the witnesses, many of whom had to reschedule their plans so that they could testify. Some of you have crossed oceans to get here and I know how important this issue is to everyone present here today.

Africa is a continent of magnificent landscape, beautiful coastline, and abundant natural resources, including diamonds. Despite its abundance in natural wealth, Africa remains poor and war-torn. In order for Africa to move in the direction of economic prosperity, we must ensure that its natural wealth is not used to keep African countries fettered in rebel wars and poverty. This aim brings us to the subject of trade and conflict diamonds, which are diamonds controlled by rebel forces and traded to fuel their wars against civilians and governments, as is presently the case in Sierra Leone.

Eighty-five percent of the world's rough diamonds pass through Antwerp, Belgium, and then to central selling offices in London and other places for sale to diamond cutters. Experts everywhere agree that once a diamond is cut and polished, it is almost impossible to tell the country where the diamond was mined. To effectively end trade in conflict diamonds, the countries exporting and importing rough stones in particular must work together to make sure that these diamonds do not have a market, so that conflict diamond peddlers cannot stay in business. I am pleased that the dia

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