OFAC Issues Final Rule Revising the Rough Diamonds Control Regulations
The Office of Foreign Assets Control (OFAC) has issued a final rule, effective September 23, 2004, in order to revise certain reporting and recordkeeping requirements contained in the Rough Diamonds Control Regulations (RDCR, 31 CFR Part 592).
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The RDCR carry out the purposes of Executive Order (EO) 13312 of July 29, 2003. EO 13312 was issued pursuant to the Clean Diamond Trade Act (CDTA) and implemented the U.S. government's participation in the Kimberley Process Certification Scheme (KPCS), and banned the trade of rough diamonds not controlled through the process.
(The purpose of the KPCS is to prevent the import and export of "conflict diamonds" which are rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments.)
Highlights of Final Rule's Changes to RDCR
OFAC states that based on its experience and that of other agencies that also participate in the implementation and administration of the CDTA and KPCS, this final rule revises 31 CFR Part 592 in the following respects (partial list):
Kimberley Process Certificate number must be reported in ABI or on Customs Form 7501 (starting November 1, 2004). OFAC is adding Note 3 to 31 CFR 591.301 to reflect a pending U.S. Customs and Border Protection (CBP) requirement that, effective November 1, 2004, customs brokers, importers, and filers making entry of a shipment of rough diamonds either: (1) submit through CBP's Automated Broker Interface (ABI) system the unique identifying number of the Kimberley Process Certificate accompanying the shipment or, (2) for non-ABI entries, indicate the Certificate number on the Customs Form 7501 Entry Summary at each entry line.
Ultimate consignee must retain Kimberley Process Certificate. OFAC has made certain changes to 31 CFR 592.301(a)(1) in order specify that the ultimate consignee reported on the Customs Form 7501 Entry Summary or its electronic equivalent filed with CBP is responsible for retaining the original Kimberley Process Certificate for a period of at least five years from the date of importation.
Ultimate consignee must report receipt of shipment. 31 CFR 592.301(a)(3) is also revised to specify that the ultimate consignee reported on the Customs Form 7501 Entry Summary or its electronic equivalent filed with CBP is the person responsible for reporting receipt of the shipment to the foreign exporting authority. This revised paragraph also now requires that the ultimate consignee report this information to the foreign exporting authority within 15 calendar days of the date that the shipment arrived at a U.S. port of entry.
Country-of-origin reporting requirements for mixed origin shipments. 31 CFR 591.307 is revised to clarify that a shipment including a parcel of mixed-origin rough diamonds is to be entered into the U.S. with the Kimberley Process Certificate validated by the relevant exporting authority, and the certificate need not indicate the countries of origin of the diamonds.
With respect to such shipments, OFAC is adding a note to 31 CFR 591.307(b) to state that the country-of-origin field must be filled with asterisks. This note also advises that the shipment must still comply with all other country-of-origin reporting requirements imposed by law.
Miscellaneous additional changes. In addition to the four changes described above, OFAC's final rule also: revises 31 CFR 592.602 to reflect properly the basis upon which the Director of OFAC may decide to issue a pre-penalty notice; revises the definition of 'effective date' at 31 CFR 592.302 so that 31 CFR 592.301(a)(3) is effective September 23, 2004 (all other provisions of 31 CFR 592 were effective at 12:01a.m. EDT, July 30, 2003); revises 31 CFR 592.801 to reflect the Office of Management and Budget's (OMB) issuance of three control numbers authorizing collections of information in the regulations; etc.
(See ITT's Online Archives or 08/01/03 and 08/06/03 news, 03080110 and 03080610, for BP summaries of EO 13312 and OFAC's interim final rule, respectively.)
OFAC Contacts - Chief of Policy Planning and Program Management (202) 622-4855
Chief Counsel (202) 622-2410
OFAC Interim Final Rule (FR Pub 09/23/04) available athttp://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-21329.pdf