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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Rough Diamond Trader Registration Circulars

24 - hour hotline : 2392 2922

e-mail address : enquiry@tid.gov.hk

23 December 2002

Ref : GL250

Dear Sirs,

Trade and Industry Department Circular

Control on Rough Diamonds in Hong Kong

I. INTRODUCTION

Hong Kong will implement a certification scheme for rough diamonds[1] (the Certification Scheme). We plan to commence implementation of the Certification Scheme as from 2 January 2003, or as soon as possible thereafter, subject to the process for clearing the necessary legislative amendments. This circular informs the trade early of the details about the implementation arrangements.

II. DETAILS

Background

2.The Certification Scheme has been developed by the Kimberley Process (KP), an international negotiating forum that seeks to stop trade in "conflict diamonds" [2] from fuelling armed conflicts, activities of rebel movements and illicit proliferation of armament. Some 40 economies including all of Hong Kong's major trading partners in rough diamonds such as Belgium, Mainland China, India, Israel, South Africa, the United Arab Emirates, the United Kingdom and the United States, have been participating in the KP and will implement the Certification Scheme.

3.The main implementation features of the Certification Scheme were finalised by the KP at its recent meeting held in Switzerland on 5 November 2002. Each Participant of the Certification Scheme should, among other things :

  1. ensure that no shipment of rough diamonds is imported from, or exported to, a non-Participant;
  2. require that each shipment of rough diamonds exported to, and imported from, a Participant is accompanied by a duly validated KP Certificate;
  3. establish a system of internal controls designed to eliminate the presence of "conflict diamonds" from shipments of rough diamonds imported into, and exported from, its territory;
  4. ensure that its process for issuing KP Certificates and the Certificates meet the specified minimum standards and requirements;
  5. ensure that rough diamonds in transit or transhipped through its territory leaves its territory in an identical state as they entered its territory (i.e. unopened and not tampered with);
  6. amend or enact, as required, legislation to implement and enforce the Certification Scheme and to maintain dissuasive and proportional penalties for transgressions; and
  7. collect and maintain relevant official production, import and export data, and collate and exchange such data.

In addition, Participants are recommended to register all diamond buyers, sellers, exporters, agents, and courier companies involved in carrying rough diamonds and require them by law to keep, for a period of five years, daily buying, selling or exporting records.

The Certification Scheme in Hong Kong

4.The Trade and Industry Department (TID) and the Customs and Excise Department (C&ED) will be designated as the importing and exporting authorities of the People's Republic of China (PRC) for the purposes of implementing the Certification Scheme in Hong Kong. The control schemes of the Mainland and Hong Kong, however, will be completely separate.

5.The legislative amendments to implement the Certification Scheme in Hong Kong were gazetted on 29 November 2002 and tabled at the Legislative Council for vetting on 4 December 2002. Subject to the process for clearing the necessary legislative amendments, the Certification Scheme will commence on 2 January 2003 or shortly later. We shall issue a separate circular to inform the trade once the commencement date is confirmed.

6.The Certification Scheme in Hong Kong will comprise a registration system for rough diamond traders and a certification system for the imports and exports of rough diamonds. Details are set out in the following paragraphs.

(A) Registration of Rough Diamond Traders

7.All parties carrying on a business of importing, exporting, carryingNote (including carrying rough diamonds in transit and transhipment), buying or selling rough diamonds must be registered with TID and comply with certain requirements. The registration is on a biennial basis, that is valid for 2 years. Registration form is at Annex 1 (pdf format). Duly completed forms may be returned by hand or by mail, together with the required supporting document(s) to the Non-Textiles Licensing Unit of TID (12/F, Trade and Industry Department Tower, 700 Nathan Road, Kowloon, Hong Kong)Note. If the registration form is found to be completed in order, TID will inform the trader in writing of the registration number assigned to him one clear working day after lodgement of the application and payment of the registration fee.

8.The fee for a new registration is HK$840Note. The fee may be paid by cheque, in cash, or through the Easy Pay System (EPS) provided by the Electronic Payment Services Company (HK) Ltd at the Collection and Form Sales Office (Room 104, 1/F, Trade and Industry Department Tower, 700 Nathan Road, Kowloon, Hong Kong)Note. For payment made by cheque, traders should ensure that the cheques can be drawn upon the relevant accounts. Otherwise, the commencement of the validity period of the registration will be deferred until the payment is received. Payment should be made before the registration form is lodged for processing. Payment procedures are at Annex 2 (pdf format). Registration is renewable upon expiry and the renewal fee is HK$595Note.

9.If traders consider that they may have to trade in rough diamonds once the Certification Scheme commences, they may send in their registration forms to TID from 23 December 2002 for our early processing. The registration will only be valid from the date of commencement of the Certification Scheme.

10.A registered rough diamond trader is required to report immediately to TID in writing any change in the registration particulars declared in the registration form or any change in the status of business. A registered rough diamond trader who carries on a business of importing, exporting, buying or selling (not including carrying, for carriers, please see paragraphs 25 to 27) rough diamonds is further required to keep for five years an accurate and up-to-date record of his daily import, export, purchase and sale of rough diamonds from the day on which it is made with the following details :

  1. the name of each person from or to whom the trader buys or sells the rough diamonds and (if that person is also a registered rough diamond trader) that person's registration number;
  2. the amount and value of rough diamonds imported, exported, bought, or sold; and
  3. such other particulars as the Director-General of Trade and Industry (DGTI) may require.

    All registered rough diamond traders may also be required to lodge such returns or notifications relating to the import, export, purchase and sale of rough diamonds as DGTI may require. Authorised officers of the C&ED may conduct inspection at the premises of the registered rough diamond trader to ensure that the registration particulars are valid and books and records are properly kept.

(B) Import and Export Certificates

11.With effect from the commencement date of the Certification Scheme in Hong Kong, KP Certificates issued by TID must be obtained before the import and export of rough diamonds. No person, whether as agent or otherwise, shall import rough diamonds from, or export rough diamonds to a country or place other than the countries or places for which the Certification Scheme is effective or as permitted by the KP. The list of such countries and places will be added to the Seventh Schedule to the Import and Export (General) Regulations (Cap. 60 subsidiary legislation). A tentative list is at Annex 3 (pdf format) for reference. Any amendment to the list will be published in the Gazette and we shall further issue a circular to inform the trade.

12.Application for the import and export Certificates must be made on specified forms determined by DGTI. Specimen of the KP Certificates, namely, "Kimberley Process (KP) Certificate (Import)" and "Kimberley Process (KP) Certificate (Export)" are at Annexes 4  and 5 (pdf format). The forms will be available for sale at TID's Collection and Form Sales Office (address mentioned in paragraph 8 above)Note. Applications are to be lodged with Non-Textiles Licensing Unit of TID (address mentioned in paragraph 7 above)Note when the Certification Scheme is implemented.

13.Fees for the KP Certificate (Import) and KP Certificate (Export) are HK$175Note and HK$200Note respectively payable on issue of the Certificates. The fees may be paid in cash, through the Easy Pay System (EPS) or by affixing adhesive postage stamps or franking impressed postage stamps of the relevant value on the Certificates when the Certificates are collected on issue. Applications with postage stamps affixed or impressed postage stamps franked will not be processed by the Department and will be returned to the trader.

14.Under normal circumstances and provided that the application lodged is in order, an importer or exporter can, upon payment of the prescribed certification fee, obtain his KP Certificates from TID one clear working day after lodgement of the application, i.e., on Day 3 if the application is lodged on Day 1.

15.The KP Certificate (Import) and KP Certificate (Export) issued by TID are valid for 28 days. Extension of the validity period may be granted, such as in the case of delay in shipment from the exporting country or place. Justifications and documentary evidence will be required to support the request as appropriate. Detailed guidelines on how to complete the KP Certificate (Import) and KP Certificate (Export) will be available when the Certification Scheme is implemented.

Import Process

16.An importer must obtain a KP Certificate (Import) issued by TID before importing any consignment of rough diamonds. The application must be supported by a copy of the KP Certificate issued by the Exporting Authority of the last country of provenance unless the requirement has been waived by DGTI.

17.The declared importer on the KP Certificate (Import) must comply with the Conditions of Issue set out at the back of the Certificate and any other Conditions of Issue as promulgated by DGTI in circulars from time to time. The KP Certificate (Import) will be issued in three copies. The original will be kept by TID. The duplicate will be for the importer's retention. In case of subsequent local sales of the rough diamonds imported, the importer shall provide the buyer with a copy of the duplicate of the relevant KP Certificate (Import). Sensitive commercial information in the copy of KP Certificate (Import) provided to the buyer such as the name and address of the consignor outside Hong Kong, name and address of the importer (including the importer's declaration) and value of the rough diamonds may be blotted out. The triplicate of the KP Certificate (Import) will be the carrier's copy. The importer shall deliver the triplicate to the carrier for release of the rough diamonds imported. TID will inform the importer at the time of issuing a KP Certificate (Import) whether inspection of the consignment by the Customs and Excise Department (C&ED) is required by stamping a chop on the KP Certificate (Import). For consignments requiring inspection, the importer needs to make arrangement with C&ED for inspection of the consignment at the premises specified by him as soon as possible but not later than seven working days after importation.

18.The importer is also required to return to TID by hand or by mail, within 10 working days after importation, the original KP Certificate issued by the Exporting Authority of the last country of provenance. In the case when a KP Certificate from the last country of provenance is not available, TID may request the importer to return the relevant shipping documents such as bills of lading, packing lists, invoices and other documents to confirm the actual importation of the consignments into Hong Kong. The relevant number of the KP Certificate (Import) should be quoted on the returned documents for reference.

Export Process

19.An exporter must obtain a KP Certificate (Export) issued by TID before exporting any consignment of rough diamonds. The application for KP Certificate (Export) must be supported by a copy of the relevant KP Certificate (Import) issued by TID unless the requirement has been waived by DGTI [3]. The total carat weight/mass of the rough diamonds to be exported should not exceed that covered by the supporting KP Certificate (Import).

20.The declared exporter on the KP Certificate (Export) must comply with the Conditions of Issue at the back of the Certificate and any other Conditions of Issue as promulgated by DGTI in circulars from time to time. The KP Certificate (Export) will be issued in four copies. The rough diamonds to be exported will be accompanied by the original of the KP Certificate (Export). The duplicate will be for the exporter's retention. The triplicate of the KP Certificate (Export) will be the carrier's copy. The exporter shall deliver the triplicate to the carrier for arranging export of the rough diamonds concerned. The quadruplicate will be kept by TID. TID will indicate to the trader at the time of issuing a KP Certificate (Export) whether inspection of the consignment by C&ED is required by stamping a chop on the KP Certificate (Export) (all copies except the original). The exporter shall not effect the shipment of an export consignment in the absence of TID's indication that inspection is not required or where inspection by C&ED is required, before the inspection. If inspection is required, the exporter shall make arrangement with C&ED, at least three working days before exportation, for inspection of the consignment at the premises specified by him. The exporter shall ensure among other things that the shipment of rough diamonds is accompanied by the original of the KP Certificate (Export) issued by TID. Where C&ED's inspection is required, the exporter shall produce to the carrier the triplicate of the KP Certificate (Export) bearing C&ED's endorsement that the consignment has been inspected.

Amendment and Cancellation of Certificates

21.Importers or exporters must make requests for amendment or cancellation of KP Certificate (Import) and KP Certificate (Export) with DGTI if the goods imported or exported do not accord with those stated on the Certificates. KP Certificates which are not used must be returned to DGTI for cancellation.

Consignment Inspection

22.Authorised officers of C&ED will conduct inspections on import and export consignments of rough diamonds. The importer or exporter should contact C&ED at tel. no. 2231 4184 or 2231 4151 to make arrangements for the inspection. Authorised officers of C&ED will conduct inspections at the premises specified by the importer or exporter. The inspection will be conducted within two clear working days after the trader has contacted C&ED. That is, the inspection will be conducted by Day 3 if the importer contacts C&ED on Day 1. If necessary, C&ED may arrange for experts to help verify the quality and origin of the rough diamonds. During the inspection process, C&ED will only disclose to experts the information which is necessary for the purpose of ensuring compliance with the KP requirements.

23.In the case of import, the importer shall produce for C&ED's inspection the imported rough diamonds, the KP Certificate issued by the last country of provenance where applicable and any documents relating to the purchase, import, delivery and payment of the goods such as books and records, ordering documents, delivery records and payment records. In the case of export, C&ED will endorse and validate on the duplicate (exporter's copy) and triplicate of the KP Certificate (Export) after inspection. The exporter shall seal the container in the presence of C&ED officers before export.

24.Notwithstanding TID's indication on the KP Certificates that inspection of a consignment is not required, the consignment might, at an import or export control point, still be selected by C&ED for inspection. If C&ED suspects that an importer or exporter has breached the requirements for the import of rough diamonds, it may seize or detain the goods for further investigation.

Rough Diamonds in Transit or Transhipment

Rough Diamonds in Transit or as Air Transhipment CargoNote

25.A registered carrier, courier or freight forwarder will not need to obtain a KP Certificate (Import) and KP Certificate (Export) in respect of a consignment of rough diamonds in transit [4] or as air transhipment cargo [5], provided that the rough diamonds are sealed in a container, the container has not been tampered with, and the seals on the container remain intact.

Other modes of transhipment of rough diamondsNote

26.Transhipment of rough diamonds by other modes covered by through bill of lading or through airway bill may be exempted from certification requirements, provided that the handlers have been registered with TID as rough diamond traders, have applied for transhipment exemption and comply with the Conditions of Exemption at Appendix to Annex 1 (pdf format). Among other things, the rough diamonds are required to be sealed in a container, the container has not been tampered with, and the seals on the container remain intact. The monthly notifications on consignments transhipped at Annex 6 (pdf format) must be filed with TID.

27.C&ED will select consignments of rough diamonds in transit or transhipment for inspection on a random basis.

Rough Diamonds Brought into Hong Kong before Commencement Date of the Certification Scheme

28.There may be consignments of rough diamonds that have been brought into Hong Kong before the commencement date of the Certification Scheme in Hong Kong and not covered by KP Certificate from the last country of provenance. To obtain the KP Certificate (Export), the exporter needs to prove that the rough diamonds have indeed been brought into Hong Kong before the commencement of the Certification Scheme from a legitimate source, i.e. countries or places permitted by the KP. In this regard, shipping documents like bills of lading, packing lists, invoices, etc. can be accepted as documentary proof.

III. IMPORTANT NOTES AND WARNING

29.TID works closely with C&ED to enforce the implementation of the Certification Scheme in Hong Kong. Legal and/or administrative actions will be taken against any traders concerned in the event that any conditions of issue/certification conditions or certification requirements are not fulfilled. In this regard, any person who carries on a business of importing, exporting, buying, selling or carryingNote rough diamonds without a valid registration with TID commits an offence and will be liable on conviction to a fine of HK$100,000 and imprisonment for 1 year. A registered rough diamond trader who contravenes the record-keeping requirements will be liable on conviction to a fine of HK$200,000 and to imprisonment for 1 year. A person who imports rough diamonds from, or exports rough diamonds to, a country or place other than a specified country or place; or who imports/exports rough diamonds without a valid KP Certificate (Import)/a valid KP Certificate (Export) or not in accordance with any of the conditions for the issue of the Certificate/ any other certification conditions imposed by DGTI, will be liable on conviction to a fine of HK$500,000 and to imprisonment for 2 years.

30.To ensure that the conditions of rough diamonds transhipment exemption are complied with, documentation checks on books and records and manifests as well as physical checks on rough diamond consignments and visits to the premises of registrants will be carried out by authorised officers of the two Departments. TID takes a serious view on traders breaching any of the conditions of exemption. A registered rough diamond trader who contravenes or fails to comply with any of the conditions of exemption, commits an offence and is liable on conviction to a maximum fine of HK$500,000 and to imprisonment for 2 years. DGTI may also by notice in writing revoke or suspend any exemption granted to the trader or may amend any condition.

31.TID also reserves the right to disclose to third parties either in Hong Kong or elsewhere all or any of the information provided by traders in their applications for registration as rough diamond traders, their KP Certificate (Import) and KP Certificate (Export) and relevant information and returns/notifications provided pertaining to the control on rough diamonds in Hong Kong for the purposes of or in connection with the exercise or performance of any of the powers or duties under the legislation; the implementation of the international scheme for rough diamonds; or the institution of criminal proceedings under the legislation.

IV. ENQUIRIES

32.If you have any enquiry about the contents of this circular, please contact the following:

Contact Point Telephone No.
Non-Textiles Licensing Unit
Mr Daniel Yuen
Miss Susanna Suen		 2398 5557
2398 5486
2398 5485

Yours faithfully,

(Miss Susanna Suen)
for Director-General of Trade and Industry

Note: With effect from 15 May 2006, the registration requirement on owners-cum-carriers has been lifted (please click here for details). With effect from 27 March 2008, the fees related to rough diamonds control have been revised (please click here for details). With effect from 28 April 2015, rough diamond traders may download application forms for the KP Certificates (Import) and KP Certificates (Export) from the TID website (please click here for details). With effect from 5 October 2015, some of the public service counters of the TID have been relocated (please click here for details).

Distribution

Diamond Federation of Hong Kong, China Ltd

Hong Kong Jewellers' & Goldsmiths' Association Ltd

Hong Kong Jewellery & Jade Manufacturers Association

Hong Kong Jewelry Manufacturers' Association

Rough Diamond Traders in Hong Kong

Consulates and Consulates-General in Hong Kong

Trade Commissions and Chambers of Commerce

Trade and Industrial Associations

Shipping Companies, Airlines, Other Carriers and Freight Forwarders

Note 1: "Rough diamonds" means diamonds that are unworked or simply sawn, cleaved or bruted and fall under the Hong Kong Harmonisation System Codes 7102 1000, 7102 2100 and 7102 3100 under the heading 7102 in the Hong Kong Imports and Exports Classification List (Harmonised System) issued by the Commissioner of Customs and Excise (as amended from time to time).
Note 2: "Conflict diamonds" is defined under the Certification Scheme developed by the Kimberley Process to mean rough diamonds used by rebel movements or their allies to finance conflicts aimed at undermining legitimate governments, as described in relevant United Nations Security Council (UNSC) resolutions insofar as they remain in effect, or in other similar UNSC resolutions which may be adopted in the future, and as understood and recognized in United Nations General Assembly (UNGA) Resolution 55/56, or in other similar UNGA resolutions which may be adopted in future.
Note 3: TID will waive this requirement if the exporter can prove that the rough diamonds have been brought into Hong Kong before the commencement date of the Certification Scheme in Hong Kong from a legitimate source. Please see paragraph 28 for more information relating to rough diamonds brought into Hong Kong before the commencement date of the Certification Scheme in Hong Kong.
Note 4: Under the Import and Export Ordinance (Cap. 60 of the Laws of Hong Kong), an article in transit means an article which is brought into Hong Kong solely for the purpose of taking it out of Hong Kong and remains at all times in or on the vessel or aircraft in or on which it is brought into Hong Kong.
Note 5: Under the Import and Export Ordinance (Cap. 60 of the Laws of Hong Kong), air transhipment cargo means an article that is both imported and consigned for export in an aircraft and which, during the period between its import and export, remains within the cargo transhipment area of the Hong Kong International Airport.