Rapaport Trade Warning - US Diamond Sanctions Disruption

RAPAPORT   January 16, 2023   Subject: Trade Warning   Dear Daimond,   I am writing to you out of deep concern for the future of the US diamond trade and asking you to support the Rapaport US Diamond Protocol that will enable the US government to implement Russian diamond sanctions without hurting the diamond trade. Please visit Rapaport.com/sanctions to register your support.   The US government is now urgently formulating regulations to control the import of diamonds into the US. If we do not act, new US sanction regulations may severely harm small to medium sized US diamond and jewelry companies.   This matter is urgent. The US government has agreed with the G7 group of countries that "As of 1 March 2024, a ban on Russian diamonds polished in a third country will take effect and, as of 1 September 2024, the ban will be extended to include lab-grown diamonds, jewelry, and watches containing diamonds."   The World Diamond Council (WDC) and De Beers Washington lobbyists are working to have US government regulators implement unnecessary, extensive sanction compliance regulations based on their WDC G7 Protocol. These compliance requirements are beyond the capacity of many small to medium sized jewelers and diamond traders. These new regulations designed for big companies would require small companies to document, report, and audit every diamond transaction within the US. Trade organizations would have to audit their members. If implemented the compliance regulations would force small companies out of business, reduce fair market competition, restrict US access to non-sanctioned diamonds, and restrain trade.   The key point is that effective US sanction regulations and enforcement should start, and stop, at the border. Once polished diamonds are in the US there should not be any sanction compliance requirements forced upon US companies. There should not be any restrictions or reporting requirements for diamond trading within the US.   We are asking for your support for the Rapaport US Diamond Protocol (see below). It places the burden of government regulation and enforcement on US government agencies such as US customs and not on US businesses or trade organizations.    I urge you to visit Rapaport.com/sanctions and register your support for the Rapaport US Diamond Protocol now.    We believe the best way forward is to present the US Diamond Protocol to the US regulators and to work with them to ensure honest, effective, and efficient US regulations that restrict the flow of sanctioned Russian diamonds into the US without harming our trade. Above all else and everyone else, we must protect the interests of the US diamond and jewelry trade.   Let's work together to protect our trade.   Martin Rapaport   Chairman   RAPAPORT THE RAPAPORT US DIAMOND PROTOCOL   October 31, 2023   Section 1.     All diamonds imported into the United States will require the following declarative statement by the importer and exporter:  "To the best of my knowledge the diamonds being imported have not been sourced from any US sanctioned entity."  Note: "sourced" diamonds include diamonds purchased from a sanctioned entity that have been substantially transformed by non-sanctioned entities. This includes diamonds purchased from Alrosa and manufactured outside of Russia.  US Customs or another designated government authority may maintain a list of companies allowed to export or import diamonds into the US.   Section 2.     In the event the US government wishes to implement a tracing capability for the import of diamonds into the US, the following protocols should be implemented:  All diamonds imported into the US shall have a unique US Blockchain Identification Number (USBIN) that links to the following information related to the import: name of blockchain; name of mining company; name of diamond manufacturer; import carat weight; import US$ value; invoice trail of diamonds from mine to importer, listing the names of all companies that have transacted the diamonds.  The USBIN must be prominently displayed in a clear tamper–proof sealed bag containing the diamonds. For the purpose of import, the blockchain information will be restricted to government auditing entities.  All diamonds already in the US may be entered into a government–approved blockchain and assigned a USBIN by the company exporting the diamonds from the US. Such diamonds may be reimported into the US using the USBIN.  It is the responsibility of US government designated entities such as US Customs and/or Office of Foreign Asset Control to audit and approve acceptable diamond blockchains, as well as to designate entities that are allowed or not allowed to be included in the USBIN supply chain.   Once polished diamonds are in the US, there are no restrictions on their trade or statements required on any invoices. Other countries, such as members of the G7, may or may not accept the US Diamond Protocol and US-USBIN for the importation of diamonds into their country.   Rapaport USA Inc., 133 East Warm Springs, Las Vegas, Nevada 89119, USA, 702-893-9400 Unsubscribe Manage preferences