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Vaaldiam's Commitment to the Kimberley Process Certification Scheme
Vaaldiam Mining Inc. complies with the
Kimberley Process Certification Scheme (“KPCS”).
What is the KPCS?
In December 2000, the General Assembly of
the United Nations unanimously passed a resolution calling
for the establishment of a procedure which would certify
that rough diamonds traded internationally had not been sold
in order to finance armed conflict. Rough diamonds sold to
finance armed conflict became known as "conflict diamonds"
or "blood diamonds". The KPCS, implemented in January 2003,
was the international response to the United Nations
resolution.
The KPCS is designed to provide assurance
to the ultimate purchaser of a diamond, as well as those
intermediaries such as diamond cutters, diamond dealers and
selling organizations, that by purchasing a particular
diamond they have in no manner contributed to armed conflict
in the diamond's country of origin or anywhere else. The
KPCS is therefore meant to provide a chain of assurance
stretching from the miner of a particular rough diamond to
the ultimate purchaser of a faceted stone.
The KPCS requires a Kimberley Process
Certificate (the "Certificate") to be prepared and which
must accompany each export shipment of rough diamonds. Each
Certificate must state the country of origin of the diamonds
being shipped, the issuing authority for the Certificate,
the date of issue of the Certificate, the identification of
the exporter and the importer, the number of carats in the
parcel and the value of the diamonds. All diamonds shipped
in accordance with the KPCS must be in tamper and forgery
resistant containers. Validation of the Certificate by the
authorized Exporting Authority (the "Exporting Authority")
is required. No participant country can export to, or
receive diamonds from, a non-participant country. The KPCS,
therefore, seeks to create a closed system for legitimate
diamond trading, from which conflict diamonds are excluded.
Who Participates in the KPCS?
Some 47 countries, known as
Participants, have agreed to participate in the KPCS,
including Canada, Brazil, the European Union, the Central
African Republic, the United States, Botswana and South
Africa. Each Participant in the KPCS has undertaken to
establish a system of internal controls designed to
eliminate the presence of conflict diamonds, to designate an
Importing and Exporting Authority, to amend or enact
appropriate laws or regulations to implement and enforce the
KPCS, to maintain dissuasive and proportional penalties for
transgressions and to maintain and exchange a database with
other Participants.
Participants are encouraged to ensure
that all diamond mines are licensed and to allow only those
mines so licensed to mine diamonds. In addition,
Participants are encouraged to require prospecting and
mining companies to maintain effective security standards to
ensure that conflict diamonds do not contaminate legitimate
production. The KPCS recommends that all diamond buyers,
sellers, exporters, agents and courier companies involved in
carrying or handling rough diamonds, be registered by each
Participant's relevant authorities.
How are Diamonds Imported and Exported under the KPCS?
Regarding the export process, the KPCS
recommends that an exporter should submit a rough diamond
shipment to the relevant Exporting Authority which will
require the exporter to provide a declaration that the rough
diamonds being exported are not conflict diamonds. The
Exporting Authority is expected to have sufficient expertise
and knowledge of the exporter's operations to evaluate the
correctness of the exporter's declaration.
Rough diamonds for export should be
sealed in a tamper resistant container together with the
Kimberley Process Certificate or a duly authenticated copy.
The Exporting Authority should then transmit a detailed
e-mail message to the relevant Importing Authority
containing information on carat weight, value, country of
origin, importer and the serial number of the Certificate.
The Importing Authority should receive the e-mail message
from the Exporting Authority either before or upon arrival
of a rough diamond shipment. The Importing Authority should
open and inspect the shipment to verify that the seals and
the container have not been tampered with and that the
export was performed in conformity with the Certification
Scheme. The Importing Authority should then send the return
slip or import confirmation coupon to the relevant Exporting
Authority. All participants are recommended to maintain a
statistical database of diamond imports and exports which
data are to be made available for analysis by the
Participants and other interested parties.
Brazil and the KPCS
In the case of the export of diamonds
from Brazil, the Brazil Kimberley Process Certificate or
Certificado do Processo de Kimberley is issued by the
Departamento Nacional do Producao Mineral (DNPM) which is a
department of the Ministerio do Minas e Energia. The Brazil
Certificate certifies that the unpolished diamonds in the
consignment have been handled in accordance with the
provisions of the KPCS for rough diamonds. The Certificate
describes the number of carats in the shipment, their value,
the country of origin, the purpose of the shipment, the
importer and exporter, the number and date of issue and
expiry of the Certificate. Finally, the Certificate is
signed by both the Director-General of the DNPM and the Head
of the DNPM in the district from where the diamonds were
mined.
In the case of a shipment of diamonds
from Brazil to Canada the Brazil Kimberley Process
Certificate is stamped on arrival in Canada by the Canada
Border Services Agency and the appropriate Excise and Goods
and Services Taxes are paid by the importer.
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