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U.A.E. Kimberley Process 2011 Annual Report

• The Kimberley Process Certification Scheme is implemented in the U.A.E. by the Ministry of Economy. The U.A.E. federal law that adapts and implements the Kimberley Process Certification Scheme is the ‘Union Law No (13) of 2004 regarding Supervision of Import/Export and Transit of Rough Diamonds.’

• The UAE Ministry of Economy delegated the task to implement the

Kimberley Process Certification Scheme in the U.A.E.to Dubai Multi Commodities Center Authority ‘DMCCA’ as the only entry and exit point for rough diamonds in the U.A.E (for all of the seven Emirates)

Contact Details Import/Export Authority:

U.A.E Kimberley Process Office Dubai Multi Commodities Center Dubai Airport Free Zone Emirates Security Building Block B, 2nd Floor, Office # 20 P.O. Box 48800, Dubai, UAE Telephone: +9714 299 6639 Fax: +9714 299 6396 Email: Kimberley.process@dmcc.ae Website: http://www.dmcc.ae/jltauthority/diamond/uae-

kimberley-process/

U.A.E Kimberley Process Office Dubai Multi Commodities Center Almas Tower, Level 2 Jumeirah Lakes Towers, P.O. Box 48800, Dubai, UAE Telephone: +971 4 4336713 Fax: +971 4 3751900 Email: Kimberley.Process@dmcc.ae Website: http://www.dmcc.ae/jltauthority/diamond/uae-

kimberley-process/

Contact Person: Maryam Al Hashemi UAE Kimberley Process Director

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The U.A.E. adopted the Kimberley Process Certification Scheme on the federal level (State Cabinet 120/11, 2003). The Kimberley Process law is titled ‘Union Law No (13) of 2004 regarding Supervision of Import/Export and Transit of Rough Diamonds.’

There have been no changes

Outgoing shipments:

What is the procedure for issuing KP certificates?(Section II (b))

All U.A.E Kimberley Process exporters are required to register at the UAE K.P Office by submitting the completed Stock Declaration Form before starting their trade. (Refer to page System of Internal Control and Industry Self Regulation.)

1. U.A.E KP Coordinator must check if the exporter is registered with the UAE KP

Office.

2. U.A.E KP Coordinator must ensure that the rough diamond shipment is being exported to a KP Participant Country.

3. Exporter must provide to the U.A.E KP Coordinator a valid invoice reflecting

the UN Resolution to ensure that the rough diamonds are conflict free.

4. Exporter is required to submit the Kimberley Process Certificate number under which the rough diamonds were imported or the supporting documents of the local purchase.

5. U.A.E KP Coordinator must check the physical carat weight of the rough

diamond shipment and ensure that it tallies with the carat weight reflected on the invoice.

6. U.A.E KP Coordinator shall conduct an independent valuation of the export

parcels on an ad hoc basis.

7. The U.A.E KP Coordinator places the parcels of rough diamonds in the tamper proof bag.

8. U.A.E KP Coordinator issues and endorses the U.A.E. KP certificate. The UAE

KP Certificate reflects the serial number of the tamper proof bag (Refer D-e: Tamper proof bags)

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9. In the same tamper proof bag as the rough diamonds the U.A.E KP Coordinator places the original UAE KPC and invoice. The tamper proof bag is then sealed.

10. As an added security feature, a U.A.E KP Security seal is used for the rough

diamond shipment.

11. In case of hand carried rough diamonds, the exporter is required to provide the passport copy, ticket copy and letter of authority for the passenger who will be hand carrying the shipment

12. U.A.E KP Files:

U.A.E KP Administrative Coordinator is required to maintain the following information:-

• Database with details of all the certificates exported from the U.A.E.

• Copy of the Export KP certificate • A copy of the Bill of Export issued by the U.A.E Customs (which is

handed over by the handling agent / passenger). • Letter of Authority handed over by the exporter to the handling

agent/passenger. • The tamper proof bag slip

13. U.A.E KP Coordinator will send an advance notice of shipments by e-mail to

the relevant Importing Authority Does the KP certificate fulfill the security features and requirements set out in Annex I of the JPCS document and as per the attached checklist? (Section II (c))?

The U.A.E Kimberley Process Certificate meets all the minimum requirements for the K.P.C as per Annex I and the optional certificate elements and procedures.

A. Minimum requirements for Certificates:

• Kimberley Process Certificate as the title. • UN Declaration “The rough diamonds in this shipment have been

handled in accordance with the provisions of the Kimberley Process Certification Scheme for rough diamonds”.

• U.A.E K.P.C is printed in English Language. • Unique numbering with the Alpha 2 country code, according to ISO

3166-1 • Tamper and forgery resistant. • Date of issue. • Date of expiry. • Issuing Authority. • Identification of exporter and importer. • Country of Origin. • Number of parcels in shipment. • Carat weight/mass. • Value in USD • Relevant Harmonized Commodity Description and Coding System. • Validation of Certificate by the Exporting Authority.

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B. Optional Certificate Elements:

- A recommended import confirmation with the following elements:

• Country of destination • Identification of importer • Carat/weight and value in US$ • Relevant Harmonized Commodity Description and Coding System. • Date of receipt by Importing Authority. • Authentication by Importing Authority.

What evidence does an exporter have to provide in order to prove that the rough diamonds being exported have been handled in accordance with the KP and are not conflict diamonds? (Section IV (a) and Recommendation 18)?

1. Importers and exporters declaring Rough Diamond Stock are requested to submit supporting documents attesting the source of the rough diamonds by presenting a copy of the Customs Bill of Entry or a Copy of the imported Kimberley Process Certificate.

2. Exporters who purchased the rough diamonds from the local market must

present the local purchase invoice mentioning the Import Certificate Number or a copy of the Seller’s Bill of Entry.

3. UN Declaration “The rough diamonds in this shipment have been handled in

accordance with the provisions of the Kimberley Process Certification Scheme for rough diamonds” must be reflected on the invoice.

How many Kimberley Process Certificates were issued? To which participants were the KP certificates issued actually sent?

In the year of 2011: 4912 KPCS Participants where the U.A.E KPC were sent to:

- China - Armenia - E.U.(Belgium & Sweden) - Dem Rep of Congo - USA - Switzerland - Czech Republic - Russia - Thailand - Lebanon - Botswana - HK - Ukraine - UK - India

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- South Africa - Sri Lanka

Based on recommendations – reply is optional:

1. Are rough diamonds sealed in a tamper proof container together with the Certificate or a duly authenticated copy? (Recommendation 19)

The rough diamonds are sealed in a tamper proof bag along with the Original UAE KP Certificate and the Original invoice.

2. Is the exporting authority sending advance notice of shipments by e-

mail to the relevant Importing Authority contained information on the carat weight, value, country of origin or provenance, importer and the serial number of the Certificate? (Recommendation 19)

Yes

3. Does the Exporting Authority record all details of rough diamond

shipments on a computerized database? (Recommendation 19)

Yes. Incoming shipments

On the arrival of the rough diamond shipment into the U.A.E it remains in the custody of:

a) Handling Agent- when shipment is received by Cargo

OR b) The U.A.E Customs Authority and Jurisdiction – when the shipment is

hand carried by the passenger or through alternative custom domains (eg. Post Office, Sea Vessel, Ground Transportation).

Until the below import procedure is followed at the U.A.E KP office :

1. U.A.E KP Coordinator must check that the rough diamond shipment is

exported from a KP Participant country.

2. U.A.E KP Coordinator must check that the importer is registered with the U.A.E KP Office.

3. A valid invoice must be presented to the U.A.E KP Coordinator

4. A valid passport copy, ticket copy and boarding pass copy of the passenger

must be presented to the UAE KP Coordinator for hand carry shipment.

5. U.A.E KP Coordinator must verify a. The rough diamond shipment has not been tampered with b. Original KP Certificates must accompany the rough diamond parcel

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c. Details (Importer/ exporter name, Issue/expiry date, carats & USD value etc) reflected on the Original KPC must be the same as that on the Original invoice.

In case of non compliance, the parcel of rough diamonds will then be kept in the custody of handling agent/UAE Customs Authority until a thorough investigation is conducted.

6. U.A.E KP Coordinator will check if an advance notice of shipments by e-mail is

received from the relevant Exporting Authority

7. U.A.E KP Coordinator must verify the physical weight of the rough diamond shipment with that reflected on the invoice and Original K.P.C.

8. U.A.E KP Coordinator shall conduct an independent valuation of the imported

parcels on an ad hoc basis.

9. As an added security feature, a U.A.E KP Security seal is used for the rough diamond shipment.

10. The U.A.E KP Coordinator is required to:

• Fill out the Original Import Confirmation Slip on the KP Certificate. • Endorse the Original Import Confirmation Slip. • A copy of the Original Import Confirmation Slip is filed with the

relevant import documents. • Send the original Import Confirmation Slip to the relevant KP

Authority specified on the slip.

11. U.A.E KP Files:

U.A.E KP Administrative Coordinator is required to keep the following information:-

• A Database of all the certificates imported into the U.A.E. • Original import KP certificate • Copy of the importer’s invoice, • Copy of the endorsed Import Confirmation Slip. • A copy of the Bill of Import issued by the U.A.E Customs Letter of

Authority handed over by the client to the handling agent/passenger.

12. After all procedures are completed, the U.A.E K.P Office hands over the

shipment to the importer, Handling Agent or the passenger.

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-Is confirmation of receipt sent to the relevant Exporting Authority (Section III (b))?

Confirmation of receipt is sent to, Angola, , Armenia, Brazil, Botswana, DRC, Russia, Liberia, Central Africa, Tanzania, South Africa, Sierra Leone, Ghana, Guyana, Guinea, Republic of Congo and Zimbabwe as per their request in their notification email. . However, the Technical Guideline 14 is sent on monthly basis to confirm receipts.

-How do you ensure that only rough diamonds with a Certificate (Section II (b)) and placed in tamper resistant containers (Section IV (c)) are imported?

UAE KP Coordinator ensures that the shipment of rough diamond is placed in the tamper resistant container. In case of suspicion of any tampering, every parcel of rough diamond is physically checked. This is done to ensure that the physical weight matches that on the Original KPC

• In case a discrepancy is noticed the parcel of rough diamonds will then be

kept in the custody of handling agent/UAE Customs Authority until a thorough investigation is conducted.

• An e-mail is sent to the relevant Exporting Authority seeking a clarification

-Where the originals of the Certificates are kept accessible? (Section III (b))

For a period of 3 months, the original import certificates are kept in the U.A.E Kimberley Process Office. Documents older than that are sent to DMCCA storage.

How many Certificates were received? From which Participants were Certificates received?

In the year 2011: 2626 KPCS were imported

Certificates were received from the following Participants:

- Belgium - Botswana - Armenia - USA - China - Brazil - ROC - Hong Kong - Angola - Guinea - Dem. Rep of Congo - Russia - UK - Sierra Leone - Thailand

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- Guyana - Switzerland - Lebanon - South Africa - Rep Central Africa - Sri lanka - Ghana - Liberia - Zimbabwe - Tanzania - India

Have there been cases of shipments which were not inconformity with the provisions of the KPCS? If so, how were these followed up by your authorities?

In case of any irregular rough diamond shipments:

a. U.A.E Customs Authorities inform the U.A.E KP Office b. U.A.E Customs Authorities send the Detained Goods Receipt and case

report to the U.A.E KP Office. c. U.A.E KP Office will conduct an independent investigation. d. U.A.E KP Office will liaise with the U.A.E Customs Authorities regarding

the results of the investigation e. Irregular rough diamond shipments will not be imported into U.A.E and

will remain in the custody of U.A.E Customs Authorities

(Based on recommendations – reply is optional :)

System of internal control for the U.A.E KP Office are as follows:

a. Stock Declaration

Upon the implementation of the Kimberley Process in January 2003, the U.A.E KP Office requested all rough diamond traders in the U.A.E. to submit their Stock Declaration as of 31st December 2002.

The U.A.E KP Office requests all rough diamond traders on an annual basis to -submit their Stock Declaration as follows

• Trade Activity Form as of 1st January xxxx to 31st December xxxx • Copy of company trade license. • Passport copy of person(s) listed on the Trade License. • Authorization letter towards the Clearing Agents • Authorization letter towards the staff representatives • Sign and acknowledge the

• System of Warranties. • Invoice requirements. • Moscow Resolution on Cote D Ivoire. • Venezuela notice. • Zimbabwe notice. • Customs notice on Cote D Ivoire.

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b. World Check

All rough diamond traders will go through the Global World Check Security Database.

c. IT & Computerized Database

To ensure the effective implementation of the KPCS, prior to the 1st January 2003, DMCCA in conjunction with Dubai Customs developed a software system whereby:

• Any shipment that enters the U.A.E. classified as rough diamonds and

under HS Codes 7102.10, 7102.21 & 7102.31, the customs officials will not be able to produce the appropriate documents (Bill of Entry/Bill of Export) unless the shipment is presented to the U.A.E KP office.

• The U.A.E KP office then enters the shipment details in a sub-system.

• The customs official is then able to produce the required customs

documents.

The system has been very effective, especially when rough diamond shipments enter the U.A.E. via unusual customs points, such as the Postal Office.

The system by default records details of all imported and exported KP certificates.

d. Security features on KP certificate

The security features on the U.A.E. KP certificate are:

i. Invisible U.V. Fiber Pattern ii. Micro Text iii. Guilloche Border Pattern iv. UV Ink v. Thermo chromic Ink vi. Fugitive Ink vii. Hologram Blocking viii. Anti-photocopying Feature ix. Penetrating Ink Serial Number x. Trellis water mark CBSI security cheque paper

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e. Tamper Proof Bags

The security features on the U.A.E. KP tamper proof bags are as follows:

i. Sentry Closure

The bags are used primarily for large quantities of rough due to the stresses of the seal area from the weight and pressure created by large volumes of diamonds and trapped air. The red fold over closure is a fracturing flap designed to shatter when attacked with freezing agents leaving evidence of tampering. These bags are approved (and accepted) by the U.S. Federal Reserve. Film is Ultra™ tri-extruded (three layer) film for maximum strength

ii. Sentry II In-Line Closure

Green void tape will display the message "VOID TAMPERING DETECTED" with any attempt to re-open at any temperature extreme. Film is Ultra™ tri-extruded for maximum strength.

f. Security Seal

As an added security feature a U.A.E KP Security Seal with a unique number is used to ensure the safety of the rough diamond shipment when transferring it for further customs clearance

The UAE rough diamond statistics were submitted in accordance with the provisions specified by Annex III of the KPCS on the KP Statistical Website. The following statistics were submitted:

• 1st , 2nd, 3rd and 4th quarters of 2003,

2004,2005,2006,2007,2008,2009, 2010 and 2011

o Import – USD & carat categorized by HS codes & countries

o Export- USD & carat categorized by HS codes & countries

o Certificate count for imports & exports

• In accordance with the KP Technical Guideline 14, the UAE KP Office sends the TG 14 on monthly basis and cross verifies the TG 14 sent by other KP participants.

• The UAE KP Office submits all the statistics according with Annex III

guidelines of KPCS.

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The U.A.E received a review visit in 2008 and the status of the recommendations is attached with the report.

I. Authentication of Ghana KPC UAE KP Office received a scanned copy of a Ghanaian KPC from a potential buyer on the 2nd Sept 2011 for verification prior to his purchase.

• Several discrepancies (list of discrepancies reflected below) were noted in the Certificate by the UAE KP Office therefore an email was sent on 4 Sept 2011 to the KP Authorities in Ghana to receive their feedback.

• KP Authorities in Ghana confirmed that the KPC was not a genuine Certificate on the 5th Sept 2011.

• Manifest List, Passport Copy and Photograph of the exporter in Ghana were sent to the Ghana KP Authorities for further investigation

List of Discrepancies

a. The Original Ghanaian KPC Serial Number is always reflected on the top of the Republic of Ghana Title, however for this fake KPC the serial number was reflected under the title.

b. There is no continuous serial number in the attached Fake KPC c. Below the title Republic of Ghana another title should reflect as Ministry of

Lands and Natural Resources whereas Ministry of Mines is reflected in the Fake KPC.

d. A grammatical error is also found in the UN resolution in the Fake KPC e. The validity of the Ghanaian KPC is usually 2 months whereas the validity of the

attached Fake KPC is 6 months. f. The security feature border of the attached Fake KPC is very different from the

Original Ghanaian KPC’s. II. Rough diamond shipment from Cyprus

Dubai Customs confiscated a rough diamond shipment that was not accompanied with a valid KP Certificate, from a passenger on 14 Feb 2010 travelling from Cyprus to India via UAE.

• The passenger approached the UAE KP Office with a not relevant KPC issued by the Indian KP Authorities. (Issue date 20th May 2010 to 19th

July 2010). • Upon continuous communication with the Indian KP Authorities it was

concluded that the KP Certificate issued from India was for another rough diamond shipment that was exported on 20 May 2010.

After consultation with the UAE Customs Authority and as per the rules and regulations of the UAE Union Law No.13 and the KPCS, any rough diamond shipment unaccompanied by a KP Certificate will not be imported into UAE. Thus, it was concluded that the rough diamond shipment will be sent back to Cyprus.

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An email on 19th Jan 2012 was sent to the Belgian KP Authorities and Cyprus informing them about the returned rough diamond shipment. The passenger’s passport copy and ticket copy along with all required information were sent for their reference. Cyprus is yet to confirm receipt of this Rough Diamond Shipment.

III. Rough diamond shipment from Central Africa

UAE KP Office received a hand carry rough diamond shipment that was not accompanied with a valid KP Certificate, from a. The only document accompanying this shipment was a valuation report issued in Central Africa No 0025094/2011 dated 15 March 2011.

• The UAE KP Office sent an email to Central Africa on 27 October 2011 informing them of the same

• Follow up email was sent to them on 31 October 2011 to check on the status of the above

• The passenger provided a scanned Central Africa KP copy • The scanned copy was sent to Central Africa on Nov 1 2011, to confirm

its authenticity • No confirmed response was received from Central Africa • The passenger did not return to enquire about the status of the rough

diamond shipment

Currently the shipment of rough diamonds is in the custody of the Dubai Customs Authority.