PART 592—ROUGH DIAMONDS CONTROL REGULATIONS Authority: 3 U.S.C. 301; 19 U.S.C. 3901-3913; 31 U.S.C. 321(b); Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note); E.O. 13312, 68 FR 45151, 3 CFR, 2003 Comp., p. 246. Source: 69 FR 56938, Sept. 23, 2004, unless otherwise noted. Subpart A—Relation of This Part to Other Laws and Regulations § 592.101 Relation of this part to other laws and regulations. This part is separate from, and independent of, the other parts of this chapter, with the exception of part 501 of this chapter, the recordkeeping and reporting requirements and procedures of which apply to this part. Actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. Differing foreign policy and national security circumstances may result in differing interpretations of similar language among the parts of this chapter. No license or authorization contained in or issued pursuant to those other parts authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part. Subpart B—Prohibitions § 592.201 Prohibited importation and exportation of any rough diamond; permitted importation or exportation of any rough diamond. (a) Except to the extent provided in paragraph (b) of this section, and notwithstanding the existence of any rights or obligations conferred or imposed by any contract entered into or any license or permit granted prior to the effective date, the importation into, or exportation from, the United States on or after July 30, 2003, of any rough diamond, from whatever source, is prohibited, unless the rough diamond has been controlled through the Kimberley Process Certification Scheme. (b) The prohibitions in paragraph (a) of this section regarding the importation into, or exportation from, the United States of any rough diamond not controlled through the Kimberley Process Certification Scheme do not apply to an importation from, or exportation to, any country with respect to which the Secretary of State has granted a waiver pursuant to section 4(b) of the Clean Diamond Trade Act (Pub. L. 108-19) and section 2(a)(i) of Executive Order 13312. Note to § 592.201. An importation of any rough diamond from, or an exportation of any rough diamond to, a non-Participant is not controlled through the Kimberley Process Certification Scheme and thus is not permitted, except in the following circumstance. The Secretary of State may, pursuant to section 4(b) of the Clean Diamond Trade Act, waive the prohibitions contained in section 4(a) of that Act with respect to a particular country for periods of not more than one year each. The Secretary of State will publish a notice in the Federal Register § 592.202 Evasions; attempts; conspiracies. (a) Notwithstanding the existence of any rights or obligations conferred or imposed by any contract entered into or any license or permit granted prior to July 30, 2003, any transaction by a United States person anywhere, or any transaction that occurs in whole or in part within the United States, on or after the effective date that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in this part is prohibited. (b) Notwithstanding the existence of any rights or obligations conferred or imposed by any contract entered into or any license or permit granted prior to July 30, 2003, any conspiracy formed to violate any of the prohibitions of this part is prohibited. Subpart C—General Definitions § 592.301 Controlled through the Kimberley Process Certification Scheme. (a) Except as otherwise provided in paragraph (b) of this section, the term controlled through the Kimberley Process Certification Scheme (1) Kimberley Process Certificate. (i) The original certificate must be presented immediately upon demand to U.S. Customs and Border Protection in connection with an importation or exportation of rough diamonds; (ii) The person identified as the ultimate consignee ( see (iii) The person identified as the ultimate consignee ( see (iv) The U.S. Principal Party in Interest or U.S. authorized agent (see 15 CFR 30.1) must also provide the certificate to the U.S. Bureau of the Census immediately after export of the shipment of rough diamonds from the United States by faxing it to (800) 457-7328 or by other methods as permitted by the U.S. Bureau of the Census; and (v) Any voided certificate(s) must be provided to the U.S. Bureau of the Census immediately upon voiding by faxing it to (800) 457-7328 or by other methods as permitted by the U.S. Bureau of the Census ( see (2) Tamper-resistance requirement. (3) Notification requirements for importations into the United States. (4) Issuance of Kimberley Process Certificate for exportations from the United States. Note to paragraph ( a As reflected in a Memorandum of Understanding (MOU) among the U.S. Department of State, the U.S. Bureau of the Census, and the U.S. Kimberley Process Authority (USKPA), a non-profit association, Kimberley Process Certificates for the exportation of rough diamonds from the United States may only be issued at this time by the USKPA or by entities licensed to do so by the USKPA. Pursuant to this MOU, the U.S. Department of State annually reviews the USKPA's standards, practices, and procedures. The Secretary of State may reassign this review function to any other officers, officials, departments, and agencies within the executive branch, consistent with applicable law. (5) Validation of Kimberley Process Certificate for exportations from the United States. (i) Report shipments to the U.S. Bureau of the Census through the Automated Export System (AES) or a successor system and obtain an Internal Transaction Number (ITN) prior to exportation. The ITN is the number generated by the AES and assigned to a shipment confirming that an Electronic Export Information (EEI) was accepted and is on file in the AES. (ii) Report the ITN on the Kimberley Process Certificate accompanying any exportation from the United States, which completes the validation process for the exportation of rough diamonds from the United States to a Participant. (b) The Secretary of State, consistent with section 3(2)(B) of the Clean Diamond Trade Act (Pub. L. 108-19), may modify the requirements set forth in paragraph (a) of this section upon making a determination that a Participant has established an alternative system of control for rough diamonds that meets substantially the standards, practices, and procedures of the Kimberley Process Certification Scheme. Note 1 to § 592.301. The Secretary of State will periodically publish in the Federal Register Note 2 to § 592.301. Pursuant to 31 CFR §§ 501.601 and 501.602, the recordkeeping and reporting requirements imposed by § 592.501 apply to all U.S. persons engaged in the importation into, or exportation from, the United States of any shipment of rough diamonds. Note 3 to § 592.301. Effective November 1, 2004, customs brokers, importers, and filers making entry of a shipment of rough diamonds must either submit through U.S. Customs' Automated Broker Interface (ABI) system the unique identifying number of the Kimberley Process Certificate accompanying the shipment or, for non-ABI entries, indicate the certificate number on the Customs Form 7501 Entry Summary at each entry line. Note 4 to § 592.301. As of May 21, 2008, any diamond, regardless of value, that is described in subheadings 7102.10, 7102.21 or 7102.31, Harmonized Tariff Schedule of the United States and is imported into the United States shall not be released from the custody of U.S. Customs and Border Protection (CBP) except by a formal entry for consumption, as defined in § 141.0a(f) of the CBP regulations. See 19 CFR 141.0a(f). [69 FR 56938, Sept. 23, 2004, as amended at 73 FR 29433, May 21, 2008; 83 FR 28372, June 19, 2018] § 592.302 Effective date. The term effective date (a) With respect to all provisions of this part except for § 592.301(a)(3), 12:01 a.m., eastern daylight time, July 30, 2003; and (b) With respect to § 592.301(a)(3), September 23, 2004. § 592.303 Entity. The term entity § 592.304 Exporting authority. (a) The term exporting authority (b) The exporting authority for the United States is the U.S. Bureau of the Census. Note to § 592.304. The Secretary of State will periodically publish in the Federal Register § 592.305 Importation into the United States. The term importation into the United States § 592.306 Importing authority. (a) The term importing authority (b) The importing authorities for the United States are the U.S. Bureau of Customs and Border Protection or, in the case of a territory or possession of the United States with its own customs administration, analogous officials. Note to § 592.306. The Secretary of State will periodically publish in the Federal Register § 592.307 Kimberley Process Certificate. The term Kimberley Process Certificate (a) The title “Kimberley Process Certificate” and the statement: “The rough diamonds in this shipment have been handled in accordance with the provisions of the Kimberley Process Certification Scheme for rough diamonds”; (b) Country of origin for shipment of parcels of unmixed ( i.e. Note to paragraph ( b A shipment including a parcel of mixed-origin rough diamonds is to be entered into the United States with the Kimberley Process Certificate accompanying the shipment, and the certificate need not indicate the countries of origin of the diamonds. With respect to such a shipment, the country-of-origin field on the certificate must be filled in with asterisks. The shipment must, however, still comply with all other country-of-origin reporting requirements imposed by statute or regulation. (c) Unique numbering with the Alpha 2 country code, according to ISO 3166-1; (d) Date of issuance; (e) Date of expiry; (f) Name of issuing authority; (g) Identification of exporter and importer; (h) Carat weight/mass; (i) Value in U.S. dollars; (j) Number of parcels in the shipment; (k) Relevant Harmonized Commodity Description and Coding System; and (l) Validation by the exporting authority. Note to paragraph ( l See § 592.301(a)(4) for procedures governing the validation of the Kimberley Process Certificate when exporting from the United States. § 592.308 Participant. The term Participant Note to § 592.308. The Secretary of State will periodically publish in the Federal Register § 592.309 Person. The term person § 592.310 Rough diamond. The term rough diamond § 592.311 United States. The term United States, § 592.312 United States person; U.S. person. The term United States person U.S. person § 592.313 Voided certificate. The term voided certificate [83 FR 28373, June 19, 2018] § 592.314 Tamper-resistant container. The term tamper-resistant container tamper-resistant container. [83 FR 28373, June 19, 2018] Subpart D—Interpretations § 592.401 Reference to amended sections. Except as otherwise specified, reference to any provision in this part or chapter or to any other regulation refers to the same as currently amended. § 592.402 Effect of amendment. Unless otherwise specifically provided, any amendment, modification, or revocation of any provision in or appendix to this part or chapter or of any order, regulation, ruling, or instruction issued by or under the direction of the Director of the Office of Foreign Assets Control does not affect any act done or omitted, or any civil or criminal suit or proceeding commenced or pending prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, or instruction continue and may be enforced as if such amendment, modification, or revocation had not been made. § 592.403 Transshipment or transit through the United States. The prohibitions in § 592.201 apply to the importation into, or exportation from, the United States, for transshipment or transit, of any rough diamond intended or destined for any country other than the United States, unless the shipment is sealed in a tamper-resistant container, accompanied by a Kimberley Process Certificate, and leaves the United States in the identical state in which it entered. The validation, recordkeeping, and reporting procedures applicable to importations and exportations do not apply in this case. § 592.404 Importation into or release from a bonded warehouse or foreign trade zone. The requirements of the Kimberley Process Certification Scheme apply to all imported shipments of a rough diamond, regardless of whether they are destined for entry into, or withdrawal from, a bonded warehouse or a foreign trade zone of the United States. Subpart E—Records and Reports § 592.501 Records and reports. For provisions relating to required records and reports, see part 501, subpart C, of this chapter. Recordkeeping and reporting requirements imposed by part 501 of this chapter with respect to the prohibitions contained in this part are considered requirements arising pursuant to this part. Subpart F—Penalties § 592.601 Penalties. (a) Section 8 of the Clean Diamond Trade Act (the Act) (Pub. L. 108-19, 117 Stat. 631, 19 U.S.C. 3901-3913) provides that: (1) A civil penalty not to exceed the amount set forth in section 8 of the Act may be imposed on any person who violates, or attempts to violate, any order or regulation issued under the Act; (2) The applicable maximum civil penalty per violation of the Act is $17,062. (3) Whoever willfully violates, or willfully attempts to violate, any order or regulation issued under this Act shall, upon conviction, be fined not more than $50,000, or, if a natural person, may be imprisoned for not more than 10 years, or both; and any officer, director, or agent of any corporation who willfully participates in such violation may be punished by a like fine, imprisonment, or both; and (4) Those customs laws of the United States, both civil and criminal, including those laws relating to seizure and forfeiture, that apply to articles imported in violation of such laws shall apply with respect to any rough diamond imported in violation of the Act. Note to paragraph ( a As reflected in paragraphs (a)(1) and (2) of this section, section 8(a) of the Act establishes penalties with respect to any violation of any regulation issued under the Act. OFAC pre-penalty, penalty, and administrative collection procedures relating to such violations are set forth below in §§ 592.602 through 592.604. Section 8(c) of the Act also authorizes the U.S. Bureau of Customs and Border Protection and U.S. Immigration and Customs Enforcement, as appropriate, to enforce the penalty provisions set forth in paragraph (a) of this section and to enforce the laws and regulations governing exports of rough diamonds, including with respect to the validation of the Kimberley Process Certificate by the U.S. Bureau of the Census. The Office of Foreign Assets Control (OFAC) civil penalty procedures set forth below are separate from, and independent of, any penalty procedures that may be followed by the U.S. Bureau of Customs and Border Protection and U.S. Immigration and Customs Enforcement in their exercise of the authorities set forth in section 8(c) of the Act. (b) Adjustments to penalty amounts. (2) The criminal penalties provided in the Act are subject to increase pursuant to 18 U.S.C. 3571. (c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the government of the United States, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device, a material fact, or makes any materially false, fictitious, or fraudulent statement or representation or makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry shall be fined under title 18, United States Code, imprisoned, or both. (d) Violations of this part may also be subject to other applicable laws. [69 FR 56938, Sept. 23, 2004, as amended at 81 FR 43076, July 1, 2016; 82 FR 10439, Feb. 10, 2017; 83 FR 11880, Mar. 19, 2018; 83 FR 28373, June 19, 2018; 84 FR 27718, June 14, 20194; 85 FR 19888, Apr. 9, 2020; 86 FR 14538, Mar. 17, 2021; 87 FR 7373, Feb. 9, 2022; 88 FR 2234, Jan. 13, 2023; 90 FR 3693, Jan. 15, 2025] § 592.602 Pre-Penalty Notice; settlement. (a) When required. (b) Response Right to respond. (2) Deadline for response. (i) Computation of time for response. (ii) Extensions of time for response. (3) Form and method of response. (c) Settlement. (d) Guidelines. (e) Representation. [83 FR 28373, June 19, 2018, as amended at 89 FR 15743, Mar. 5, 2024] § 592.603 Penalty imposition. If, after considering any written response to the Pre-Penalty Notice and any relevant facts, OFAC determines that there was a violation by the alleged violator named in the Pre-Penalty Notice and that a civil monetary penalty is appropriate, OFAC may issue a Penalty Notice to the violator containing a determination of the violation and the imposition of the monetary penalty. For additional details concerning issuance of a Penalty Notice, see appendix A to part 501 of this chapter. The issuance of the Penalty Notice shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in federal district court. [83 FR 28374, June 19, 2018] § 592.604 Administrative collection; referral to United States Department of Justice. In the event that the violator does not pay the penalty imposed pursuant to this part or make payment arrangements acceptable to OFAC, the matter may be referred for administrative collection measures by the Department of the Treasury or to the United States Department of Justice for appropriate action to recover the penalty in a civil suit in a federal district court. [83 FR 28374, June 19, 2018] § 592.605 Finding of violation. (a) When issued. (i) Determines that there has occurred a violation of any provision of this part, or a violation of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the Clean Diamond Trade Act; (ii) Considers it important to document the occurrence of a violation; and, (iii) Based on the Guidelines contained in appendix A to part 501 of this chapter, concludes that an administrative response is warranted but that a civil monetary penalty is not the most appropriate response. (2) An initial Finding of Violation shall be in writing and may be issued whether or not another agency has taken any action with respect to the matter. For additional details concerning issuance of a Finding of Violation, see appendix A to part 501 of this chapter. (b) Response Right to respond. (2) Deadline for response; default determination. (i) Computation of time for response. (ii) Extensions of time for response. (3) Form and method of response. (4) Information that should be included in response. (c) Determination Determination that a Finding of Violation is warranted. (2) Determination that a Finding of Violation is not warranted. Note 1 to paragraph ( c A determination by OFAC that a final Finding of Violation is not warranted does not preclude OFAC from pursuing other enforcement actions consistent with the Guidelines contained in appendix A to part 501 of this chapter. (d) Representation. [83 FR 28374, June 19, 2018] Subpart G—Procedures § 592.701 Procedures. For procedures relating to rulemaking and requests for documents pursuant to the Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see part 501, subpart E, of this chapter. § 592.702 Delegation by the Secretary of the Treasury. Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 13312 (FR vol. 68, No. 147, July 31, 2003) and any further Executive orders relating to the Clean Diamond Trade Act (Pub. L. 108-19) may be taken by the Director of the Office of Foreign Assets Control or by any other person to whom the Secretary of the Treasury has delegated authority so to act. Subpart H—Paperwork Reduction Act § 592.801 Paperwork Reduction Act notice. For approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of the information collections relating to the recordkeeping and reporting requirements of §§ 592.301(a)(1), subpart C, § 592.501, subpart E, and 592.603, subpart F, see