KPCS’s key provisions require participants to:    enact or amend appropriate laws or regulations to implement and enforce  the certification scheme, and maintain dissuasive and proportional  penalties for transgressions;   designate importing and exporting authorities;    establish control systems designed to eliminate the presence of conflict  diamonds from the rough diamond trade, such as systems for physically  inspecting rough diamond import and export parcels;   ensure that a Kimberley Process certificate accompanies each import and  export shipment of rough diamonds;   acknowledge the receipt of rough diamond import parcels to the foreign    ensure that rough diamonds are imported and exported in tamper-resistant    collect and maintain rough diamond data on production, imports, and  exports; and collate and exchange such data with KPCS. Agencies and USKPA Have Implemented CDTA

Consistent with the provisions of CDTA, the United States has used  several U.S. agencies and USKPA to implement the domestic and  international provisions of the act. U.S. State  and the Treasury have led these U.S. implementation efforts. U.S. U.S. The United States Has Helped to Strengthen KPCS Internationally, but Assistance- Related Efforts Face Challenges

Internationally, the United States has helped to strengthen KPCS by  participating in KPCS activities and providing assistance to help Sierra  Leone and Liberia comply with KPCS, but this assistance faces challenges. The United States Has Helped Two Countries in Their Efforts to Implement KPCS and Is Considering a Regional Approach to Enhance the Impact of Its Diamond-Related Assistance

The United States has provided about $7.57 million in assistance to help  Sierra Leone ($6.13 million) and Liberia ($1.44 million) implement KPCS,  but the limited capacity and resources of these two recipient countries and  the need to harmonize diamond policies with other countries in the region  have restricted the effectiveness of this assistance. Donors and diamond producers are considering a regional approach to  help enhance the effectiveness of donor assistance because this assistance  is constrained by the limited capacity and resources of these countries and  the need to harmonize diamond policies among countries vulnerable to  illicit cross border diamond trading. Conclusions

A system for controlling the trade in rough diamonds will be effective only  if it has control mechanisms designed to curtail or deter the trade in  conflict diamonds. Appendix I: Objectives, Scope, and Methodology

As mandated by the Clean Diamond Trade Act (CDTA), this report focused  on (1) describing the institutional framework the U.S. government has  created to implement CDTA, (2) examining how the United States has  implemented the provisions of CDTA domestically and what principal  challenges it faces, and (3) examining how the United States has helped to  strengthen the Kimberley Process Certification Scheme (KPCS) and what  principal challenges it faces. The agencies we interviewed included:  the Department of State (Bureau of Economic Affairs and United States  Mission to the United Nations), the Department of the Treasury (Office of Foreign Assets Control), the Department of Homeland Security (Bureau of Customs and Border  Protection and Bureau of Immigration and Customs Enforcement), the Department of Commerce (Bureau of the Census), the Department of Interior (U.S. Geological Survey), the U.S. Agency for International Development, and the Office of the U.S. Trade Representative.
Why GAO Did This Study

In 2003, the United States and other countries began implementing the Kimberley Process Certification Scheme (KPCS) to curtail the trade of rough diamonds that had fueled severe conflicts in Africa, known as conflict diamonds. CDTA provides the statutory framework for U.S. implementation of the KPCS. As mandated in CDTA, this report (1) describes the institutional framework established to implement the act, (2) examines implementation of the domestic provisions of the act and challenges it faces, and (3) examines how the United States has helped to strengthen the KPCS and challenges it faces.

What GAO Found

The United States has used multiple U.S. agencies and a private, not-for-profit entity to implement the domestic and international provisions of the Clean Diamond Trade Act (CDTA). The Departments of State and the Treasury have led U.S. efforts to implement the domestic provisions of the act; State has led the U.S. efforts to curtail trade in conflict diamonds abroad. Domestically, the Departments of State, the Treasury, Homeland Security, and Commerce, and the private entity, called the U.S. Kimberley Process Authority (USKPA), have been responsible for controlling U.S. imports and exports of rough diamonds. Internationally, State, the U.S. Agency for International Development (USAID), and the U.S. Geological Survey have helped to strengthen KPCS. Domestically, the U.S. systems for reporting rough diamond statistics and for controlling imports and exports of these diamonds are vulnerable to illicit trade. The United States has enhanced the quality of its rough diamond trade data by improving its collection processes, but work remains to be done. Also, the United States does not periodically inspect rough diamond imports or exports to ensure that the contents of the rough diamond parcels match the Kimberley Process certificates. In addition, the United States lacks an effective system for confirming receipt of imports--a Kimberley Process requirement for avoiding possible diversions of rough diamond imports. Finally, the United States has not had a plan for monitoring USKPA, but is developing and testing one. Internationally, the United States has helped to strengthen KPCS by participating in KPCS activities and providing assistance to Sierra Leone and Liberia in their efforts to comply with KPCS, but donor assistance to these countries faces challenges. Donors and diamond producing countries are considering a regional approach to help enhance the effectiveness of donor diamond-related assistance because this assistance is constrained by the limited capacity and resources of these countries and the need to harmonize diamond policies among countries vulnerable to illicit cross border diamond trading.