Faqs

The System of Warranties (SoW), which complements the KPCS, requires buyers and sellers of rough diamonds, polished diamonds and jewelry set with diamonds to include a warranty statement on B2B invoices and memos each time a diamond change hands, assuring the next buyer that it originated from sources in compliance with the KPCS.

It also assures the buyer that essential responsible business practices have been followed. These include fundamental human and labor rights, anti-money laundering and anti-corruption SoW Guidelines.

Like the original version, the upgraded SoW requires that all buyers and sellers of rough diamonds, polished diamonds and jewelry containing diamonds include a statement on B2B invoice and memos declaring that the goods being sold are in compliance with the KPCS.

However, the updated statement also includes a commitment that the buyers and sellers adhere to the SoW Guidelines. Specifically, the WDC SoW Guidelines reference the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN Convention Against Corruption, and national AML guidelines that comply with the FATF’s 40 Recommendations on Money Laundering for Dealers in Precious Metals and Stones.

In order to be able to apply the upgraded warranty statement on an invoice or memo note, users must conduct specific due diligence, which includes registering on a dedicated website and conducting a self-assessment to ascertain whether they meet the Sow provisions. The self-assessment needs to be done on an annual basis.

The KP Core Document refers to the SoW as self-regulatory system, but within the trade, compliance with the SoW requirements is effectively a condition of doing business.

It is a requirement for members of diamond exchanges that are affiliated with the World Federation of Diamond Bourses (WFDB) and members of organizations belonging to the International Diamond Manufacturers Association (IDMA). It is also a condition of compliance with the Code of Practices of the Responsible Jewellery Council (RJC) and the Responsible Sourcing Blue Book of CIBJO, the World Jewellery Confederation. There are also legal jurisdictions where proof of SoW compliance is required as part of an annual company audit, such as Belgium.

Another factor rendering the SoW as essentially obligatory in the industry is that it is required practice for clients of the De Beers Group (Sightholders), in its Best Practice Principles Assurance Program.

The same is true for suppliers of the world’s largest jewelry retailers, including Signet Jewelers, which cites the SoW in its Responsible Sourcing Protocol for Diamonds; Chow Tai Fook Jewellery, which references them in Code of Practice for Supplier Assessment; and Tiffany & Co., where compliance with the SoW are referenced in its Supplier Code of Conduct.

The KPCS covers the export of rough diamonds from country to country, ensuring that they have met the Minimum Requirements of the KP and this can be considered conflict-free.

In addition, the SoW covers rough diamonds, loose polished diamonds and jewelry set with diamonds, assuring the next buyer that it originated from sources in compliance with the KPCS.

Thus, the SoW extends the effectiveness of the KPCS along the full length of the supply chain, as it is applied each time a diamond changes hands, even if the two parties to a transaction are located in the same country.

“The diamonds herein invoiced have been purchased [or “sourced”*] from legitimate sources not involved in funding conflict, in compliance with United Nations Resolutions and corresponding national laws [where the invoice is generated**].

The seller hereby guarantees that these diamonds are conflict free and confirms adherence to the WDC SoW Guidelines.”

*  “sourced” may be used by companies that do not purchase from open market, but source and aggregate diamonds from production facilities that are owned/partly owned by them.

** “where the invoice is generated” may be used by companies if they specifically want to reference the country of invoice issuance.

The SoW is a chain of warranties, whereby the seller issuing the warranty statement relies upon the integrity of warranty statement that preceded it, which was issued by the party from which he or she purchased the diamonds.

Any change to the wording of one of those warranty statements may dilute the veracity of the commitment being made by sellers, as the diamonds move further down the chain of distribution.

A warranty is a written declaration made about a product by the seller of that product.

In the case of the SoW warranty, the seller guarantees that the diamond or diamonds being sold are not associated with conflict, as defined by the KP Core Document, and are in compliance with the other terms described in the WDC SoW Guidelines.

The seller can provide the warranty only if he or she is in possession of a diamond’s KP certificate and/or has purchased the diamond from a seller that provided the same SoW warranty.

A business standard involves a set of measurable benchmarks, which can be audited. In this respect, in and of itself, the SoW is not a business standard but a self-regulation mechanism. However, in the diamond industry, implementation of the SoW is a regular procedure. As such it is a requirement of leading industry business standards, such as the Code of Practices of the Responsible Jewellery Council (RJC).

The Kimberley Process Core Document expressly refers to a “system of industry self-regulation that provides for a system of warranties, underpinned through verification by independent auditors of individual companies and supported by internal penalties set by industry, which will help to facilitate the full traceability of rough diamond transactions by government authorities.”

Buyers and sellers of rough diamonds, polished diamonds and jewelry containing diamonds must pass on a warranty statement each time diamonds change hands, assuring the next buyer that the diamonds originated from sources in compliance with the KPCS.

Additionally, each company trading in rough and polished diamonds is required to keep for a period of at least five years records of the warranty invoices received and the warranty invoices issued when buying or selling diamonds, reconciling them on an annual basis, as part of KPCS compliance.

Implementation of the upgraded SoW requires registering on the SoW website, and successfully completing an online self-assessment. It will ascertain that the applicant meets the minimum requirements of the SoW Guidelines.

The self-assessment is customized and takes into consideration the stage or stages of the diamond and jewelry value chain in which the industry member is involved, the size of the company, and whether it is already compliant with other recognized due diligence systems, like that of the Responsible Jewellery Council. Consequently, not all companies are required to answer the same questions.

Diamond companies are required to undergo the online self-assessment once every 12 months. They are required to register once, and can access their own data consequently, using a secure password.

Yes! Once you have created an account for your company on the dedicated SoW website, you will be able to access the search engine of the SoW database and look for said counterpart.

The requirements to maintain copies of invoices are subject to the laws of each country, but, according to the Kimberley Process Core Document, all rough diamond buyers, sellers ( as well as importers and exporters) are encouraged to keep for a period of five years all buying, selling or exporting records, listing the names of buying or selling clients, their license number and the amount and value of diamonds sold, exported or purchased.

The WDC, the RJC and the De Beers Group proceeded to an alignment exercise on the SoW to ensure harmonization and to avoid administrative burden and duplication for their members and clients.

Therefore, companies that are already certified against or compliant with the RJC Code of Practices and the De Beers Best Practice Principles (BPPs) Assurance Programme will automatically be recognized by the online tool as meeting the SoW minimum requirements.

The information that WDC retains is only data required to enable registration, and to provide the filters for the customization of the questionnaire.

Yes, you should! After you successfully complete the online self-assessment, the system will generate a PDF with your responses. It is recommended that you print it and/or store a digital copy on your own system. You are encouraged to share it with your business partners to show that you are in compliance with the WDC System of Warranties.

You also encouraged to display your unique ID number on your invoices and memos.

YES! Email our SoW Coordinator at the following sow.helpdesk@worlddiamondcouncil.org.

The Kimberley Process (KP) is the international forum dedicated to eradicating conflict diamonds from the world trade, with conflict diamonds being defined by the KP’s Core Document as  “rough diamonds used by rebel movements to finance wars against legitimate governments”.

Established in 2000 and endorsed by both the UN General Assembly and the UN Security Council, the KP is a tripartite coalition involving governments, industry (WDC) and the Civil Society, where Government Participants hold decision-making rights, whilst industry and the Civil Society are considered “Observers”.

The World Diamond Council (WDC) is the diamond industry’s official representative in the KP.

The main mechanism developed by the KP to eradicate the trade in conflict diamonds is the Kimberley Process Certification Scheme (KPCS).

The Core Document of the KP defines conflict diamonds as rough diamonds used by rebel movements to finance wars against legitimate governments.

The KPCS is a United Nations-sanctioned mechanism for eliminating conflict diamonds, which came into force by international agreement on January 1, 2003. It covers the trade in rough diamonds between countries.

The KPCS is enforced by government-approved KP Authorities at official points of exit and entry in any KP Participant country or a Regional Economic Integration Organization (in the case of the European Union). To be able to enforce the system, regulations need to have been approved in each Participant country and enshrine in their national legislation.

The Kimberley Process (KP) is the tripartite international forum established by governments, the diamond industry and the Civil Society in 2000, with the endorsement of the United Nations General Assembly and Security Council, to address the challenge of conflict diamonds.

The Kimberley Process Certification Scheme (KP) is the mechanism that was developed in 2003 by the KP members to eliminate conflict diamonds into the distribution chain.

Each Participating country must abide by the following:

1. Each Country pass a legislation dedicated to the trade in rough diamonds underpinned by legal penalties to those who violate the legislation.

2. Within the framework of the KPCS, rough diamonds can only be traded between parties in Kimberley Process (KP) Participant countries.

3. International shipments of rough diamonds must be accompanied by a valid and validated KP certificate, which has been issued by an authorized KP Authority in the country or region from which they are being exported, ensuring that they are conflict-free diamonds.

4. Each shipment must be in a tamper-proof container.

There are today 60 Government Participants in the KP, representing 86 countries. The European Union and its 27 member states counting as a single Participant is represented by the European Commission.

Participants in the Kimberley Process (KP) are states or regional economic integration organizations (currently the European Union) that have met the Minimum Requirements of the Kimberley Process Certification Scheme (KPCS) and are, therefore, eligible to trade in rough diamonds with one another. Participants in KP have full decision-making rights.

Observers are the diamond industry and the Civil Society involved in the KP. These groups support the certification scheme (KPCS) through technical and administrative expertise. The current Observers are the World Diamond Council (WDC), representing the industry, the Civil Society Coalition (CSC), Diamond Development Initiative (DDI) and the African Diamond Producers Association (ADPA). Observers do not have voting rights, but they are eligible to participate in all Working Groups and Committees and take part in the decision making process.

A KP certificate is a document issued for a rough diamond or a parcel of rough diamonds at a point of export, by an authorized KP Authority in a KP Participant country, certifying that they are conflict free. The certificate substantiates that the diamonds in question were either mined or recovered at a site in the certifying country that meets the KP Minimum Requirements or were part of a parcel of rough diamonds that entered the certifying country or the regional economic integration organizations (in the case of the EU) accompanied by bona fide KP certificate.

The first KP certificate issued for a rough diamond or a parcel of rough diamond is in the country that it was mined/recovered, it is incumbent on the KP Authority in that country to ascertain that it was not associated with conflict.
When a rough diamond or a parcel of rough diamonds arrive at a point of import, the KP Authority in the importing country examines the parcel and the KP certificate before allowing them entry.

Because the KPCS is operated at the national level, according to laws and regulations that are legislated and enforced in each country, the procedures used by different KP Authorities may differ from place to place. It is advised that the exporter contact the KP Focal Point for the country from which the rough diamonds export is being made.

An up-to-date list of KP Focal Points is available on the WDC website at: KP Members.

KP Offices are the facilities managed by the KP Authorities in each KP Participant countries or regional economic integration organization  (in the case of the EU).

The KP Offices are tasked to issue KP certificates in the case of an export of rough diamonds and to verify KP certificates in the case of an import of rough diamonds.

An up-to-date list of KP Focal Points is available on the WDC website at: KP Members.

1. Rough diamonds may only be exported or imported from parties in KP Participant countries, and must be accompanied by an original KP Certificate, issued by the KP Diamond Office in the country of export. Imports of rough diamonds must be formally declared to customs when entering a country, including any rough diamonds “hand carried” by passengers.

2. Import shipments of rough diamonds must be sealed in a tamper-proof container. Standard mailing and express consignment packaging, or such packaging that simply contains a resealable plastic bag, are not considered to be a tamper resistant.

3. Importers must notify the relevant foreign exporting authority of the receipt of the rough diamond shipment. Importers of rough diamonds must retain a copy of the KP Certificate accompanying the shipment for a period of at least three years from the date of importation. This requirement may be longer in certain countries. Because the legal requirement may differ from country to country, members of trade are encouraged to consult with their own KP Authorities: click here.

4. KP certificates are issued only for rough diamonds and checked at points of export and import. But members of the industry are also encouraged to comply with the WDC System of Warranties (SoW). The SoW is the industry self-regulation mechanism designed to complement the KPCS by cascading down the warranty of conflict-free origin onto polished diamonds and diamonds set in jewelry that originated from sources in compliance with the KPCS. The SoW is applied each time ownership of diamonds changes, when they are exported or imported, and when they are sold without leaving country.

According to the KP Core Document, KP certificates should be kept readily accessible for period of no less than three years. Some countries require that they be held for a longer period of time.

A fake KP certificate is a forged document accompanying a real rough diamond export, which deliberately miss states that the diamonds in question are KP compliant. The purpose of this document is to whitewash non-KP compliant rough diamonds.

A fraudulent or false KP certificate is document that has been created with the purpose of defrauding a buyer by appearing to have been issued for a shipment of conflict free rough diamonds. It is often transferred digitally, and no actual physical copy exists. Very often, no actual diamonds exist.