While we all were on vacation, the European Commission finalized its proposals for its own rough diamond trading mechanism. For the imports or exports of rough, the whole of Europe is one single market. Diamonds destined for Antwerp, for example, can be cleared at the customs of any port of entry (in Portugal, Spain, Greece or any of the existing 15 EC member countries and, eventually, in an additional 13 eastern and southern European countries), and the Belgium customs are not allowed to clear the diamonds again.

Imports of rough diamonds not accompanied by a certificate issued by a Kimberley Process participant will be totally prohibited, as will exports to countries that are not members of the Kimberley Process. As the vast majority of customs officials can't recognize diamonds, or, specifically, differentiate between conflict and non-conflict, each country in Europe will establish a "Diamond Authority" which will inspect the seal and the certificate of the parcel at the port of import. As this Diamond Authority (probably private companies which will charge the importer for the service) may not have a permanent presence at each point of import, customs are allowed to hold the parcels for up to 30 days. If the customs officials have doubt about the parcels, they will be sent back to the government of the country from which the shipment originated. If the origins aren't clear, the diamonds will be confiscated and sold at public auctions, with the proceeds going towards African assistance projects. Actually, each European country will be allowed to determine the penalties applicable in event of breach of the provisions of the EC regulations.

When rough diamonds are exported from Europe to Israel, India or anywhere, they must be accompanied by export certificates for rough diamonds. Such certificates can only be issued and validated where there is conclusive evidence that those diamonds have been imported under a certificate. This system will probably become effective by the end of this year. The European Commission has asked the European Council to approve the proposals now, so that the frameworks can be established to ensure that Europe will be ready when the Kimberley System is finally approved by the United Nations.

If I am allowed to make a very "unpopular" observation: the civil war in Angola is basically over; the erstwhile rebels (UNITA) are talking to the government; the civil war in Sierra Leone, where the greatest atrocities took place, is over. Democratic elections are taking place. In the DRC, the Kabila government is concluding settlements with the countries of the invading countries. I find it very hard to define today what in the present reality represents a "conflict diamond". The European rough diamond certification system will add considerable transaction costs to each parcel, as the industry will have to finance over a dozen national diamond authorities which will be authorized to say that the Kimberley Certificate attached to the goods is "kosher". Moreover, except probably for imports into England and Belgium, there may be considerable delays in the movement of rough. Are all these measures really still necessary? If they are - what are the arguments?

Are we too scared to say: the industry has shown to be willing to go the extra mile to eradicate conflict diamonds from the diamond business? Is it really "out of place" to ask whether there is no room for revaluating the need for all these systems since the objective situation - rebels financing civil strife from the proceeds of diamonds - has changed, and has actually and thankfully changed for the better? The World Diamond Council (the industry's representation in the Kimberley Process) has "welcomed the European proposals" and called it a "significant step forward in our campaign to rid the world of conflict diamonds." The WDC calls on the U.S. to adopt a similar system.

There is no argument that we must do everything to get rid of conflict diamonds - but what do you do when the relevant conflicts are over? One might argue that there are other reasons (not conflict related reasons) for us as an industry to be fighting for maximum chains of warranties, transparency, etc., because it helps our image - and it is an integral part of good corporate behavior. Most of us would respect that - and agree with it. But there are many ways to achieve transparency. To legislate the granting of so much power (to refuse import, to confiscate diamonds, to send parcels back to Africa, to delay the movement of goods - both imports and exports) to officials of 15 different national "diamond authorities", bodies which (except for Antwerp) don't even exist yet, doesn't give much comfort. The proposals haven't been adopted yet by the European Council, and I expect that nobody will raise objections. It is my guess that Europe and the world will have an enormous and costly certification system in place, just when there are no relevant African conflicts any more. Hallelujah.