Proposed Voluntary Code of Conduct for Authenticating Canadian Diamond Claims

Draft

presented by the Code Development Committee
for your consideration

May 28, 2002

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Please submit your response before July 22, 2002 either by

Mail to: Information Centre Competition Bureau 50 Victoria Street Hull, Quebec K1A 0C9	or Fax to: 819-997-0324
	or Online: Enquiries/Complaints

Response form - (HTML) (PDF: 6.64 KB)

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Table of Contents

Preamble

1. Name of the Code

2. Objectives of the Code

3. Application of the Code

4. Definitions

5. Stakeholders responsibilities

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5.1 Mining operators

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5.1.1 System/Procedural Requirements
5.1.2 Storage of Rough Requirements
5.1.3 Shipping Requirements

5.2 Sorting and Marketing Facilities

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5.2.1 System/Procedural Requirements
5.2.2 Storage of Diamond Requirements
5.2.3 Number Allocation to Canadian Diamonds
5.2.4 Parcelling of Diamonds
5.2.5 Invoicing Requirements
5.2.6 Selling Requirements

5.3 Traders of Rough Diamonds

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5.3.1 Purchasing of Rough Requirements
5.3.2 Storage of Rough Requirements
5.3.3 Parcelling of Rough Diamonds
5.3.4 Invoicing of Rough Diamonds
5.3.5 Selling Requirements

5.4 Cutters and Polishers

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5.4.1 Purchasing of Rough Requirements
5.4.2 Storage of Rough Diamonds
5.4.3 Processing Requirements
5.4.4 Reconciliation of Rough and Polished Diamonds
5.4.5 Invoicing of Polished Diamonds

5.5 Traders of Polished Diamonds

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5.5.1 Purchasing of Polished Diamonds
5.5.2 Storage of Polished Diamonds Requirements
5.5.3 Parcelling of Polished Diamonds
5.5.4 Invoicing of Polished Diamonds
5.5.5 Selling Requirements

5.6 Jewellery Manufacturers

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5.6.1 Purchasing of Polished Diamonds
5.6.2 Storage of Polished Diamonds Requirements
5.6.3 Production Reconciliation
5.6.4 Invoicing of Diamond Jewellery

5.7 Retailers

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5.7.1 Purchasing of Diamond Jewellery/Polished Diamonds
5.7.2 Information Provided to Consumers

6. Canadian Diamond Authentication Process

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6.1 Information Required
6.2 Cost-Recovery for Request
6.3 Time Limit for Making a Request
6.4 Request Response Time
6.5 Failure to Authenticate a Canadian Diamond Claim

7. Code Administration Committee

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7.1 Members of the Committee
7.2 Responsibilities of the Committee

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Preamble

To be advised

Table of Contents

1. Name of Code

This Code is the Voluntary Code of Conduct for Authenticating Canadian Diamond Claims.

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2. Objective of Code

The objective of this Code is to provide a minimum standard for authenticating a Canadian Diamond claim.

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3. Application of the Code

This Code applies only to diamonds marketed as Canadian.

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4. Definitions

In this Code:

• Canadian Diamond means a diamond mined in Canada.
• Canadian Diamond claim means any representation that a diamond is Canadian.
• Canadian Diamond Authentication Process means a mechanism by which a consumer may authenticate a Canadian Diamond claim.
• Diamond Identification Number means the unique number lasered on the girdle of the polished diamond that must be reconciled with the original rough diamond parcel number and the Diamond Production Number.
• Diamond Production Number refers to the number allocated to a rough diamond by a cutter and polisher prior to the production process and that must be reconciled with the original rough diamond parcel number.
• Diamond trader refers to a person trading in rough or polished diamonds and includes brokers and dealers.
• Official invoice refers to an invoice produced by a person trading in diamonds or diamond jewellery and includes the minimum information outlined in the Code.
• Paper trail means a trackable system which includes paper records as well as computerised records that allow a diamond to be tracked from the consumer to the mine of origin.
• Parcel means one or more diamonds that are packed together and that are not individualised.
• Parcel numbers are those numbers used by the mining companies, sorting and/or marketing facilities and traders to track parcels of diamonds in their possession.
• Person includes any individual, company incorporated or unincorporated, partnership or sole trader.
• Polished Diamond Description means the colour, cut, clarity and carat (weight) of polished diamonds (the 4 Cs).
• Production Reconciliation means:

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  (1) the balancing of the weight of the original rough diamonds with the final polished diamonds; and
  (2) the matching of the rough diamond parcel number with the Diamond Production Number and, if applicable, the unique Diamond Identification Number of the polished diamond.

• Representation means any claim made by a person for promotional purposes, regardless of the medium used, on the origin of a diamond.
• Rough Diamond Description means the description of the shape, colour and size class of rough diamonds.
• Variance by carat means a monitored variation in original weight versus subsequent weight of the same diamond
• Variance by transfer means a monitored variation in actual weight loss or gain due to transportation from one location or process to another.
• Weight Variance Limits means the tolerable limits for weight variances.

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5. Stakeholders Responsibilities

The following stakeholders who are signatories to this Code agree to be bounded by the following responsibilities.

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5.1 Mining Operators

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5.1.1 System/Procedural Requirements

The mining operator must have an in-house rough diamond tracking system in place that secures and reconciles all rough diamonds extracted from the Canadian mine for a period of eight years.

5.1.2 Storage of Rough Requirements

The mining operator must securely store all rough diamonds extracted from the Canadian mine and store them separately from any non-Canadian rough diamonds.

5.1.3 Shipping Requirements

Mine operators must, when shipping bulk rough diamonds from mining facility to the sorting facility, ensure that:

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5.1.3.1 rough diamonds are securely packaged; and
5.1.3.2 the package is clearly labelled identifying the weight of the rough diamonds; and
5.1.3.3 all shipments of rough diamonds are accompanied by mining company's official shipment documentation.

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5.2 Sorting and/or Marketing Facilities

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5.2.1 System/Procedural Requirements

The Sorting and/or Marketing Facilities must have an in-house rough diamond tracking system in place that secures and reconciles all rough diamonds shipped from the Canadian diamond mining operator for a period of eight years.

5.2.2 Storage of Rough Diamond Requirements

The Sorting and/or Marketing Facilities must securely store all rough diamonds and store all Canadian rough diamonds separately from any non-Canadian rough diamonds.

5.2.3 Number Allocation to Rough Canadian Diamonds

All parcels of Canadian rough diamonds must be recorded and identified by a unique parcel number allocated by the Sorting and /or Marketing Facility.

5.2.4 Parcelling of Rough Diamonds

Rough diamond parcels must be clearly labelled and labels must contain the following information:

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5.2.4.1 a unique parcel number; and
5.2.4.2 description of rough diamonds including:

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(a) description of rough diamonds; and
(b) total weight of parcel.

5.2.5 Invoicing Requirements

Each sale of a rough diamond or a rough diamond parcel must be accompanied by an official company invoice and include the following information:

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5.2.5.1 the name and address of the marketing company;
5.2.5.2 the unique parcel number of the rough diamonds;
5.2.5.3 statement of certification that the rough diamonds are of Canadian origin;
5.2.5.4 rough diamond description;
5.2.5.5 weight of rough diamond or rough diamond parcel in carats;
5.2.5.6 date of invoice; and
5.2.5.7 the name and address of the customer.

5.2.6 Selling Requirements

The Sorting and Marketing Facilities must, when selling rough diamonds from its sale site, ensure that:

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5.2.6.1 rough diamonds are securely packaged and
5.2.6.2 the package is clearly labelled identifying:

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(a) the weight of the rough diamonds;
(b) rough diamond description;
(c) the unique parcel numbers; and
(d) each sale is accompanied by an official invoice which includes the information required in 5.2.5 above.

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5.3 Traders of Rough Diamonds

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5.3.1 Purchasing of Rough Requirements

Traders must obtain and retain invoices from the source where Canadian rough diamonds were purchased for a minimum of seven years.

5.3.2 Storage of Rough Requirements

Traders must separately store and process Canadian sourced rough diamonds.

5.3.3 Parcelling of Rough Diamonds

Rough diamond parcels must be clearly labelled and labels must contain the following information:

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5.3.3.1 unique parcel number;
5.3.3.2 rough diamonds description; and
5.3.3.3 total weight of parcel.

5.3.4 Invoicing of Rough Diamonds

Each sale of a rough diamond or a rough diamond parcel must be accompanied by an official invoice and include the following information:

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5.3.4.1 the name and address of the trader
5.3.4.2 statement of certification that the rough diamonds are of Canadian origin
5.3.4.3 a unique parcel number of the rough diamond
5.3.4.4 description of rough diamond
5.3.4.5 weight of rough diamond or rough diamond parcel in carats;
5.3.4.6 date of invoice, and
5.3.4.7 the name and address of the customer.

5.3.5 Selling Requirements

The trader must, when selling rough diamonds, ensure that:

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5.3.5.1 rough diamonds are securely packaged; and
5.3.5.2 the package is clearly labelled identifying:

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(a) the weight of the rough diamonds;
(b) description of rough diamonds;
(c) unique parcel numbers; and

5.3.5.3 each sale is accompanied by an official invoice which included the information outlined in 5.3.4 above.

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5.4 Cutters and Polishers

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5.4.1 Purchasing of Rough Requirements

Cutters and polishers of Canadian rough diamonds must purchase Canadian rough diamonds only from mining marketing facilities or traders that abide by the minimum requirements outlined in this Code. Cutters and polishers must obtain and retain invoices from the source where the Canadian rough diamonds were purchased for a minimum of seven years. The invoice obtained from the mining marketing facilities or traders must contain the information outlined in 5.3.4 above.

5.4.2 Storage of Rough Diamonds

Cutters and polishers must separately store and process Canadian sourced rough diamonds.

5.4.3 Processing Requirements

The cutter and polisher, prior to the cutting and polishing process, must:

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5.4.3.1 assign a unique Diamond Production Number to each diamond. The cutters and polishers must be able to reconcile their unique Diamond Production Number with the rough diamonds identified by a unique parcel number on an invoice issued by a mining marketing facility or trader that abides by the minimum requirements outlined in this Code; and
5.4.3.2 Each individual diamond must be kept separated and must retain its unique Diamond Production Number throughout production.

5.4.4 Reconciliation of Rough and Polished Diamonds

The cutter and polisher, prior to the cutting and polishing process, must:

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5.4.4.1 weigh each rough diamond and record its weight next to its assigned Diamond Production Number in a production schedule;
5.4.4.2 at the conclusion of the cutting and polishing process, the polished diamond must be weighed and the weight must be recorded against its assigned Diamond Production Number in a production schedule. The balancing of the weight of the original rough diamond must be with the final polished diamond; in other words, the original weight must equal the final weight and the loss incurred in the cutting and polishing process.
5.4.4.3 If the Diamond Identification Number is assigned by the cutter and polisher and lasered on the polished diamond, the cutter and polisher must:

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(a) reconcile and record in a database the unique Diamond Production Number and the unique Diamond Identification Number; and
(b) register the unique Diamond Identification Numbering system with the Code Administration Committee.

5.4.5 Invoicing of Polished Diamonds

Each sale of a polished diamond(s) must be accompanied by an official invoice and include the following information:

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5.4.5.1 the name and address of the cutter and polisher;
5.4.5.2 statement of certification that the polished diamonds are of Canadian origin;
5.4.5.3 the unique Diamond Production Number or Diamond Identification Number for each polished diamond;
5.4.5.4 polished diamond description;
5.4.5.5 date of invoice; and
5.4.5.6 the name and address of the customer.

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5.5 Traders of Polished Diamonds

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5.5.1 Purchasing of Polished Diamonds Requirements

Traders must purchase Canadian polished diamonds only from traders that abide by the minimum requirements outlined in this Code. Traders must obtain and retain invoices from source of Canadian polished diamonds purchased for a minimum of seven years.

5.5.2 Storage of Polished Diamonds Requirements

Traders must separately store and process Canadian sourced polished diamonds.

5.5.3 Parcelling of Polished Diamonds

Polished Diamond parcels must be accompanied by the following information provided by the cutter and polisher:

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5.5.3.1 the name and address of the cutter and polisher;
5.5.3.2 statement of certification that the polished diamonds are of Canadian origin;
5.5.3.3 the unique Diamond Production Number or Diamond Identification Number for each polished diamond; and
5.5.3.4 the polished diamond description;

5.5.4 Invoicing of Polished Diamonds

Each sale of a polished diamond or a polished diamond parcel must be accompanied by an official invoice and include the following information:

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5.5.4.1 the name and address of the trader;
5.5.4.2 statement of certification that the polished diamonds are of Canadian origin;
5.5.4.3 the unique Diamond Production Number or Diamond Identification Number of the polished diamond;
5.5.4.4 polished diamond description;
5.5.4.5 date of invoice; and
5.5.4.6 the name and address of the customer.

5.5.5 Selling Requirements

The trader must, when selling polished diamonds, ensure that:

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5.5.5.1 Polished diamonds are securely packaged; and
5.5.5.2 the package is clearly labelled identifying:

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(a) a description of the polished diamonds; and
(b) Diamond Production Number or the unique Diamond Identification Number;

5.5.5.3 each sale is accompanied by an official invoice which included the information outlined in 5.5.4 above.

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5.6 Jewellery Manufacturers

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5.6.1 Purchasing of Polished Diamonds

Manufacturers of jewellery containing Canadian polished diamonds must purchase Canadian polished diamonds only from traders that abide by the minimum requirements outlined in this Code. Manufacturers must obtain and retain invoices from source of Canadian polished diamonds purchased.

5.6.2 Storage of Polished Diamonds Requirements

Manufacturers must separately store Canadian sourced polished diamonds used in the jewellery manufacturing process from non-Canadian sourced polished diamonds.

5.6.3 Production Reconciliation

Manufacturers must reconcile all Canadian polished diamonds purchased with diamonds used in manufacturing, sold and/or in inventory.

5.6.4 Invoicing of Diamond Jewellery

Each sale of a jewellery item promoting a Canadian diamond(s)must be accompanied by an official invoice and include the following information:

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5.6.4.1 the name and address of the manufacturer;
5.6.4.2 statement of certification that the diamond is of Canadian origin;
5.6.4.3 the unique Diamond Production Number or Diamond Identification Number(s) of diamond(s);
5.6.4.4 polished diamond description;
5.6.4.5 date of invoice; and
5.6.4.6 the name and address of the customer.

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5.7 Retailers

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5.7.1 Purchasing of Diamond Jewellery/Polished Diamonds

Canadian retailers must purchase Canadian diamond jewellery/ polished diamonds only from traders that abide by the minimum requirements outlined in this Code. Retailers must obtain and retain invoices from the source of Canadian diamond jewellery/ polished diamonds purchased for a minimum of seven years.

5.7.2 Information Provided to Consumers

A retailer must provide the following information to consumers on sale of a promoted Canadian diamond or jewellery containing a Canadian diamond:

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5.7.2.1 A unique Diamond Identification Number must be lasered on every diamond .2ct - SI quality or higher and also reconcilable with the unique Diamond Production Number. The Unique Diamond Identification Numbering System must be registered with the Code Administration Committee
5.7.2.2 For diamonds less than .2ct and SI quality, the retailer must still provide a unique Diamond Identification Number that is reconcilable with the unique Diamond Production Number but is not required to laser it on the diamond.
5.7.2.3 A polished diamond certificate/report and an invoice which contains the following information:

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(a) polished diamond description;
(b) the unique Diamond Identification Number;
(c) statement of certification that the polished diamond(s) is of Canadian origin and address of the issuer of the certificate/report;
(d) a certificate which certifies the Canadian origin of the diamond must not contain a disclaimer as to the certification of the country origin.;
(e) date of purchase; and
(f) name and address of retailer.

5.7.2.4 Details regarding the Canadian Diamond Authentication Process which include the following:

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(a) the toll-free Canadian Diamond Authentication hot line number;
(b) the cost-recovery fee applicable to this process;
(c) the information required to initiate this process which includes:

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(c.1) the Diamond Identification Number;
(c.2) the name and address of the retailer where the diamond/jewellery was purchased;
(c.3) the 4Cs (carat, colour, clarity and cut)
(c.4) name and contact details of the person requesting authentication.

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6. Canadian Diamond Authentication Process

6.1 Information Required

A person may authenticate a Canadian Diamond claim by calling the toll-free Canadian Diamond Authentication hotline number. The person must provide the following:

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6.1.1 the Diamond Identification Number;
6.1.2 the name and address of the retailer where the diamond/jewellery was purchased;
6.1.3 the 4Cs (carat, colour, clarity and cut);
6.1.4 name and contact details of the person requesting authentication; and
6.1.5 payment of a cost-recovery fee.

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6.2 Cost-recovery for Request

A cost-recovery fee for this authentication process will be payable by the person making the request (the amount to be determined in the near future).

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6.3 Time Limit for Making a Request

A request for authentication can only be made within five years of purchasing the diamond.

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6.4 Request Response Time

A person making the request must receive an answer to his/her request within thirty days. If not, a letter must be sent to the requesting person advising him/her of the extension.

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6.5 Failure to Authenticate a Canadian Diamond Claim

If an authentication request cannot be fulfilled because the origin of the diamond(s) cannot be traced to a Canadian mine, the Code Administration Committee will refer the matter to the Competition Bureau.

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7. Code Administration Committee

7.1 Members of the Committee

The Code Administration Committee consists of representatives of:

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7.1.1 Canadian diamond mines;
7.1.2 rough diamond traders;
7.1.3 Canadian cutters and polishers;
7.1.4 polished diamond traders;
7.1.5 jewellery manufacturers;
7.1.6 retailer associations; and
7.1.7 consumers.

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7.2 Responsibilities of the Committee

The Code Administration Committee is responsible for the following:

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7.2.1 creating stakeholder awareness regarding their responsibilities under the Code;
7.2.2 administering the Canadian Diamond Authentication Hotline;
7.2.3 provide an annual report to the Competition Bureau and its stakeholders; and
7.2.4 recommend changes to the Code