Federal Court of Appeal Determines that Rough Diamonds Cannot be Imported into Canada without Kimberly Process Certificates

Source: Canada US
Link: Federal Court of Appeal Determines that Rough Diamonds Cannot be Imported into Canada without Kimberly Process Certificates

In a recent ruling on February 24, 2020, the Canadian Federal Court determined in the decision of Tamba Thomas and Minister for Public Safety and Emergency Preparedness (MPSEP), 2020 FC 290 [Thomas v. MPSEP] that diamonds being imported into Canada must be imported in accordance with Canada’s Import and Export of Rough Diamonds Act, Import and Export of Rough Diamonds Regulations, and accordingly with Canada’s obligations as a participant of the Kimberly Process. The absence of the required certificates and paperwork will result in diamonds being seized and incapable of being imported into Canada, even if the paperwork was missing as a mistake.

Facts and Procedural History

Tamba Thomas is an Australian diamond merchant. In November 2009, Mr. Thomas travelled from the United States to Canada. Mr. Thomas had several rough (uncut) diamonds from Sierra Leone in his luggage that he had forgotten about. A CBSA Officer found the rough diamonds, and the diamonds were seized after Mr. Thomas explained that he did not have the necessary Kimberly Process Certificate. Furthermore, the rough diamonds were not packaged in a tamper-proof container which is another requirement for importation.

Mr. Thomas requested a review by the Minister for Public Safety and Emergency Preparedness for the seizure of the rough diamonds. It was determined that the rough diamonds were not formally imported into Canada because they did not meet the requirements of the Kimberly Process. The CBSA released the rough diamonds to Mr. Thomas on the condition that he immediately export the diamonds from Canada.

This situation placed Mr. Thomas in a legal “limbo” for the next 10 years because the diamonds had never been deemed as imported into Canada and the original Kimberly Process Certificate from Sierra Leone had expired. Although the CBSA released the rough diamonds to Mr. Thomas, he did not have the required Kimberly Process Certificate to export the rough diamonds to a participating country. Mr. Thomas asked to have the diamonds imported into Canada so that he could obtain the required Kimberly Process Certificate to export the diamonds to either the United States or Australia. His request was denied.

Mr. Thomas raised the issue in Federal Court where it was determined that the decision of the Minster was reasonable. The Federal Court of Appeal dismissed Mr. Thomas’ appeal and also held that the decision was reasonable.

What is the Kimberly Process?

The Kimberly Process is an international agreement involving governments and the diamond industry with the intention to restrict the flow of blood diamonds, also known as conflict diamonds. The sale of blood diamonds is used to fund violence and political conflicts.

The Kimberly Process prevents the sale of blood diamonds by ensuring that all diamonds bought and sold in member states are from legitimate sources. The Kimberly Process requires that a Kimberly Process Certificate (“KPC”) be obtained from the participating country to certify that the diamonds are conflict-free. A KPC issued to export rough diamonds from Canada is only valid for 60 days. Additionally, the diamonds must be transported in tamper-resistant containers.

Many countries participate in the Kimberly Process, including Canada, the United States, Australia, and Sierra Leone. In Canada, the initiative is administered by the Kimberly Process Office of Canada (KPOC) in Natural Recourses Canada.

Be Careful at the Border

Thomas v. MPSEP is a reminder for diamond merchants, business owners, and all other travellers that it is very important to be extremely careful with required paperwork when importing goods, particularly when the paperwork expires on a periodic basis. If you have valuable goods that require paperwork to be imported, it is fundamental to ensure that the paperwork is always up-to-date and completed. Having updated, completed paperwork will ensure that the goods are always prepared to be imported.