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Starting a diamond import/export business can be a lucrative venture. Diamonds are considered valuable not just for their beauty, but for the physical and chemical properties that make them ideal for various industrial applications. That said, starting this type of business is challenging and comes with numerous regulations.
Key takeaways:
Our guide outlines the steps necessary to help you start your diamond import/export business.
There are a number of steps and things you need to know when starting your diamond import/export business. As daunting as they may seem, however, these steps are fairly simple to follow.
The first thing you’ll need to figure out is where your business will source its diamonds. Fortunately, there are a variety of countries that export these valuable gemstones all over the world. I’ve provided some data on the top suppliers of diamonds to the United States.
None of the countries listed have a large mining operation. Instead, rough diamonds from other parts of the world are sent to each nation to be cut and polished. Cutting and polishing is essentially the process of turning a rough diamond crystal into a finished gem.
India in particular is the world’s top diamond exporting country. That’s because 30% of the world’s rough diamonds are sent to the city of Surat to be cut and polished.
Similarly, Israel isn’t known for it’s leading diamond mining operations. Instead, the country uses advanced factories to polish and sell to buyers abroad. The U.S. and Israel share a free trade agreement that allows you to import diamonds into the country duty free.
If your business is aimed at providing gems to polishers within the U.S., then you’ll need to source uncut rough diamonds. Depending on the quality of the stones, you can also look into being a supplier for markets that use diamonds in an industrial capacity.
Rough diamond suppliers include:
Diamonds funneled into industrial applications are referred to as bort. Various industries rely on specialized equipment made with bort, which is significantly less per carat than polished stones.
Many of the countries the U.S. imports diamonds from have bort suppliers that can provide you with these low quality, but still profitable, diamonds.
Finding a diamond supplier is much easier than you would think. For one, you can find a supplier by using online directories. These directories will allow you to search for different diamond suppliers using a variety of criteria.
One directory that you can use to find global diamond suppliers is Volza. They have information on various suppliers, as well as other trade data on diamonds. Another method you can use is trade shows. There are a variety you can go to that are located in the U.S. and abroad.
I’ve provided a list of popular jewelry trade shows and where they’re located:
These are only a few, but there are plenty of others that you can visit to connect with suppliers.
The process for registering your business will vary based on the agency. There are three primary organizations you’ll have to worry about.
This includes:
As of January 1, 2024, companies in the U.S. must report information about their beneficial owners to register their business with the federal government. The beneficial owner is essentially the person that ultimately controls or owns the company. If you’re the beneficial owner, then simply provide information about yourself.
You’ll need to report this information to the Financial Crimes Enforcement Network (FinCEN). To trademark your business, file with the United States Patent and Trademark office after your company has been formed. The last step of registering with the government is to obtain a federal tax ID.
You’ll need to register with a state agency and obtain a state agent if your business qualifies as a:
You can register your diamond business with the state it resides in online, in person, or through the mail. Most states will require you to complete the registration process with one of three entities.
This includes:
When registering your business with state agencies, you’ll need to include the following information:
In most cases, you won’t need to register your business with local agencies, such as the state or county where you reside. To be on the safe side, check websites belonging to your local government.
Customs and Border Protection (CBP) is the primary government agency in the U.S. that is responsible for overseeing imports.
Your new business must be registered with CBP as an importer of record. This can be done by filling out an Importer of Record Registration, which is a document we offer here at USA Customs Clearance.
Diamonds are extremely valuable stones, and there’s a good chance your imports will have a value of $2,500 or more. If that’s the case, it’s essential for a customs bond to accompany your diamonds.
Starting on March 1st, 2024, all diamond imports must have a self certification that verifies they’re not from Russia. It should be provided in a PDF format on an official company letterhead.
You’ll have to provide one of two statements. One statement corresponds with non-industrial diamonds that weight 1.0 carat or more, and the other will be for diamond jewelry and unsorted diamonds.
To learn more about these statements, read our complete guide to importing diamonds.
The Kimberley Process (KP) is a trade regime that was created in 2003.
The purpose of the KP is to increase international transparency and oversight of the diamond supply chain to eliminate the trade of conflict diamonds.
Conflict diamonds are rough diamonds that are sold by rebel groups to fund their operations. To support the KP, the U.S. passed The Clean Diamond Trade Act (CDTA) in 2003. This act essentially prohibits the importation/exportation of diamonds that are not cleared by the KP.
Nations that are known for the sale of conflict diamonds include:
The State Department’s Office of Multilateral Trade Affairs is responsible for implementing the KP. There are specific requirements laid out by this trade regime that you’ll have to follow when your business imports or exports rough diamonds.
The U.S. Census Bureau requires faxed KP certificates for both imports and exports of rough diamonds. The Census Bureau uses this information to compile import and export statistics. Imports and exports of rough diamonds should also have an original KP certificate.
When exporting these gemstones, you must also send your Electronic Export Information (EEI) through the Automated Commercial Environment/Automated Export System (ACE/AES).
Make sure to file the EEI for your rough diamonds prior to them leaving the United States. When the EEI has been confirmed, you will be given your transaction number. This number must be included on your KP Certificate for it to be fully validated.
You can only import and export from countries that follow the KP. You will need a CBP 7501 form, also known as an entry summary, and a customs bond for rough diamond imports.
The CBP 7501 form is used to disclose the value, classification, and origin of your import, along with other important pieces of information. The CBP 7501 form will need the eight-digit number of the Kimberley Process certificate. The eight-digit number is unique to each certificate.
Rough diamond imports and exports should travel in a tamper-resistant container. This type of container is defined as packaging that has an indicator or barrier that proves tampering has occurred when broken. Your business will also need to notify the relevant port authority of the receipt for your rough diamonds within 15 days of it arriving in the country.
You must keep your KP certificate at least five years after the date of export or import.
Related: The Complete Guide To CBP Form 5106
Loose diamonds, or diamonds that haven’t been set in jewelry, are duty free. Diamonds that are set in jewelry will have a duty rate. The same rules will apply to imports of synthetic or lab-grown diamonds.
Regardless of whether you’re required to pay duty on your diamond imports, you must list the correct Harmonized Tariff Schedule (HTS) code on your forms.
It’s important to use the correct HTS code on imports for the following reasons:
There are a total of 11 different HTS codes that can be applied to diamonds. It's important that you file the correct HTS code to avoid border delays and seizure of your imports. If you’re not sure how to find your HTS code, then consider using our HTS Lookup Tool to find the one that applies to your diamonds.
Simply type in a phrase or single word that best describes your diamonds to find the correct HTS code.
At USA Customs Clearance, our Licensed Customs Brokers and import specialists can help you understand diamond import regulations. With their assistance, you’ll experience a successful and smooth importing experience. You’ll also have access to a range of other services when you import with us.
Get your diamonds moving today with USA Customs Clearance. Start by using one of our services, or contact our team (855) 912-0406 if you require more information. If you prefer, you can also leave a direct question on our online contact form.
Worried about the Strict Regulations facing your diamond import? Talk with one of Our Experts.
During a 30 Minute Licensed Expert Consulting, you'll receive the guidance you need.
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