Starting a diamond import/export business can be a lucrative venture. Diamonds are considered by many to be one of the most beautiful items on Earth, making them highly sought after for jewelry and other display applications. So what do you need to know in order to start a diamond import/export business?
In order to start a diamond import/export business, you must familiarize yourself with the Kimberley Process — an initiative started to increase oversight of the diamond industry and prevent the sale of conflict diamonds. You must also know how to source and classify diamonds and identify their import/export requirements.
Our guide below 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.
Almost a quarter of global diamond imports come from five countries:
However, most of the world’s diamonds are located in two countries: Russia, which has an estimated 650 million carats, and Botswana, which has an estimated 310 million carats.
The U.S. sources most of its diamond imports from Israel, Belgium and India. The reason the U.S. sources from these three countries is because of their refining capabilities.
All three of these countries specialize in polishing diamonds. Despite their polishing skills, Israel and Belgium don’t mine their own diamonds. When you start importing diamonds, it’s a good idea to source them from one of these three countries. You should also familiarize yourself with the Kimberley Process (discussed below) to determine where and how to source your diamonds, if not from one of those countries.
|Country||Value of Diamond Imports||Percentage of Diamond Imports|
|South Africa||$0.5 billion||4.13%|
When diamonds are exported from their country of origin, they’re usually shipped by air. Security companies work with airline providers to ensure that the diamonds are loaded onto the correct plane or delivery truck.
Finding a diamond supplier is much easier than you would think. You can find diamond supplier directories online. These directories will allow you to search for different diamond suppliers using a variety of criteria, including:
When you research suppliers, be sure to pay attention to their credibility.
Many imports records, like your products and suppliers, are available to the public - including your competitors. Check out our article Manifest Confidentiality: Do Import Records Affect Business? to find out how to keep your records private.
Registering with federal and state governments will depend on a few different criteria. The federal government will require you to register with them if you conduct business under a name different than your own.
The four basic steps that you will have to take to start your business are:
Qualifying factors for each of these steps will be different for federal and state governments. Be sure to thoroughly research your state’s laws.
CBP is the government agency in the U.S. that is responsible for imports and exports.
As discussed earlier, If you are importing diamonds, you will not need a license or permit from the federal government. The same is true for the CBP. However, if your diamond import is worth $2500 or more, you will have to provide a CBP 301 form, also known as a customs bond.
Customs bonds act as a guarantee that all import duties and taxes will be paid. Customs bonds can be single entry or continuous (meaning it will cover all imports for a calendar year). The CBP suggests hiring a Licensed Customs Broker to file the entry for you. Customs Brokers are certified by the CBP and are familiar with all of its protocols and tariff classification.
We offer continuous customs bonds for just $245 per year. Becoming an importer also means you will have to register as one with CBP. We can also help you obtain your record of registration in about 10 simple steps.
The Kimberley Process Certification Scheme (KPCS) and The Kimberley Process multilateral trade regime were created in 2003. The purpose of the KPCS under The Kimberley Regime is to increase international transparency and oversight of the diamond industry and prevent armed groups from selling diamonds to fund themselves (conflict diamonds). Diamonds can only be imported to countries that have adopted the Kimberley Process.
A conflict diamond is a diamond that is mined in an area controlled by a warring faction. The U.S. also passed The Clean Diamond Trade Act (CDTA) in 2003. This act essentially prohibits the importation/exportation of diamonds that are not cleared by the KPCS.
The Kimberley Process was created to prevent diamonds from being used to fund conflicts in multiple countries, such as:
Angola, Sierra Leone, and Liberia still have diamond trading sanctions placed on them. Some of these countries may have their sanctions removed. It is also just as possible that other countries could have sanctions put on them.
Before making the decision to import diamonds, it’s critical that you make sure the country you’re importing from isn’t subject to any sanctions. Our experts are knowledgeable and stay up-to-date on which countries have sanctions imposed against them. We can let you know whether or not the diamonds you want to import are at risk for potential issues.
The Census Bureau requires that KPC certificates be faxed to them when an importer’s diamonds arrive at the port. The Census Bureau requires this information because it must compile import and export statistics.
Only countries that follow the Kimberley Process are eligible for diamond imports. In addition to a customs bond, you will need a CBP 7501 form, also known as an entry summary.
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.
Once your diamonds arrive, you must hold onto your KPC certificate for five years after the date they were imported. Rough diamond importers also have to file annual reports of their total import/export activity.
CBP requires diamond exports to follow strict guidelines. These requirements share some similarities with that of diamond import requirements.
All exported diamonds must be accompanied by a KPC certificate. You can obtain a certificate from a licensed Kimberley Process licensee. Licensees are reliable because they are validated by the U.S. Census Bureau.
Diamonds must be placed into tamper-resistant containers when shipped. The packaging for the container must come with a barrier or tampering indicator. This is done so it's easier to tell if tampering has occurred.
Just like with diamond imports, you will need to report your diamond export to the Census Bureau. The information for your exported diamonds has to be sent through the Census Bureau Automated Export System (AES).
The information for your diamond must be sent in advance of it being shipped out. When the information has been confirmed, you will be given your transaction number.
Afterward, return the number to the filer to validate the KPC certificate that allows the exportation of rough diamonds. The internal transaction number must be listed on the Kimberley certificate that comes with your export of diamonds.
Electronic export information (EEI) has to be prepared and filed in order to export rough diamonds. The carrier of your diamonds will file the information with the CBP’s AES.
While most commodities imported into the U.S. are subject to customs duties, diamonds are considered duty-free in most circumstances.
The only exception is diamonds that are mounted or have been permanently strung. Diamonds that are mounted using certain types of metal are classified as jewelry, and jewelry is subject to import duty. Loose diamonds are duty-free.
Regardless of whether or not you’re required to pay duty on your diamond imports, you must still list the correct HTS code on import 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.
Starting an import/export business is no easy task. When you throw in all the protocols for importing and exporting diamonds it gets a lot harder. So, why not hire a customs broker to help ease your load? CBP itself recommends hiring a Licensed Customs Broker to ensure that you follow the correct import/export process.
USA Customs Clearance has the experienced personnel you need to get your diamonds where they need to go. Our team will correctly file your entries and submit them at the appropriate time.
We have extensive experience helping clients move a variety of commodities. Schedule a 1-on-1 consulting session with our experts to get the help you need.