Import of Rough Diamonds -Advance Remittance
The Expert Committee on Gems and Jewellery Sector, constituted by the Ministry of Finance, has recommended that a more liberal approach may be adopted on advance payment for import of rough diamonds. Based on the recommendations, the Gems and Jewellery Export Promotion Council (GJEPC) approached the Reserve Bank for allowing import of rough diamonds from five mining companies of rough diamonds, viz., i) RIO TINTO, UK; ii) BHP Billiton, Australia; iii) ENDIAMA, E. P. Angola; iv) ALROSA, Russia; and v) GOKHARAN, Russia, in addition to the Diamond Trading Company Pvt. Ltd., UK, in respect of which advance payments without bank guarantee, could be permitted.
With a view to liberalising the procedure further and facilitate import of rough diamonds, RBI has permitted banks to allow advance remittance without any limit and without bank guarantee or standby letter of credit, by an importer (other than a Public Sector Company or a Department / Undertaking of the Government of India / State Government/s), for import of rough diamonds into India from the above mentioned companies.
RBI has directed that
1. The importer should be a recognised processor of rough diamonds as per a list to be approved by GJEPC in this regard and should have a good track record of export realisation;
2. AD Category - I banks should undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction;
3. Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or otherwise. Further, due caution may be exercised to ensure that remittance is not permitted for import of conflict diamonds;
4. KYC and due diligence exercise should be done by the AD Category - I banks for the Indian importer entity and the overseas company; and
5. AD Category - I banks should follow up submission of the Bill of Entry / documents evidencing import of rough diamonds into the country by the importer, in terms of the Act / Rules / Regulations / Directions issued in this regard.
CIRCULAR NO. 33/RBI., Dated: February 28, 2007