The Kimberley Process

The Kimberley Process (KP) is a joint governments, industry and civil society initiative to stem the flow of conflict diamonds. All London Diamond Bourse members subscribe and fully support the efforts of the KP and adhere at all times to the spirit of fair trade, ethics and transparency in diamond trading.

For the adoption of a CODE OF CONDUCT in view of establishing a set of rules and requirements for the London Diamond Bourse (LDB) and its respective members who trade rough diamonds, to comply with Article 17 of the European Council Regulation implementing the Kimberley Process Certification Scheme for the international trade in rough diamonds and, thereby, to satisfy the requirements for LDB to obtain a listing in Annex V of the said Regulation.

LDB (THE "BOURSE"):

• Having regard to the European Council Regulation implementing the Kimberley Process certification scheme for the international trade in rough diamonds, decided on 19 December 2002, and as may be amended from time-to-time (the "Council Regulation"),
• Having regard to the Kimberley Process (the "KP") certification scheme (the "KP Certification Scheme"), as Annexed to the Council Regulation,

WHEREAS:

1. As envisaged by the KP Certification Scheme, the Council Regulation establishes a framework for a system of warranties and industry self-regulation whereby traders in rough diamonds who are members of organisations listed in Annex V to the Council Regulation will be permitted to undertake warranties which, for the purposes of the Council Regulation's export regime, may serve as conclusive evidence that their rough diamonds have been imported lawfully into the European Community.
2. The Bourse's natural person members include traders in rough diamonds (the "Members"), and where a Member holds the capacity of director, managing director, general manager, director or active partner with a power of attorney of a commercial company (or companies), such company (or companies) will be made subject to this Code of Conduct (defined infra) (a "KP Member").
3. In support of its application for listing in Annex V of the Council Regulation, and, following such listing, its continued compliance with the requirements set forth by Article 17 of that Regulation, the Bourse will hereby establish a code of conduct (the "Code of Conduct") whereby its Members and KP Members will undertake to comply with its warranties and a system for investigating and enforcing their compliance with those warranties will be created.
4. To that effect, the Council of Management of the LDB, in accordance with Article 114 of the By-Laws and Rules of the London Diamond Bourse and Club (the "LDB Rules"), will adopt a resolution to incorporate the Code of Conduct into, and as an integral part of, the LDB Rules (the "LDB Decision"), such resolution to be passed and accepted by the membership of the LDB at its forthcoming Annual General Meeting on 9th April 2003, and, in so doing, the LDB Decision, including the Code of Conduct, will be binding on the Bourse and on its Members and KP Members. The Bourse will take all steps necessary to give full effect to the LDB Decision.
5. The Bourse will appoint the Arbitration Commission established by the LDB pursuant to its authority under the LDB Regulation (the "Arbitration Commission") to oversee the compliance by its Members and KP Members with the Code of Conduct, which includes the warranties provided thereunder. Where the Arbitration Commission is of the view that a Member's and/or KP Member's conduct may be violating, or may have violated, its warranties under this Code of Conduct, it will appoint arbitrators from the list of arbitrators (the "Arbitrators") set forth pursuant to the Regulations of the General Reconciliation and Arbitration Council (the "Arbitration Regulations") who will be responsible for determining whether that Member and/or KP Member has violated this Code of Conduct, including its warranties made hereunder (such body shall be referred to herein as the "Code Board"). Furthermore, a Member and/or KP Member will be entitled to appeal a decision of the Code Board to the Arbitration Commission, and the Arbitration Commission will appoint arbitrators (also referred to as "Arbitrators" herein, except as may be stated otherwise ) from the Arbitration Regulations (such body shall be referred to herein as the "Code Appeals Board"). The Code Board and the Code Appeals Board shall establish their own systems of procedures.
6. This Code of Conduct shall apply to all Members and KP Members, and such Members and KP Members shall take all steps necessary to ensure that any person acting on their behalf or authority in respect of trading rough diamonds complies with this Code of Conduct.

* For greater certainty, except as stated otherwise, reference to "Abritrators" herein shall be to the Arbritrators appointed to the Code Board or the Code Appeals Board, as the case may be.

THEREFORE ADOPTS THE FOLLOWING CODE OF CONDUCT:

Chapter I - Subject Matter and Definitions

Article 1

1. In accordance with the requirements set forth in Article 17 of the Council Regulation, this Code of Conduct establishes a system of warranties and self-regulation whereby each Member and KP Member of the Bourse who deals in rough diamonds undertakes to comply with the warranties set forth at Article 17(2)(a) of the Council Regulation, and as may be amended from time-to-time (the "Undertakings"), as further described at Article 4 of this Code of Conduct.
2. This Code of Conduct shall be incorporated into, and be an integral part of, the LDB Rules and, as such, is also binding on the Bourse and on its Members and KP Members.
3. The Bourse shall apply to the Commission or to the Community authority for listing in Annex V of the Council Regulation, as provided for by, and in accordance with, the Council Regulation and any relevant rules of procedures established by the Commission or Community authority for doing so. The Bourse shall take all steps necessary to maintain its listing in Annex V of the Council Regulation.
4. Any amendment to this Code of Conduct only may be made by the Council of Management of the LDB. Such decision only may be made where at least one-half of the members of the Board of Directors are present and, of those members present, it is accepted by at least two-thirds of them. Furthermore, such decision can be taken only where the Council of Management has taken all steps necessary to ensure that any such amendment to this Code of Conduct will not adversely impact upon the Bourse's continued listing in Annex V of the Council Regulation.
5. Every Member who holds the capacity of director, managing director, general manager, director or active partner with a power of attorney of a commercial company (or commercial companies) shall personally guarantee the performance of this Code of Conduct, including the requirement to provide the Undertakings, by that commercial company (or commercial companies) and the commercial company (or commercial companies) shall be listed as a KP Member by the Bourse. Where a KP Member has more than one person who is a Member and who holds the capacity of director, managing director, general manager, director or active partner with a power of attorney of that KP Member, all such Members shall personally guarantee the performance of that KP Member with the Code of Conduct, including the performance of their Undertakings. KP Members shall be subject to the requirements, supervision and sanctioning mechanism set forth by this Code of Conduct. KP Members shall not be admitted as partners/shareholders of the LDB.
6. This Code of Conduct shall be governed by English law.

Article 2

1. For the purposes of this Code of Conduct, all terms and expressions have the same meaning as set forth in either Article 2 of the Council Regulation, the LDB Regulation or as specifically defined herein. To the extent of any inconsistency between a meaning prescribed by the Council Regulation and by this Code of Conduct, the meaning prescribed by this Code of Conduct shall prevail.
2. To the extent of any inconsistency between this Code of Conduct and the LDB Regulation, the Arbitration Regulations and/or any regulation, by-law or directive established under the authority of the LDB Regulation, and/or to the extent of any inconsistency between this Code of Conduct and any regulation, by-law or decision of the Bourse, this Code of Conduct shall prevail to the extent of that inconsistency.

Chapter II - Code of Conduct Membership

Article 3

1. This Code of Conduct shall apply to all Members and KP Members. If they have not done so already in anticipation of the passage of this Code of Conduct, upon this Code of Conduct being adopted by the LDB, Members and KP Members must notify the Bourse by registered mail, that they trade in rough diamonds and that they understand and will abide by the Code of Conduct. Failure by a Member or KP Member to make this notification, however, shall not impact upon the binding effect which this Code of Conduct has on that Member or KP Member, but it may constitute a Serious Violation (defined infra). Where a person who is a member of a Bourse later begins to trade in rough diamonds, that person then shall be deemed to be a "Member" or "KP Member", as the case may be, and that Member or KP Member must notify the Bourse by registered mail, immediately that it is now a Member or KP Member for the purposes of this Code of Conduct. That Member also shall comply with the terms of Article 1(5) regarding the provision of a personal guarantee in respect of a KP Member. This Code of Conduct shall apply to that Member, as well as to any identified KP Member, and that Member and KP Member shall send with its notification to the Bourse confirmation that it understands and will comply with the Code of Conduct. Failure to make this notification, however, shall not impact upon the binding effect which this Code of Conduct has on that Member and KP Member, but it may constitute a Serious Violation (defined infra).
2. To give full and proper effect to Undertakings, each Member shall take all steps necessary to ensure that any natural or legal person acting on that Member's behalf, direction or authority, whether as an employee, agent, representative or otherwise ("Third Persons"), will comply with his or her Undertakings. To that end, the Council of Management of the LDB recommends that, to assist in satisfying this requirement, each Member should require Third Persons to undertake to that Member that they have read and understand the Undertakings and that they will comply with them (attached as Annex A hereto is a sample undertaking which Members may reproduce and distribute to Third Persons). For greater certainty, however, each Member remains solely responsible for compliance by Third Persons with his or her Undertakings.
3. In the case of a KP Member, its Undertakings also will have to be affirmed by and made applicable to ("Third Persons"):
   1. the members of its board of directors;
   2. the manager to whom daily management has been entrusted; and
   3. any employee, agent, representative or other person who is involved in the purchase, sale, import and/or export of rough diamonds on its behalf, direction or authority.

Chapter III - Obligation of the Members and KP Members

Article 4

1. Each Member and KP Member shall and, where applicable, Third Persons described at paragraphs 2 and 3 of Article 3 of this Code of Conduct shall, comply with the Undertakings, as set forth in and contemplated by Article 17(2)(a) of the Council Regulation, and as may be amended from time-to-time, a copy of which is attached as Appendix B hereto.
2. Each Member and KP Member agrees to comply with this Code of Conduct, which includes the Undertakings as well as any decision or action of the Arbitration Commission (which acts on the basis of decisions by the Code Board and the Code Appeals Board), which decision shall be, except as provided at Article 9(9), formally implemented by the Bourse.
3. Each Member and KP Member acknowledges and accepts that the Bourse and/or the Arbitration Commission (and in turn the Code Board and/or the Code Appeals Board) may be required to provide to the Commission and/or to the Community authority information required pursuant to Article 17 of the Council Regulation.
4. Consistent with Article 51 of the LDB Rules, each Member and KP Member agrees not to hold the LDB, the Arbitration Commission, the Code Board and/or the Code Appeals Board liable as a result of any direct or indirect losses or damages suffered by a Member and/or KP Member as a result of any decision, rule, suspension or sanction, or the publication of notice of a suspension or sanction, adopted or taken under, and in accordance with, this Code of Conduct provided that the LDB, the Arbitration Commission, the Code Board and/or the Code Appeals Board, as the case may be, acted in a fair and objective manner. This limitation on liability shall extend to include the Arbitrators, as well as any directors, officers, employees, agents, members, representatives, designees or any other person working on behalf of or assisting the LDB, the Arbitration Commission, the Code Board and the Code Appeals Board. Notwithstanding the above, however, an Arbitrator, or any independent professional retained by a Code Board or Code Appeals Board, may be held personally liable for any breach of Article 7(1)(c) where that Arbitrator or third-party professional used the information referred to in that subparagraph for any commercial or other use or advantage.

Chapter IV - Obligation of the Bourse

Article 5

1. The Bourse shall provide to the Community authority and/or the Commission, as required by the Council Regulation, a complete list of its Members and KP Members dealing in rough diamonds, including their full names, addresses, location and other information which will contribute to avoiding mistaken identities, as well as any subsequent changes to that information. The Bourse will use its best efforts to identify Members and KP Members, which it may do, in whole or in part, by relying on the notifications sent to it pursuant to Article 3(1) hereto.
2. The Bourse shall immediately notify the Community authority and/or the Commission, as required by the Council Regulation, of all changes to its membership subsequent to the application for listing in Annex V, and that information may include the information referred to in Article 5(1) of this Code of Conduct.
3. The Bourse shall provide to the Commission and Community authority access to any information where the Bourse is required to do so under Article 17 of the Council Regulation.
4. The Bourse shall make known to its Members and KP Members all governmental and KP certification scheme laws, regulations and guidelines regarding conflict diamonds and the names of any natural or legal person found guilty, after legally binding due process, of violating these laws and regulations. The Bourse can appoint any person or body it considers appropriate to perform this task on its or their behalf but, notwithstanding such appointment, the Bourse remains responsible for the performance of this requirement.

Chapter V - The Arbritration Commission, the Code Board and the Code Appeals Board

Article 6

1. The Bourse shall appoint the Arbitration Commission to, in the manner set forth in this Code of Conduct, verify its Members' and KP Members' compliance with their Undertakings and the Code of Conduct more generally. The Arbitration Commission shall adopt a decision of the Code Board or, where a decision has been appealed, a decision of the Code Appeals Board as its own and, where that decision is to such effect, the Arbitration Commission shall issue a decision to the Bourse requiring the Bourse to suspend or impose a sanction against (including possible expulsion of) a Member and/or KP Member, and, in certain cases, to publish notice of that suspension or sanction and notify the Commission and/or the Community authority, as required by the Council Regulation, of that decision, in the manner and as set forth in Chapter VI of this Code of Conduct.
2. Where the Arbitration Commission initiates an investigation in accordance with Article 9(2), or where a Member or KP Member appeals a decision of the Code Board in accordance with Article 9(4), the Arbitration Commission shall appoint three Arbitrators from the list of arbitrators set forth pursuant to the Arbitration Regulations to a Code Board or to a Code Appeals Board, as the case may be. With a view to ensuring the existence of an objective and fair due process mechanism, before nominating the Arbitrators to the Code Board or Code Appeals Board, the Member and/or KP Member whose conduct is being investigated or who is appealing a decision shall have an opportunity to inform the Arbitration Commission, in strictest confidence, which two (2) persons on the list of possible Arbitrators it does not want to be appointed to the Code Board or Code Appeals Board, which in no case shall represent more than twenty (20) percent of the persons on the list of possible Arbitrators (in respect of the appointment of Arbitrators to the Code Appeals Board, that percentage number also shall include the arbitrators on the list but who are disqualified because of their participation on the Code Board). Provided that it does not interfere with the performance of his or her duties, an Arbitrator may engage in other business during the term of being an Arbitrator, including while the Code Board or Code Appeals Board is investigating and adjudicating upon the alleged non-compliance by a Member and/or KP Member with its Undertakings. Decisions of the Arbitration Commission under this Article shall be by majority vote.
3. The responsibilities and powers of the Arbitration Commission shall include:
   1. to receive information or advice from the Bourse, governmental agency or from any natural or legal person or otherwise regarding a Member's and/or KP Member's potential non-compliance with the Code of Conduct, including its Undertakings and, as set forth in Article 9(2), to decide whether the Member's and/or KP Member's conduct should be investigated and, if so, to establish a Code Board for that purpose;
   2. to receive requests from Members and KP Members for appeals of the decisions of the Code Board and, in such cases, to establish a Code Appeals Board for that purpose;
   3. to appoint Arbitrators to a Code Board and to the Code Appeals Board and, where necessary, in accordance with Article 7, to consider complaints regarding Arbitrators and, where appropriate, to replace Arbitrators;
   4. immediately to notify the Bourse of any decision by the Code Board and the Code Appeals Board regarding its Members and/or KP Members so that the Bourse can communicate any information it is required to communicate to the Commission and/or to the Community authority in compliance with Article 17 of the Council Regulation, including the provision of an updated list of the Members and/or KP Members of the Bourse;
   5. based on the decisions of the Code Board and the Code Appeals Board, to formulate binding decisions, where appropriate, concerning suspensions and sanctions, as well as the publication of such suspensions and sanctions, to the Bourse as provided for under and in accordance with Chapter VI of this Code of Conduct; and
   6. generally to take all necessary or useful measures for the implementation and application of this Code of Conduct in view of assisting the Bourse with its continued listing in Annex V of the Council Regulation.
4. The responsibilities and powers of the Code Board shall include:
   1. subject to any appeal and as otherwise provided by this Code of Conduct, to formulate binding decisions, where appropriate, concerning all sanctions such as expulsions, suspensions etc., as well as concerning the publication of such suspensions and sanctions, to the Arbitration Commission as provided for under and in accordance with Chapter VI of this Code of Conduct;
   2. to arrange for and administer the access to information for its own behalf in order to be able to conduct any investigation and render any decision contemplated by this Code of Conduct, as well as provide any information to the Arbitration Commission which the Arbitration Commission may provide to the relevant Bourse so that the Bourse can provide such information to the Commission and/or to the Community authority where required per Article 17 of the Council Regulation; and
   3. generally to take all necessary or useful measures for the implementation and application of this Code of Conduct in view of assisting the Bourse with its continued listing in Annex V of the Council Regulation.
5. The responsibilities and powers of the Code Appeals Board shall include:
   1. except as otherwise provided by this Code of Conduct, to formulate binding decisions, where appropriate, concerning all sanctions such as expulsions, suspensions etc., as well as concerning the publication of such suspensions and sanctions, to the Arbitration Commission as provided for under and in accordance with Chapter VI of this Code of Conduct;
   2. to the extent permissible by this Code of Conduct, to arrange for and administer the access to information for its own behalf in order to be able to consider any appeal to a decision of the Code Board, as well as provide any information to the Arbitration Commission which the Arbitration Commission must provide to the Bourse so that the Bourse can provide such information to the Commission and/or to the Community authority where required per Article 17 of the Council Regulation; and
   3. generally to take all necessary or useful measures for the implementation and application of this Code of Conduct in view of assisting the Bourse with its continued listing in Annex V of the Council Regulation.
6. The Arbitrators of a Code Board shall be responsible for establishing the procedures for the Code Board (the "Code Board Procedures") in respect of its investigation and adjudication of any alleged non-compliance by a Member or KP Member with the Code of Conduct, which includes the Undertakings. The Code Board Procedures shall, however, be consistent with, and contain at a minimum, the elements set forth at Article 9(3) of this Code of Conduct for conducting an investigation and making a decision. The Code Board Procedures shall be established by majority decision of the Arbitrators.
7. The Arbitrators of a Code Appeals Board shall be responsible for establishing the procedures for the Code Appeals Board (the "Code Appeals Board Procedures") in respect of its consideration of an appeal of a decision of the Code Board. The Code Appeals Board Procedures shall, however, be consistent with, and contain at a minimum, the elements set forth at Article 9(5) of this Code of Conduct for reviewing the decision of a Code Board. The Code Appeals Board Procedures shall be established by majority decision of the Arbitrators.
8. The Code Board and Code Appeals Board shall publish and make available to the Arbitration Commission the Code Board Procedures or the Code Appeals Board Procedures, respectively and as the case may be. Further, the Code Board Procedures and the Code Appeals Board Procedures, as applicable, will be made known to the Member and/or KP Member whose conduct is being investigated.

Article 7

1. Arbitrators shall be governed by the following requirements:
   1. each Arbitrator shall, at all times, remain impartial and if, for any reason, this is not possible, or becomes impossible, the Arbitrator who cannot satisfy this requirement shall immediately notify with a motivated letter the Arbitration Commission and shall remove himself or herself from the Code Board or the Code Appeals Board, as the case may be;
   2. if for any reason an Arbitrator becomes aware of any possible conflict of interest in regard to his or her functioning on the Code Board or the Code Appeals Board, as the case may be, the Arbitrator shall immediately notify with a motivated letter the Arbitration Commission and shall remove himself or herself from the Code Board or the Code Appeals Board, as the case may be; and
   3. an Arbitrator shall not make publicly available any information provided to him or her in respect of any matter herein, unless such information is known to the public or where required to do so by law, and shall not otherwise use any such information for any commercial or other use or advantage.
2. Except where considered necessary for its determination and agreed to in writing by the Member or KP Member being investigated, in no case may an Arbitrator knowingly or intentionally review any confidential business secrets information of the Member and/or KP Member being investigated. In respect of the Code Board, in that case, the Code Board shall hire an independent professional(s) who does not trade in rough diamonds (e.g. forensic accountant, customs broker, gemmologist, lawyer etc.) to perform any investigative function the Code Board otherwise could have performed on its own, and the independent professional(s) will report its findings to the Code Board in writing. The Code Board shall be entitled to rely on those findings when rendering its decision.
3. Where a Member or KP Member being investigated has a reasonable basis upon which to believe that an Arbitrator is violating, or is likely to violate, any provision of Articles 7(1) or (2), or is not, or is likely not to be, objective and fair, that Member or KP Member can request the Arbitration Commission to consider whether that Member's or KP Member's concerns are reasonable. If the Arbitration Commission considers such concerns to be reasonable, the Arbitrator shall be removed from the Code Board or the Code Appeals Board, as the case may be, and shall be replaced by the Arbitration Commission. A decision made under this paragraph shall be completed within ten (10) days of the issue being referred to it and the Code Board or the Code Appeals Board shall convene or re-convene, as the case may be, within ten (10) days thereafter. During such period of time the proceedings under this Code of Conduct shall be suspended, and this also shall have the effect during such period of time of suspending the application of Article 9(3)(h) in the case of a decision of the Code Board and Article 9(5)(e) in the case of a decision of the Code Appeals Board. Decisions by the Arbitration Commission under this paragraph shall be by majority vote.
4. f for any reason an Arbitrator becomes incapacitated or otherwise cannot perform his or her duties and resigns, during such period of time the proceedings under this Code of Conduct shall be suspended, and this also shall have the effect during such period of time of suspending the application of Article 9(3)(h) in the case of a decision the Code Board and Article 9(5)(e) in the case of a decision of the Code Appeals Board. In such event, the Arbitration Commission shall appoint a new Arbitrator as soon as possible.

Article 8

The Bourse (except as provided at Article 9(9)) and its Members and KP Members must comply with the decisions of the Arbitration Commission whether or not an Arbitrator is for any reason subsequently removed from the list of arbitrators under the Arbitration Regulations.

Chapter VI - Investigation, Suspension and Sanctioning of a Member and KP Member

Article 9

1. In accordance with the requirements set forth herein, the Arbitration Commission shall be responsible for initiating investigations. Where a decision has been made to initiate an investigation, the Arbitration Commission shall refer that investigation to a Code Board, and that Code Board shall be constituted in the manner set forth in Article 6. The Code Board shall report its decision to the Arbitration Commission and the Arbitration Commission shall adopt the decision of the Code Board as its own decision. An investigation may be, or in the case of subparagraph (d) below, must be, initiated in accordance with the following procedures:
   1. the Bourse, a governmental body or any natural or legal person or otherwise may supply to the Arbitration Commission any information or advice indicating, and stating the grounds for such indication, that the Member and/or KP Member is or is likely violating, or has or likely has violated, the Code of Conduct, which includes the Undertakings;
   2. on the basis of the information or advice supplied under paragraph (a) above, as well as any additional information or advice upon which the Arbitration Commission may have requested from the person, body or entity supplying the information or advice, the Arbitration Commission shall decide whether there is a reasonable possibility that a Member and/or KP Member is or is likely violating, or has or likely has violated, the Code of Conduct, which includes the Undertakings;
   3. before making a decision to initiate an investigation, the Arbitration Commission can seek a response of the Member and/or KP Member who is the subject matter of the information or advice, but such response shall be accorded, at this stage of the proceeding only, limited weight, and further that the Arbitration Commission may withhold the identity of any person, body or entity who supplied the information where doing so is considered as vital to encouraging the person, body or entity to come forward with the information or advice (e.g. because he or she is an employee, supplier or customer);
   4. notwithstanding the above, however, the Arbitration Commission must initiate an investigation where the Bourse specifically requests that an investigation be initiated.
2. The Arbitration Commission shall complete the above procedure and decide whether to initiate an investigation within fifteen (15) days of first receiving the information or advice, including any supplementary information which it was subsequently provided or which it requested and received.
3. The Code Board shall investigate and issue a decision regarding any matter that it is instructed to consider by the Arbitration Commission, as well as any further matter related to a Member's and/or KP Member's compliance with the Code of Conduct, including the Undertakings, which becomes known or relevant during its investigation. In carrying out its investigation, the Code Board shall apply its Code Board Procedures and shall satisfy the following minimum due process requirements:
   1. notify the Member and/or KP Member, by registered mail or facsimile, that its conduct is being investigated, and such notice shall provide the Member and/or KP Member with sufficient information and sufficient prior notice to permit a full and effective answer to any and all allegations, although a Code Board may withhold the identity of any person, body or entity who supplied the information where doing so is considered as vital to encouraging the person, body or entity to come forward with the information or advice (e.g. because he or she is an employee, supplier or customer);
   2. the Member and/or KP Member being investigated shall be permitted to submit to the Code Board any and all information which the Member and/or KP Member considers relevant to the Code Board's consideration of the matter, and the Code Board shall consider such information;
   3. the Member and/or KP Member being investigated shall be entitled to appoint a representative or another Member of its Bourse to appear before, or make written or oral submissions to, the Code Board on its behalf, provided that the Member and/or KP Member notifies the Code Board of such appointment by registered mail;
   4. the Member and/or KP Member being investigated shall be permitted to making written submissions to or appear before the Code Board to provide oral submissions, which shall be held in private, and the Member and/or KP Member shall be entitled to call before the Code Board any witness or expert whom the Member and/or KP Member considers helpful, but in such case the Code Board shall have an unfettered right to pose its own questions to that witness or expert;
   5. in addition to any advice or information which may have been submitted to the Code Board by a person, body or entity in support of an investigation, the Code Board may consider any additional information which the Code Board considers relevant, and such additional information also shall be provided to the Member and/or KP Member being investigated so that it can respond to it, subject to the right of the Code Board to remove any information that identifies the person, body or entity who supplied the information in accordance with subparagraph (a) above;
   6. the decision of the Code Board shall be based solely on the information before it;
   7. where considered advisable by unanimous decision of the Arbitrators, or where required by Article 7(2) of this Code of Conduct, the Code Board shall retain an independent professional(s) to provide assistance or advice on any technical or investigative issue before it or is otherwise helpful to its determination, which advice shall be considered to be "additional information" for the purposes of paragraph (e) above, and in such case that professional shall be bound by the requirements of Articles 7(1) and (2) of this Code of Conduct as if the professional was an Arbitrator and in such case he or she also shall be considered to be an agent of the Code Board; and
   8. except where the investigation or decision has been temporarily suspended in accordance with Articles 7(3), 7(4) or 9(10) of this Code of Conduct, the Code Board shall notify the Arbitration Commission, as well as the Member and/or KP Member being investigated and the Bourse by registered mail, of its decision within seventy-five (75) days of being referred the matter by the Arbitration Commission, and shall provide its Bourse and the Member and/or KP Member, by registered mail, reasons for that decision within thirty (30) days thereafter. In the event of a dissenting opinion, the Arbitrator who dissents also shall provide his or her written reasons. The period contemplated by this subparagraph only may be extended with the written agreement of the Member and/or KP Member being investigated.
4. Upon receiving the decision referred to in Article 9(3)(h) above, a Member and/or KP Member may, within ten (10) days thereof, appeal the decision of the Code Board to the Arbitration Commission. Notice of a request for an appeal shall be sent to the Arbitration Commission by registered mail. Upon such appeal, the Arbitration Commission shall, within fifteen (15) days thereof, establish a Code Appeals Board to consider the appeal. The Code Board shall be entitled to decide whether the Member and/or the KP Member who is appealing the Code Board's decision should be suspended from the Bourse until the Code Appeals Board has rendered its decision.
5. The Code Appeals Board shall review any decision of a Code Board referred to it by the Arbitration Commission and, in accordance with this Article 9, can uphold, vary or replace any decision of the Code Board. An appeal shall be strictly limited to the decision of the Code Board, including to the information which was before the Code Board. Notwithstanding such limitation however, in accordance with subparagraph (d) below, the Code Appeals Board may consider reports prepared by independent professionals on its instructions. In considering an appeal, the Code Appeals Board shall apply the Code Appeals Board Procedures and shall satisfy the following minimum due process requirements:
   1. notify the Member and/or KP Member, by registered mail, of the Code Appeals Board and that such Board is responsible for considering the appeal;
   2. the appellate Member and/or KP Member shall be entitled to appoint a representative or another Member of the Bourse to appear before, or make written or oral submissions to, the Code Appeals Board on its behalf, provided that the appellate Member and/or KP Member notifies the Code Appeals Board of such appointment by registered mail;
   3. the appellate Member and/or KP Member being investigated shall be permitted to make written submissions to and appear before the Code Board to provide oral submissions, which shall be held in private, but such written and oral submissions shall be limited entirely to the information which was before the Code Board, except that this shall not constrain the right and ability of the appellate Member and/or KP Member to provide written and oral submissions which addresses any report of an independent professional submitted to the Code Appeals Board in accordance with subparagraph (d) below;
   4. where considered advisable by unanimous decision of the Arbitrators, or if required by Article 7(2) of this Code of Conduct, the Code Appeals Board shall retain an independent professional(s) to review and provide its views on the quality and conclusions set forth in any report prepared by an independent professional retained by the Code Board under Article 9(3)(g), which views shall be considered to be "additional information" for the purposes of subparagraph (c) above, and in such case that professional shall be bound by the requirements of Articles 7(1) and (2) of this Code of Conduct as if the professional was an Arbitrator and in such case he or she also shall be considered to be an agent of the Code Appeals Board; and
   5. except where the investigation or decision has been temporarily suspended in accordance with Articles 7(3), 7(4) or 9(10) of this Code of Conduct, the Code Appeals Board shall notify the Arbitration Commission, as well as the Member and/or KP Member being investigated and the Bourse by registered mail, of its decision within forty-five (45) days of being referred the matter by the Arbitration Commission, and shall provide the Bourse and the Member and/or KP Member, by registered mail, reasons for that decision within thirty (30) days thereafter. In the event of a dissenting opinion, the Arbitrator who dissents also shall provide his or her written reasons. The period contemplated by this subparagraph only may be extended with the written agreement of the Member and/or KP Member being investigated.
6. All decisions of the Code Board and the Code Appeals Board shall be by a majority vote of the Arbitrators. The evidentiary standard of proof to be applied by the Code Board and Code Appeals Board shall be the standard of proof applicable under English law. Furthermore, without prejudice to the right of the Arbitration Commission to issue a decision to suspend a Member and/or KP Member under Article 9(11), or any right of a Member and/or KP Member to voluntarily suspend its membership of the Bourse under Articles 9(10), a Member and KP Member shall be presumed innocent until proven otherwise, including where a Member and/or KP Member has appealed a finding of guilt by the Code Board.
7. In accordance with the procedures set forth herein, the Code Board shall be responsible for investigating and issuing a decision regarding any alleged non-compliance (a "Violation") by a Member and/or KP Member with the Code of Conduct, which includes the Undertakings, and the Code Board shall complete such function as soon as reasonably possible, but, for greater certainty, in any event within the timetable set forth at Article 9(3)(h) of this Code of Conduct. The Code Appeals Board shall be responsible for reviewing the decisions of the Code Board, and shall complete such function as soon as reasonably possible, but, for greater certainty, in any event within the timetable set forth at Article 9(5)(e) of this Code of Conduct. In making its determination, the Code Board and the Code Appeals Board, as the case may be, shall be directed by the following requirements:
   1. where the Code Board or, on appeal, the Code Appeals Board determines that a Member's Violation is a serious violation (a "Serious Violation"), and where that person is not a director, managing director, general manager, director or active partner with a power of attorney of a KP Member, that Member shall be expelled from the Bourse and, in that case, it shall be barred from being a Member of the Bourse thereafter, as well as from being a director, managing director, general manager, director or active partner with a power of attorney of a KP Member; or
   2. where the Code Board or, on appeal, the Code Appeals Board determines that a Member's Violation is a Serious Violation, and where that person is a director, managing director, general manager, director or active partner with a power of attorney of a KP Member or KP Members, then that Member and that KP Member or KP Members shall be expelled from the Bourse and, in that case, the Member, along with the KP Member or KP Members, shall be barred from being a Member or KP Member of the Bourse thereafter, but such expulsion shall not be extended to any other Member of that KP Member or KP Members who is a director, managing director, general manager, director or active partner, unless such other Member knowingly or intentionally participated or assisted in the Serious Violation; or
   3. where the Code Board or, on appeal, the Code Appeals Board determines that a KP Member's Violation is a Serious Violation, then that KP Member shall be expelled, along with all Members who are a director, managing director, general manager, director or active partner with a power of attorney of that KP Member and, in that case, all further KP Members in which those Members are director, managing director, general manager, director or active partner with a power of attorney ("Secondary KP Members") also shall be expelled, but that expulsion shall not be extended to any other Members who are director, managing director, general manager, director or active partner of the Secondary KP Members, unless such other Members knowingly or intentionally participated or assisted in the Serious Violation; or
   4. where the Violation is determined not to be a Serious Violation, the Code Board or the Code Appeals Board may impose an effective, proportionate and dissuasive sanction on the Member and/or any relevant KP Member, which can include, a blame, suspension and/or fine of up to (The £ Sterling equivalent of) 250,000.00 Euros. When a fine has been set, the Member and/or the KP Member shall be suspended until the fine is paid.
8. Except as provided at paragraph 9 of this Article, whether a Violation constitutes a Serious Violation shall be at the sole discretion of the Code Board or, on appeal, at the sole discretion of the Code Appeals Board. In making that determination, the Code Board and the Code Appeals Board may consider any factor it considers relevant, including, among other things, the following:
   • whether the Violation was committed knowingly or intentionally,
   • the nature of the Violation,
   • the frequency of the Violation,
   • whether the Member and/or KP Member has previously committed a Violation, whether or not that Violation relates to the present Violation;
   • whether the Member and/or KP Member had, or has since, adopted due diligence procedures to prevent Violations from occurring or re-occurring,
   • any steps the Member and/or KP Member has taken to remedy the Violation and ensure it does not re-occur,
   • whether notice of the Violation came from the Member and/or KP Member or from a third party,
   • the potential impact of the Violation on the reputation of the Bourse and/or the diamond industry generally, and
   • the degree of impact which the Violation may have had on facilitating or promoting trade in conflict diamonds.
9. Where, following the decision of a Code Board or, on appeal, the Code Appeals Board, the Arbitration Commission renders a decision to the Bourse to the effect that such Member or KP Member has committed a Violation, but that such Violation is not a Serious Violation, the Bourse can reject that determination where it is, or they are, of the view that the Violation constitutes a Serious Violation. In such case, the Member shall be expelled, as well as, where applicable, any KP Member or KP Members where the circumstances set forth at Article 9(7)(b) apply. Similarly, where the decision is made in respect of a KP Member, the Bourse call expel the KP Member, as well as any other KP Members and Members in accordance with the circumstances set forth at Article 9(7)(c). However, before making a decision herein, the Bourse shall provide the Member and/or KP Member with an opportunity to appear before it and explain why, in that Member's and/or KP Member's view, the Violation does not constitute a Serious Violation. The Member's and/or KP Member's submission shall be limited to this narrow issue only. For greater certainty, the Bourse cannot reverse a Code Board's or Code Appeals Board's determination of guilt.
10. Where a Member and/or KP Member is notified pursuant to Article 9(3)(a) of this Code of Conduct that the Arbitration Commission has initiated an investigation and established the Code Board to conduct such investigation, or at any time thereafter, the Member and/or KP Member may request the Code Board or, where a decision is being appealed, the Code Appeals Board to suspend its investigation where the Community authority or any other governmental department, authority, body, agent, tribunal, court or the like, whether it be of a Member State, the Commission or a foreign government, is investigating, or is considering whether to initiate an investigation concerning, the same or similar conduct being considered by the Code Board or Code Appeals Board (a "Government Investigation"). Where such request is made by the Member and/or KP Member, the Code Board or the Code Appeals Board, as the case may be, shall suspend its investigation and not render its decision until the Government Investigation is completed, or any time sooner where the Member and/or KP Member requests that the Code Board's investigation or Code Appeals Board's review be continued and its decision be rendered. The outcome of the Government Investigation shall not bind the decision of the Code Board or Code Appeals Board, but it may be taken into account. Any request by a Member and/or KP Member under this paragraph shall be made, by registered mail, to the Bourse, the Arbitration Commission and to the Code Board or, where it involves an appeal, to the Code Appeals Board. A suspension considered hereby also shall have the effect of suspending the time periods referred to at Articles 9(3)(h) and 9(5)(e), as the case may be.
11. Where it is alleged that a Member and/or KP Member has committed a Violation which the Code Board considers may be a Serious Violation, the Code Board may issue a decision to the Arbitration Commission requiring the Arbitration Commission to issue a decision to the Bourse requiring the Bourse to suspend that Member and/or KP Member until its final decision has been rendered.
12. The rules and procedures regarding the suspension of members stated in the LDB Rules shall apply to any suspension of a Member and/or KP Member under this Article. During a suspension, the Member and/or KP Member shall be denied all the rights and privileges of being a member of the Bourse, including the rights and privileges associated with being a member of an organisation listed in Annex V of the Council Regulation, and the Member and/or KP Member may not, directly or indirectly, represent to any person that it is a Member and/or KP Member, or is otherwise associated with, the Bourse, except to the extent that such representation is necessary for defending itself regarding the alleged Violation
13. Except as provided at paragraph 9 above, the Bourse shall implement and, where necessary, enforce a decision of the Arbitration Commission regarding the suspension or sanctioning (including possible expulsion) of a Member and/or KP Member. Where a Member and/or KP Member has been suspended or expelled under and in accordance with this Article, the Bourse shall immediately notify the Commission and/or Community authority in accordance with this Code of Conduct, and as required by the Council Regulation, and shall, as soon as reasonably practicable, publish notice of that suspension or expulsion, as the case may be. Furthermore, the Bourse shall distribute such publication to each bourse which is a member of the World Federation of Diamond Bourses.