We want our customers and employees to have confidence that Liali is using its best efforts to both bar conflict diamonds from its inventory and sell diamonds that are "conflict free".

The questions and answers below will assist you in understanding the issue of conflict diamonds.

What are Conflict Diamonds?

Conflict diamonds are diamonds mined in certain African combat zones that have fueled and funded civil war and gross abuses against the civilian population. Such diamonds are estimated to currently account for less than 1% of the world diamond production.

What is the Kimberley Process?

As of 2006, approximately 70 countries have adopted a system to control the export and import of rough diamonds mined from January 1, 2003 onward. Known as the Kimberley Process Certification Scheme (KPCS), it requires that each shipment of rough diamonds--before stones are cut and polished--be in a tamper-resistant container and accompanied by a certificate of origin. At later stages of the diamonds' journey to market, rough diamonds also carry a certificate describing the shipment's contents and confirming that the stones are coming from a Kimberley Process participant. Any country declining to participate is effectively barred from the international diamond trade.

In addition, the Clean Diamond Trade Act was signed into law, by President George W. Bush on April 25, 2003, which codifies many of the provisions of the Kimberly Process. The U.S. Customs and Border Protection are responsible for enforcement at American ports.

What role does the jewellery industry have in protecting the diamond supply?

The most important contribution jewelers can make within our industry is to deal only with trade suppliers of diamonds and diamond jewelry that comply with KPCS. Liali fully supports this voluntary program of self-regulation.

What steps has Liali taken to safeguard its diamond supply?

Liali has taken concrete, comprehensive steps to offer for sale diamonds that are "conflict free":

Since January 2003, our trade suppliers of diamonds and diamond jewelry have been required to guarantee us that all diamonds they supply to us are conflict free by incorporating the KPCS warranty. They guarantee that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds. This warranty assures Liali that the vendor vouches for the legitimacy of the merchandise and that the vendor, in turn, has required the same warranty from their source of merchandise.

If a vendor refuses to guarantee that its diamonds and diamond jewelry are conflict free or if we have reason to believe that its merchandise came from questionable sources, we refuse to transact business with that vendor.

We train our sales associates about this program so that our customers have confidence that the diamonds we sell in our stores and over the Internet are "conflict free". Along with Kimberly Process, the other important measure that led to the successful reduction of conflict diamonds around the world was the International Certificate of Guarantees that goes hand-in-hand with all diamond imports.