Diamond Act 13 of 1999 in Namibia: A Comprehensive Guide to Diamond Licensing, Permits, Trading, Export and Compliance

Learn about Namibia’s Diamond Act 13 of 1999, including diamond licences, permits, dealers, cutting, exports, authorised representatives, security requirements, valuation, restricted areas and penalties.

Namibia’s diamond industry is one of the country’s most tightly regulated economic sectors. Because diamonds are high-value resources with significant economic, security and international trade implications, the law places strict controls on their possession, purchase, sale, processing, transportation and export.

The Diamond Act 13 of 1999 provides the principal legal framework for controlling and protecting Namibia’s diamond resources. The Act was signed by the President on 30 September 1999 and came into force on 1 April 2000 through Government Notice 83 of 2000.

The legislation establishes the Diamond Board of Namibia, provides for the office of the Diamond Commissioner, creates different categories of diamond licences and permits, and establishes extensive control measures covering both unpolished and polished diamonds.

For anyone considering entering Namibia’s diamond industry—whether as a dealer, cutter, tool-maker, researcher, contractor, exporter or service provider—understanding the Diamond Act is essential.

Important: This article is an informational guide based on the supplied text of the Diamond Act 13 of 1999. It is not a substitute for legal advice, regulatory confirmation or professional assistance from the relevant Namibian authorities.

What Is the Diamond Act 13 of 1999?

The Diamond Act 13 of 1999 is legislation designed to regulate Namibia’s diamond industry and establish mechanisms for controlling the possession, purchase, sale, processing, import and export of diamonds.

The Act has a broad regulatory purpose. It does not simply regulate companies that sell diamonds. It reaches across much of the diamond value chain.

Among other things, it provides for:

• The establishment of the Diamond Board of Namibia.
• The appointment and functions of the Diamond Commissioner.
• Diamond dealer licences.
• Diamond cutting licences.
• Diamond tool-making licences.
• Diamond research licences.
• Various diamond-related permits.
• Restrictions on possession of unpolished diamonds.
• Restrictions on buying and selling unpolished diamonds.
• Controls over diamond processing.
• Controls over imports and exports.
• Approval of premises used for diamond-related activities.
• Registration of authorised representatives.
• Security checks for people working with diamonds.
• Approval of contractors and subcontractors.
• Security plans.
• Regulation of restricted areas.
• Regulation of diamondiferous concentrate.
• Registration of diamond prospecting and mining vessels.
• Valuation and sealing of unpolished diamonds.
• Record-keeping and reporting requirements.
• Search, seizure and enforcement powers.
• Criminal offences and penalties.

The legislation therefore treats diamonds as a resource requiring a strong chain of custody from recovery through processing and ultimately to domestic or international markets.

Why the Diamond Act Matters to Businesses in Namibia

The diamond industry differs from many ordinary commercial industries because simply registering a company with the Business and Intellectual Property Authority (BIPA) does not automatically give a business the right to deal in diamonds.

A business may need to satisfy multiple regulatory requirements depending on what it intends to do.

For example, a company intending to buy and sell unpolished diamonds may need a diamond dealer’s licence. A business intending to polish diamonds for commercial purposes may require a diamond cutting licence.

For businesses that need to understand the requirements for these activities, the licensing process is covered in more detail in this guide on how to get a diamond dealer or cutter licence in Namibia.

Similarly, a company involved in diamond research, industrial tools or the movement of diamonds may fall under different licensing or permit requirements.

This creates an important distinction:

Company registration and diamond-sector authorisation are not the same thing.

A business should therefore determine its intended diamond-related activities before commencing operations.

The Diamond Board of Namibia

Part II of the Act establishes the Diamond Board of Namibia as a juristic person.

The Board’s statutory objectives include advising the Minister on matters relating to:

• Namibia’s diamond industry;
• The control and protection of Namibia’s diamond resources;
• Promotion and protection of the diamond industry; and
• Other matters relating to diamond control and protection that may be prescribed.

The Board also has powers that allow it to perform activities necessary to fulfil its statutory objectives.

For example, the Act provides that the Board may, in furtherance of its objectives:

• Acquire property;
• Enter into agreements;
• Obtain insurance; and
• Purchase, sell or possess unpolished diamonds.

The Board may also make unpolished diamonds available to the Namibian Police Force for enforcement operations.

Representation on the Diamond Board

The legislation provides for representation from different parts of the diamond industry.

The Board’s membership includes persons nominated by:

1. Large-scale producers;
2. Small-scale producers;
3. Recognised trade unions representing diamond-industry employees;
4. Diamond cutters;
5. Diamond dealers; and
6. Dealers in polished diamonds involved in jewellery manufacturing.

This structure reflects the intention to give different industry stakeholders a voice within the regulatory framework.

The Diamond Commissioner

The Act also establishes the position of the Diamond Commissioner.

The Commissioner is appointed by the Minister and is responsible for exercising powers and performing duties assigned under the Diamond Act.

The Commissioner plays an important administrative role in the licensing and permitting system.

For example, where the Minister grants a licence, the Commissioner issues the licence in the prescribed form once the applicable fee has been paid.

The Commissioner also performs functions involving:

• Licence endorsements;
• Permit issuance;
• Certificates of approval;
• Registration of authorised representatives;
• Notifications to applicants and licensees;
• Maintaining regulatory records; and
• Receiving certain documents and returns.

The regulatory system therefore separates policy and ministerial decision-making from many of the administrative functions associated with licences and permits.

Diamond Licences Under the Diamond Act

One of the most important parts of the legislation is Part IV, which deals with licences.

The Act provides for four principal types of diamond licences.

1. Diamond Dealer’s Licence

A diamond dealer’s licence entitles the holder to carry on business as a:

• Buyer of unpolished diamonds;
• Seller of unpolished diamonds; and
• Exporter of unpolished diamonds.

This is one of the most important licences for businesses operating in the commercial diamond trading sector.

A person should not assume that an ordinary trading or company registration certificate allows them to buy and sell unpolished diamonds.

The Diamond Act specifically regulates this activity.

2. Diamond Cutting Licence

A diamond cutting licence permits the holder to polish diamonds for business or trade.

The Act defines “polishing” broadly. It includes processes such as:

• Sawing;
• Cutting;
• Cleaving;
• Dividing;
• Faceting; and
• Altering a diamond.

Consequently, businesses involved in commercial diamond processing should carefully determine whether their activities fall within the scope of diamond cutting.

3. Diamond Tool-Making Licence

A diamond tool-making licence relates to industrial uses of diamonds.

It permits the holder to:

• Set unpolished diamonds in tools, implements or other articles; or
• Crush or alter diamonds for trade purposes.

This category is particularly relevant to industrial businesses that use diamonds in specialised equipment rather than simply selling gemstones.

4. Diamond Research Licence

A diamond research licence allows the holder to conduct research and tests in connection with diamonds.

However, the Act specifically distinguishes research from commercial diamond polishing.

A research licence does not authorise the holder to polish diamonds for business or trade.

Requirements for Applying for a Diamond Licence

The licensing process is not simply a matter of completing a form.

Under section 16, an applicant must apply to the Minister on the prescribed form and provide the required information and application fee.

The Minister may investigate an application before making a decision.

For individuals or partnerships, important eligibility requirements include Namibian citizenship or permanent residence and registration as a taxpayer in Namibia.

For companies and close corporations, the legislation requires incorporation and registration under Namibian law together with registration as a Namibian taxpayer.

Where a company is yet to be incorporated, an undertaking to incorporate and register the company may be relevant to the application process.

Background and Integrity Requirements

The Diamond Act places significant emphasis on the integrity of people involved in the industry.

Applications may be affected by matters including:

• Insolvency;
• Mental incapacity as specified by the Act;
• Previous convictions under the Diamond Act;
• Fraud or dishonesty convictions;
• Certain offences involving unlawful diamond dealing or possession; and
• Involvement in unlawful diamond-related activities.

These considerations can also extend to directors, members, controlling-interest holders and people who can exercise influence over the affairs of a prospective licensee.

This is a significant compliance consideration for investors.

A prospective investor should therefore conduct proper due diligence before structuring ownership or management of a diamond-related company.

Controlling Interests in Diamond Businesses

The Act contains specific provisions dealing with changes in ownership.

A controlling interest can include:

• Direct or indirect beneficial ownership of 50% or more of issued share capital;
• Control of 50% or more of voting power; or
• The power to appoint or remove a majority of directors.

For close corporations, the definition similarly focuses on 50% or more ownership or voting control.

Why This Matters

A licensed diamond company cannot necessarily treat a change in ownership like an ordinary corporate transaction.

Section 22 requires prior written approval from the Minister before a controlling interest in a licensed company or close corporation is sold, disposed of, received or acquired.

This means investors contemplating:

• Buying a diamond business;
• Selling shares;
• Changing controlling shareholders;
• Restructuring ownership; or
• Transferring effective control

should first determine whether ministerial approval is required.

Failing to comply can result in serious penalties.

Diamond Licence Business Premises

The Diamond Act also regulates the physical premises where licensed activities take place.

A licence cannot be issued unless the premises where the authorised activities will be conducted have been approved by the Minister.

The Minister may investigate the premises and impose reasonable conditions.

This is particularly important because diamond-related activities require security and traceability.

A licensee cannot simply move to another location or materially alter relevant business premises without considering the approval requirements under the Act.

Displaying a Diamond Licence

A licensee must display their name and a description indicating the relevant licensed status in a conspicuous position outside the premises.

For example, the premises should clearly indicate whether the business is operating as a:

• Licensed diamond dealer;
• Diamond cutter;
• Diamond tool-maker; or
• Diamond researcher.

This requirement contributes to transparency and helps distinguish authorised operators from unauthorised businesses.

How Long Are Diamond Licences Valid?

The validity period depends on the licence category.

Under section 20:

Licence	Statutory validity framework
Diamond dealer’s licence	Not more than 5 years, as determined by the Minister
Diamond cutting licence	Not less than 10 years, as determined by the Minister
Diamond tool-making licence	Not less than 5 years, as determined by the Minister
Diamond research licence	Period determined by the Minister

Licence renewal applications generally need to be submitted at least three months before expiry, unless a later date is allowed for good cause.

Businesses should therefore maintain a compliance calendar rather than waiting until a licence is about to expire.

Can a Diamond Licence Be Transferred?

A diamond licence is not freely transferable.

Section 21 requires prior written approval from the Minister before a licensee may sell or otherwise dispose of the licence or allow another person to acquire a direct or indirect interest in it.

This is an important difference between ordinary commercial assets and regulated diamond-sector rights.

A licence should therefore be treated as a regulated authorisation rather than an ordinary business asset that can simply be sold to another party.

Preference for Namibian Citizens, Products and Services

Section 24 contains an important local economic participation principle.

Diamond licence holders, as well as approved contractors and subcontractors, are required—subject to efficiency, economy and practicability—to give preference to:

• Qualified Namibian citizens for employment;
• Products, materials and equipment manufactured or produced in Namibia;
• Services supplied by Namibian-based service providers; and
• Training programmes that promote the development of Namibian employees.

The provision also refers to the advancement of persons who were socially, economically or educationally disadvantaged by past discriminatory laws or practices.

For companies entering the diamond industry, this means local participation should be considered as part of the business model and compliance strategy.

Suspension and Cancellation of Diamond Licences

A licence may be suspended or cancelled in various circumstances.

These include situations where:

• Materially false information was provided;
• The licence was transferred without required approval;
• A controlling interest was transferred without approval;
• Licence conditions were breached;
• The Diamond Act was contravened;
• The licensee no longer meets eligibility requirements;
• A relevant disqualification arises; or
• The licensee stops conducting the activities authorised by the licence.

Before suspension or cancellation, the Minister generally gives the licensee an opportunity to show cause why the licence should not be suspended or cancelled.

However, businesses should not interpret this procedural protection as permission to operate while ignoring compliance requirements.

Diamond Permits

Licences are not the only form of authorisation under the Diamond Act.

Part V establishes a separate system of permits.

The Minister may grant permits authorising activities that would otherwise not be permitted.

These include permits to:

1. Possess an unpolished diamond;
2. Sell or dispose of an unpolished diamond;
3. Receive or purchase an unpolished diamond;
4. Export an unpolished diamond;
5. Import an unpolished diamond;
6. Polish, crush or set an unpolished diamond;
7. Possess diamondiferous concentrate outside a restricted area;
8. Export diamondiferous concentrate;
9. Remove certain materials from restricted areas;
10. Export materials that may contain diamonds; and
11. Enter, reside, travel, work or visit a restricted area.

The specific authorisation required depends on the activity.

For example, businesses dealing with the movement of rough diamonds can review this guide on how to get a rough diamond export permit in Namibia.

Strict Controls Over Unpolished Diamonds

One of the strongest features of the Diamond Act is its regulation of unpolished diamonds.

The Act defines an unpolished diamond broadly as a diamond in its natural state, including a synthetic diamond that has not been altered after production.

The definition also includes:

• Crushed diamonds; and
• Partly processed diamonds,

subject to the statutory exclusions.

The legal controls surrounding unpolished diamonds are extensive.

Possession of Unpolished Diamonds

Section 30 generally prohibits a person from possessing an unpolished diamond unless the person falls within an authorised category.

These include:

• A lawful producer;
• A contractor or subcontractor acting within the applicable legal framework;
• A holder of an exclusive or non-exclusive prospecting licence, where applicable;
• A licensed person;
• A holder of a relevant permit; or
• A person lawfully acting under an agreement with an authorised person.

The penalty stated in the supplied Act for unlawful possession is severe: a fine of up to N$1 million, imprisonment for up to 20 years, or both.

This demonstrates the seriousness with which Namibia treats unlawful possession of unpolished diamonds.

Buying and Selling Unpolished Diamonds

The legislation also restricts who may buy and sell unpolished diamonds.

Generally, a person may sell or dispose of an unpolished diamond only if they fall within an authorised category, such as:

• A lawful producer;
• A qualifying prospecting licence holder;
• A diamond dealer;
• A holder of the relevant permit; or
• An authorised representative acting within the scope of their registration.

Similarly, receiving or purchasing unpolished diamonds is restricted to authorised persons.

This creates a regulated chain between the person legally entitled to sell a diamond and the person legally entitled to receive or purchase it.

The Importance of Chain of Custody

The Diamond Act effectively creates a legal chain of custody.

A simplified model looks like this:

Lawful recovery → lawful possession → authorised sale → authorised purchase → valuation/sealing → processing or export → documented movement

Breaking that chain can create significant legal risk.

For businesses, this means that purchasing a diamond should never be treated as an ordinary commercial transaction.

A buyer should be able to establish:

• Who possessed the diamond;
• Why that person was legally entitled to possess it;
• Who sold it;
• Whether the seller was authorised;
• Whether the buyer was authorised;
• Where the transaction took place;
• Whether the required valuation was completed;
• Whether the diamond was sealed where required; and
• Whether the appropriate records were created.

Diamond Processing Must Be Authorised

Section 35 prohibits unauthorised polishing, crushing or setting of unpolished diamonds.

Generally, these activities may only be performed by:

• A licensed cutter;
• A licensed tool-maker;
• A licensed researcher acting within the scope of the licence;
• An employee acting within the scope of employment;
• A relevant permit holder; or
• A person operating under a qualifying lawful agreement.

The penalty can reach N$1 million or 20 years’ imprisonment, or both.

This makes informal diamond processing particularly risky.

Where Can Diamond Transactions Take Place?

The Act regulates the premises where unpolished diamonds may be bought and sold.

Certain transactions must take place at:

• The business premises of a licensee;
• Other qualifying premises; or
• Premises specifically approved by the Minister.

This means that a buyer and seller cannot necessarily arrange an informal meeting at any convenient location and complete a diamond transaction there.

The location itself can be a regulatory issue.

Approval of Alternative Premises

Section 39 allows applications for approval of premises outside the ordinary business premises.

The Minister may investigate the proposed location and impose reasonable conditions.

The Act provides that such applications should be granted or refused within 30 days of receipt.

Authorised Representatives

Diamond businesses sometimes need individuals to conduct transactions on their behalf.

The Diamond Act therefore provides for authorised representatives.

A person may not purchase, sell, receive or dispose of an unpolished diamond on behalf of another person unless they are:

1. A natural person; and
2. Registered as an authorised representative under section 43.

This is an important compliance requirement for companies using employees, agents or representatives in diamond transactions.

Registration of an Authorised Representative

A person entitled to deal in unpolished diamonds may apply to have another natural person registered as their authorised representative.

The Minister may investigate the application.

The application may be refused if, among other things:

• The proposed representative is disqualified;
• The person does not meet prescribed requirements; or
• A sufficient number of authorised representatives are already registered for the applicant.

The Act provides for a decision within 30 days of receiving the application.

An authorised representative must also produce their registration certificate for inspection when requested by a person affected by their activities.

Businesses can also review this practical guide on how to register a diamond authorised representative in Namibia when determining the applicable registration process.

Valuation and Sealing of Unpolished Diamonds

Another major compliance mechanism is the valuation and sealing of diamonds.

When an authorised seller disposes of an unpolished diamond to a cutter, tool-maker, researcher or relevant permit holder, the diamond must generally be submitted for market-value determination before delivery.

The valuation considers factors including:

• The price agreed between the parties in an arm’s-length transaction;
• International market prices; and
• Relevant fees, charges and levies.

After valuation, the diamond is placed into a parcel and sealed according to the prescribed procedure.

The receiving party must take delivery of the diamond in the sealed parcel.

Export of Unpolished Diamonds

Section 45 provides another important safeguard.

An unpolished diamond generally cannot be exported unless it has first been submitted for market-value determination.

After valuation, it is placed into a sealed parcel.

The sealed diamond:

• Must not be dealt with except for export; and
• Must be exported in the sealed parcel.

This creates an important physical and documentary control over Namibia’s rough-diamond exports.

Record-Keeping Requirements

Diamond businesses must maintain appropriate records.

Section 46 requires specified producers, contractors, subcontractors, prospecting licence holders and licensees to maintain prescribed registers containing particulars concerning unpolished diamonds.

Entries must generally be made immediately after the relevant event.

Copies of the register must be transmitted or delivered to the Commissioner within 14 days after the end of each month, together with a written declaration concerning their truth and correctness.

Registers must generally be retained for at least three years after the last entry.

For a diamond business, proper record-keeping is therefore not merely an accounting preference. It is a statutory compliance responsibility.

Notes of Receipt or Purchase

When a licensee or relevant permit holder receives or purchases an unpolished diamond, a note of receipt or purchase must be completed in duplicate.

The original goes to the person who delivered or sold the diamond.

The recipient retains a copy.

The person who delivered or sold the diamond must also retain the original note for the required period.

This creates documentary evidence supporting the movement of the diamond through the regulated supply chain.

Security Checks for Diamond Workers

Diamond security is not limited to physical buildings.

Section 48 requires security checks for employees and other natural persons who may have access to unpolished diamonds or perform activities connected to them.

The relevant activities include:

• Winning diamonds;
• Recovering diamonds;
• Possessing diamonds;
• Buying;
• Selling;
• Disposal;
• Export;
• Delivery;
• Receipt;
• Processing;
• Sampling; and
• Handling.

If a person who previously passed a security check later becomes unsuitable, the relevant operator must ensure that the person stops performing the relevant activities.

For diamond businesses, employee screening is therefore an important component of regulatory compliance.

Contractors and Subcontractors

Diamond producers and certain prospecting operators cannot freely appoint contractors or subcontractors without considering the approval requirements under section 49.

Approval by the Minister is required in the circumstances specified by the Act.

The Minister may investigate applicants and must refuse an application where relevant statutory disqualifications apply.

The legislation also creates continuing obligations.

If a contractor or subcontractor later becomes disqualified or fails to meet applicable requirements, the approval may be suspended or revoked.

This means businesses need to monitor their contractors rather than treating approval as a one-time administrative exercise.

Diamond Security Plans

One of the most important operational requirements under the Act is the security plan.

Producers, contractors, subcontractors, certain prospecting licence holders and licensees must submit a security plan for approval.

The plan addresses matters such as:

• Security systems;
• Diamond transportation;
• Safe keeping of diamonds;
• Movement of employees;
• Movement of other people in relevant operational areas;
• Business-premises security; and
• Other relevant security systems and procedures.

A company operating in the diamond industry should therefore approach security planning as a core business function.

Why Security Plans Matter

A diamond security plan is not simply about preventing theft.

It can also support:

• Chain-of-custody controls;
• Employee access management;
• Transportation security;
• Inventory management;
• Regulatory inspections;
• Incident response;
• Accountability; and
• Protection of high-value assets.

The Act also restricts amendments to an approved security plan without prior written approval.

Finding a Diamond by Chance

What should an ordinary person do if they unexpectedly find an unpolished diamond?

The Diamond Act provides a specific procedure.

A person who finds or picks up an unpolished diamond by chance outside a restricted area where they are not authorised to prospect or mine must immediately take it to the nearest police official on duty.

The person must deliver the diamond to the police.

This is important because simply finding a diamond does not automatically create a legal right to keep it.

Finder’s Reward

The legislation also recognises the circumstances of a genuine finder.

Where an unidentified diamond is sold after the statutory notice process, the person who found it may receive an amount calculated at one-third of the sale proceeds, subject to the conditions of the Act.

Where the diamond is returned to its lawful owner or person entitled to possession, the finder may receive an amount calculated at one-third of the diamond’s fair market value as determined under the Act.

This provides an incentive for people to report diamonds rather than attempting to conceal or unlawfully sell them.

Restricted Diamond Areas

The Act establishes the concept of restricted areas.

These may include:

• Areas where onshore diamond mining takes place;
• Areas where bulk sampling for diamonds occurs;
• Registered diamond prospecting or mining vessels;
• Certain offshore installations and equipment;
• Places where diamondiferous concentrate is processed;
• Places where gravel is processed for diamond recovery; and
• Other areas declared restricted by the Minister through the Gazette.

Entry into these areas is controlled.

People generally require an appropriate permit unless they fall within one of the categories of persons expressly authorised to enter in the performance of their duties.

Diamondiferous Concentrate

Diamondiferous concentrate is another important concept under the legislation.

It refers to the end product of treating diamond-bearing host rock or sediment through a heavy-mineral concentration system before the diamonds themselves are removed through processes such as:

• X-ray sorting;
• Hand sorting; or
• Other methods.

The Act places strict controls on the possession and export of diamondiferous concentrate.

Generally, possession outside a restricted area requires specific legal authority.

Export also requires the appropriate permit.

Returning Diamonds to Namibia

Where diamondiferous concentrate is lawfully exported for processing, the unpolished diamonds recovered from it must be returned to Namibia within the period specified by the relevant permit.

This is another example of how the Act maintains control over Namibia’s diamond resources even when material temporarily leaves the country.

Exporting Materials That May Contain Diamonds

The regulatory framework extends beyond diamonds themselves.

The Act also controls the export of certain:

• Sand;
• Soil;
• Clay;
• Gravel;
• Stone;
• Rock; and
• Minerals

where there is reason to believe that they may contain unpolished diamonds.

A permit may be required.

Where diamonds are recovered from such exported material, the legislation requires their return to Namibia within the period and under the conditions specified in the permit.

Diamond Prospecting and Mining Vessels

Namibia has significant offshore diamond resources, making the regulation of marine diamond operations particularly important.

The Act provides for the registration of diamond prospecting or mining vessels.

A vessel used for prospecting or mining diamonds falls within the statutory framework and may itself constitute a restricted area unless the Minister declares otherwise.

Businesses involved in offshore operations can refer to this guide on how to register a diamond mining vessel in Namibia for additional information on this area.

This can also extend to installations, equipment and attachments associated with offshore diamond operations.

Importing Unpolished Diamonds into Namibia

Importation is also regulated.

Generally, a person may not import an unpolished diamond into Namibia without the appropriate permit.

There is, however, an exception for diamonds recovered outside Namibia from diamondiferous materials that were previously exported from Namibia and are being returned under the relevant statutory framework.

This reflects the Act’s emphasis on maintaining traceability of Namibian diamond-bearing materials.

Exporting Polished Diamonds

The Diamond Act has a separate provision dealing with polished diamonds under Part X.

This demonstrates the legislative distinction between:

• Unpolished diamonds;
• Partly processed diamonds; and
• Polished diamonds.

The regulatory treatment can therefore depend on the physical state and intended movement of the diamond.

Businesses should understand the specific requirements before arranging an international shipment. A practical resource on how to export polished diamonds from Namibia legally provides additional guidance on this subject.

A business should not assume that compliance requirements applying to rough diamonds automatically cover every activity involving polished diamonds.

Penalties for Diamond Offences

The penalties contained in the Act are substantial.

Several serious offences involving unpolished diamonds can result in:

• Fines of up to N$1 million;
• Imprisonment of up to 20 years; or
• Both.

Other compliance offences can attract fines of up to N$100,000 or imprisonment of up to two years.

Certain offences involving unauthorised licence transfers or controlling-interest transactions can attract fines of up to N$250,000 or imprisonment of up to five years.

These penalties demonstrate that diamond regulation is not a minor administrative issue.

Why the Penalties Are So Serious

Diamonds are:

• High-value;
• Easily transportable;
• Internationally traded;
• Difficult to trace without appropriate controls; and
• Vulnerable to illicit trade.

The regulatory framework therefore aims to protect both the resource and the integrity of Namibia’s diamond supply chain.

Practical Compliance Checklist for a Diamond Business

A business planning to operate in Namibia’s diamond industry should consider the following checklist.

Before starting the business

• Determine the exact activities the business will perform.
• Establish the appropriate legal entity where necessary.
• Register the business under applicable Namibian laws.
• Register for tax where required.
• Determine which diamond licence or permit is applicable.
• Confirm eligibility of directors, members and controlling-interest holders.
• Identify suitable business premises.
• Determine whether those premises require regulatory approval.
• Develop appropriate security procedures.
• Identify employees who may have access to diamonds.

Before buying or selling unpolished diamonds

• Confirm the legal status of the seller.
• Confirm the legal authority of the buyer.
• Verify any relevant licence or permit.
• Confirm that the transaction will occur at approved premises.
• Ensure required valuation procedures are followed.
• Ensure sealing requirements are complied with.
• Complete the appropriate receipt or purchase documentation.
• Update the required register.
• Preserve supporting records.

Before exporting

• Confirm that the exporter is legally authorised.
• Obtain the relevant export permit or licence where required.
• Have the diamond valued where required.
• Ensure the diamond is properly sealed.
• Maintain the required documentation.
• Confirm that the shipment corresponds with the sealed parcel.
• Retain appropriate records.

For employees and representatives

• Conduct required security checks.
• Register authorised representatives where applicable.
• Ensure representatives carry or can produce registration certificates.
• Control access to diamond storage and processing areas.
• Monitor changes in employee suitability.
• Keep employment and security records properly.

Common Mistakes New Diamond Businesses Should Avoid

Mistake 1: Assuming BIPA Registration Is Enough

Registering a company does not automatically authorise regulated diamond activities.

A company may be legally incorporated but still require a separate diamond licence or permit.

Mistake 2: Buying Diamonds From Unverified Sellers

A buyer should not rely merely on the seller’s word.

The legality of the seller’s possession and authority to sell should be verified.

Mistake 3: Using Unregistered Agents

A person acting on behalf of another in purchasing, selling, receiving or disposing of unpolished diamonds may need to be registered as an authorised representative.

Mistake 4: Moving Diamond Operations Without Approval

Changing business premises may trigger regulatory approval requirements.

A company should verify the implications before moving equipment, offices or processing operations.

Mistake 5: Ignoring Ownership Changes

Selling shares or changing control of a licensed diamond company can have regulatory consequences.

A corporate transaction should therefore be reviewed for Diamond Act compliance before completion.

Mistake 6: Treating Security as an Internal Matter

Security checks and security plans are part of the regulatory framework.

They should not be treated solely as optional internal policies.

Mistake 7: Poor Record-Keeping

Missing registers, receipt notes, valuation documents or other supporting records can create significant compliance problems.

Diamond Businesses Need More Than a Licence

Obtaining a licence is only the beginning of compliance.

A successful diamond business needs a system that connects:

Licensing + premises + personnel + security + documentation + valuation + transactions + transportation + export controls

A company that has a valid licence but cannot demonstrate where diamonds came from, who handled them, how they were valued or where they went can still face significant regulatory exposure.

This is why compliance should be integrated into the business’s daily operations.

What Entrepreneurs Should Do Before Entering Namibia’s Diamond Industry

For entrepreneurs and investors considering this sector, the best approach is to begin with the proposed business model.

Ask:

1. What exactly will the company do?
2. Will it buy or sell unpolished diamonds?
3. Will it polish diamonds?
4. Will it manufacture diamond tools?
5. Will it conduct research?
6. Will it import or export diamonds?
7. Will it use contractors?
8. Will employees handle diamonds?
9. Will an agent or representative act on behalf of the business?
10. Will the company operate in a restricted area?
11. Will it transport diamondiferous concentrate?
12. Will it conduct offshore operations?

The answers determine which parts of the regulatory framework are likely to be relevant.

BIPA Registration and Diamond Licensing Are Separate Steps

For a business intending to operate commercially in Namibia, corporate registration can form part of the establishment process, but regulated diamond activities require additional consideration.

This is particularly important for foreign investors.

A foreign investor should not assume that establishing a Namibian company automatically creates a right to participate in every part of the diamond trade.

The Diamond Act contains specific eligibility, ownership, licensing, premises and compliance provisions.

Professional regulatory advice should therefore be obtained before committing significant capital.

Final Thoughts on Namibia’s Diamond Act

The Diamond Act 13 of 1999 establishes a comprehensive control system for Namibia’s diamond industry.

Its central principle is clear: diamonds cannot simply be treated like ordinary commercial goods.

The law regulates the entire chain, from possession and purchasing to processing, valuation, sealing, record-keeping and export.

For businesses, some of the most important areas to understand are:

• The different diamond licence categories;
• The permit system;
• Eligibility requirements;
• Ownership and controlling-interest restrictions;
• Approved business premises;
• Authorised representatives;
• Security checks;
• Security plans;
• Contractor and subcontractor approvals;
• Valuation and sealing;
• Registers and transaction records;
• Restricted areas;
• Diamondiferous concentrate;
• Import and export controls; and
• The severe penalties for unlawful diamond dealings.

The Act also reflects a broader economic objective by requiring preference, where appropriate and practicable, for Namibian citizens, Namibian products, Namibian services and the development of local skills.

For anyone planning to establish a diamond-related business in Namibia, compliance should therefore be considered before the first transaction takes place.

A proper business structure, correct licence or permit, compliant premises, documented supply chain, secure handling procedures and accurate records can significantly reduce regulatory risk and help create a legitimate and sustainable operation.

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