Brussels, 12/11/2002 (Agence Europe) - The European Commission is contemplating giving its clearance to the new distribution system of the South African company, De Beers, the number one company worldwide for raw diamonds, given that De Beers has agreed to make certain adjustments to its "Supplier of Choice" project. Last year, when De Beers was asking for an exemption for agreements concluded between its commercial branch, the Diamond Trading Company (DTC), and buyers of raw diamonds (a request notified on 3 May 2001), the Commission had informed the company via a statement of objections that some of the provisions of these agreements were likely to "restrict the trading autonomy of its clients/distributors". On the whole, the notified system initially provided for the marketing, over ten annual sales years, of certain quantities of diamonds to some 120 clients ("sightholders") who would have no advance knowledge of the number or type of precious stones proposed. De Beers also had the intention to put a questionnaire to its clients together with contractual commitments while reserving itself the possibility of distancing them from sales if they did not meet selection criteria. Furthermore, as these restrictions had been imposed by a company in a dominant position, the implementation of the project would have constituted abuse of dominant position. Amelia Torres, spokesperson for Commissioner Monti, pointed out that De Beers had agreed to make its sales system more flexible in order to dispel the Commission's fears and to obtain the exemption requested. Thus, an ombudsman, whose appointment will be subject to Commission approval, will proceed to verification concerning the selection of clients and the allocation of diamonds on the basis of information that De Beers must provide. The decisions of the ombudsman may also be taken before the courts if they are challenged by either of the parties. The questionnaire put to the potential buyers remains valid but the selection criteria will be reduced and based on more objective criteria. The number of questions will thus be reduced from 60 to 21 and will be re-formulated in order to "attenuate the prying nature of such questions". Furthermore, notes on confidentiality were included in the questionnaire to give those interested the assurance that any business secrets will be protected. In addition, "sightholders" will be designated for a period of 24 months and, if De Beers decides to put an end to the contract, it can only do so after giving six months notice instead of three months as initially foreseen. De Beers will also have more obligations to fulfil concerning the quantities of diamonds that it can put on the market. Thus, its clients will give an indication of their needs every six months, after which De Beers will announce what it intends to provide for the half year in question, information together with details concerning the kind of merchandise proposed. Commenting on these provisions, Amelia Torres insisted that the dominant position of De Beers did not mean that its distribution system was a cartel: "it is not an agreement. This is a system whereby De Beers selects its customers, the companies to which it will be selling its diamonds (…) There is nothing to prevent a company from organising a distribution system". At the present time, De Beers controls around 60% of the world's raw diamond supply and is at the origin of 43% of world production. Diamonds sold by the company always come from its own mines that it operates alone or in partnership and from its purchases from competitive third parties. The Commission published a communication in the Official Journal C273 (9 November) presenting all the changes proposed by De Beers in order to collect the observations made by third parties within one month from the date of publication. If no objection is raised, it proposes to adopt a favourable position towards the notified agreements.