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US Looks to Tighten Jewelry-Origin Rules

Kimberley Process is “inadequate,” government officials say.
Apr 18, 2019 5:11 AM   By Joshua Freedman
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RAPAPORT... The US government wants the jewelry industry to declare the origin of all materials in products, trade organizations learned this week.

State Department officials met with industry representatives on Monday to brief them on the plans.

The possible rules would cover all raw materials in jewelry, including diamonds, other gemstones, metals and additional parts, according to a source present at the meeting. It is believed chain of custody — the movement of an item from owner to owner — will potentially also fall under the new disclosure requirements. Further details of the proposal were unavailable at press time.

The Kimberley Process (KP), which regulates global rough-diamond exports, is “inadequate,” officials said during the meeting. A major part of that is the KP’s failure to expand its definition of conflict diamonds to include abuses by governments, the source noted, citing the officials. Their view was that the KP was “not doing enough,” and the government needed to find another way of verifying the origin of stones. 

The driving force behind the move is a belief that sales money is funding “maligned regimes,” the officials noted. They specifically mentioned Iran, Venezuela, and countries in Africa, and said the guidance was coming directly from President Donald Trump and Secretary of State Mike Pompeo.

“They think it’s important to US consumers to know the full chain of custody for every single thing that’s in their jewelry products,” the source said. “They were very not specific about how this could be accomplished.”

Most people present at the meeting agreed with the criticism of the KP, but they were “wary of the government coming in to regulate the industry,” the source said. “The industry needs some of this, but we have to be able to work with the state to create regulations that are actually accomplishable by the small businesses that fuel the jewelry industry.”

Solid traceability is achievable for diamonds and many precious metals, but almost impossible for colored gemstones, the source argued.

The State Department invited about 25 people to the meeting in New York. There were attendees from organizations including the American Gem Trade Association, Diamond Manufacturers & Importers of America, Jewelers of America, the Jewelers Vigilance Committee, and the Natural Color Diamond Association, as well as the New York-based Indian Diamond & Colorstone Association and the Diamond Dealers Club. Private companies were also present.

The State Department was not available for comment.

Image: A yellow diamond in a jeweler’s studio. (Shutterstock) 
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Tags: American Gem Trade Association, Chain of custody, Diamond Dealers Club, Diamond Manufacturers & Importers of America, Donald Trump, Indian Diamond & Colorstone Association, Jewelers of America, Jewelry, Joshua Freedman, Kimberley Process, KP, Mike Pompeo, natural color diamond association, new york, origin, provenance, raw materials, state department, traceability, US government
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