(Rbc.ru) – The Russian Federation Finance Ministry believes that Russia needs to secure separate sale of synthetic and natural gemstones in the country’s legislation. Jewelry sellers must inform consumers about what kind of gems they buy. Control over separate sales of precious and synthetic stones should be carried out by the Federal Supervision Agency for Customer Protection and Human Welfare in cooperation with the Assay Chamber proceeding from the authority they have.
The Ministry of Finance and ALROSA have developed amendments to the legislation on precious stones that will oblige local jewelers to mark their goods having synthetic diamonds and sell them separately.
The Ministry of Finance supported the amendment to the law “On Precious Metals and Precious Stones” at the meetings held by the work group of the State Duma Committee on Natural Resources last spring and last summer. It stipulates that artefacts bearing the characteristics (properties) of precious stones are not precious stones. Alexander Ahpolov, Director of the Administrative Department of the Ministry of Finance, told this to RBC on Wednesday.
After the bill will be passed, it will be possible to introduce amendments to other acts that will protect consumers from synthetic diamonds sold under the guise of natural. Alexander Ahpolov is confident that the amendments under consideration are aimed at protecting the interests and rights of consumers to ensure fair competition for honest players in the market of precious metals and precious stones.
As such, synthetic stones are not a threat to the jewelry industry – it is a separate product. ALROSA’s concern stems from the fact that synthetic rough diamonds (and synthetic polished diamonds) are increasingly present in the market under the guise of natural gems – offered at jewelry stores and even in boxes containing polished diamonds that are traded on diamond exchanges.
Very often, the “substitution” occurs in the market of small diamonds, because they are not subject to mandatory certification and are not checked piece by piece. According to Alexander Ahpolov, this harms all bona fide players in the diamond industry undermining its reputation and consumer confidence, which in this case is deceived as well.
The Finance Ministry believes that Russia needs to affirm separate sales of synthetic and natural gemstones legislatively. Jewelry sellers must inform consumers about what kind of stones they buy.
“We need a law to oblige sellers of goods with synthetic diamonds to provide complete information about the origin of such stones,” Alexander Ahpolov said. He believes that control over separate sales of natural and synthetic gemstones should be carried out by the Federal Supervision Agency for Customer Protection and Human Welfare in cooperation with the Assay Chamber proceeding from the authority they have.
According to the data provided by Andrey Polyakov, Vice President of ALROSA, China alone is producing about 8 billion carats of synthetic diamonds. They are used in industry and science, but about 5% of consumers are willing to buy jewelry made of synthetic diamonds, Andrey Polyakov said. He agrees with the Ministry of Finance executive saying that today the main task is to oblige jewelry houses and jewelry networks in Russia to inform buyers in case their goods carry synthetic stones.
“There is no problem regarding the legality of the market dealing with artificial polished diamonds. The problem is that sellers must inform buyers before the transaction is closed that this is an artificial stone and this is a natural stone. So far, we have no notion describing the artificial polished diamond and we suggest it should be introduced“, he said. Artificial diamonds are those created by man, not nature.
“We addressed this issue in 2013. Now retailers are meeting us halfway with a question. Where is the guarantee, preferably 100% proof, that our goods will not contain synthetics? How can we help them solve the problem? Because if someone will find synthetic diamonds in an expensive jewelry piece produced by some brand, it is going to be a scandal in terms of reputation of a public company and in terms of consumer confidence towards the entire market. You have to start with the basics, that is to try and restore consumer confidence,” Andrey Polyakov said.
According to him, if there are many ads hanging around and claiming that a diamond ring is sold for 1,500 rubles, this begs the question, why the value of this precious stone is undercut so much.
“If thus far, there is an opportunity to sell polished diamonds regardless of their origin, not caring about whether they are synthetic or natural, then it is difficult to talk about restoring confidence. This situation needs to be changed. This is the kind of work aimed at further development of the Russian market. When we say that the biggest markets in the world are the United States, China and Brazil, we forget about Russia. The Russian jewelry industry is not in line with our middle class, so the Russians are buying diamond jewelry anywhere, but not in Russia. They are buying it from jewelry networks represented in Russia and from boutiques that offer them the appropriate quality. We were not happy with this situation. We discussed the matter with the Jewelers Guild and decided in collaboration with the Ministry of Finance to submit a bill to the State Duma as a proposal to introduce amendments to the legislation,” Andrey Polyakov said, explaining the history of amendments prepared for the law.