EGL International fights EGL USA attempts to ban their reports

EGL International and the Israeli-based European Gemological Center (EGC) have reacted with indignation and shock following the announcement made on June 24 by EGL-USA, the New York affiliate of EGL, that it had “requested the U.S. Bureau of Customs and Border Protection and local authorities to assist it in preventing the importation and distribution of gemstones accompanied by illegal EGL gem grading certificates.”

In a statement issued in Antwerp, Belgium, Guy Margel, the founder of EGL, said that EGL-USA is an affiliate of EGL’s international network, and that the issue arises from a misunderstanding regarding the trademark Margel registered as early as 1970 in Belgium. EGL-USA started operating only in 1986.

“This has nothing to do with illegal or fake certificates, “Margel stated. “As the founder and president of EGL, I can assure that all the EGL Certificates issued in all our branches are valid and legitimate worldwide, including in North America.”

“We are disappointed and offended by the legal measures, as announced by EGL-USA, to prevent the use of diamond and colored gemstone grading reports that were issued by members of the EGL network who operate outside the U.S.,” said Guy D. Benhamou, the managing partner of EGL International. Benhamou noted that the announcement by EGL-USA came soon after his Ramat Gan-based lab had helped train gemologists from the EGL lab in New York in the detection of internal laser drilling methods, a process known as “KM” in the diamond industry and trade.

Dr. Menahem Sevdermish, president of the European Gemological Center and College (EGC) in Ramat Gan, recalled that in the more distant past he had spent weeks at the EGL lab in New York, working with the local staff to calibrate the diamond grading standards that are used at the lab, and coordinating this standardization with the affiliated EGL lab in Israel.

“In his statement, EGL-USA’s director, Mark Gershburg, said that ‘since 1986, EGL-USA has been a privately owned independent gem lab with no formal business relationship with any labs outside North America.’ That statement,” Sevdermish noted, “is not only far from the truth, but it is also contradicted by EGL-USA itself. The first thing one reads when accessing the home page of EGL-USA’s web site is a statement that says: ‘Since 1974, [the] European Gemological Laboratory, the largest network of international gemological laboratories in the world, has stood in the forefront, supplying the jewelry trade with critical information about diamonds and colored gemstones.’ By saying that, EGL-USA confirms its allegiance with the other labs worldwide, which is a foundation that has also served EGL-USA in building its reputation in the American market, ” Sevdermish stated.

“Therefore,” added Sevdermish, “I cannot but surmise that the legal steps that EGL-USA intends to take have little to do with upholding its trademarks and brand in North America, but everything with finding ways to stop the fair competition that we are offering them in their home market.”

EGL currently operates laboratories in Belgium, Canada, France, Israel, South Africa, South Korea, Turkey; the United Kingdom, and in the United States.

EGL’s involvement in the Israeli gemological community goes back to the early 1980s. In 1981, EGL’s founder, Guy Margel, was a partner in the establishment of the Gemological Institute for Precious Stones and Diamonds (GIPS), a lab that during its first years also issued EGL grading reports. Later, GIPS continued its activities independently. EGL International was established in 1993, and EGC started its operations in 1998. EGC—the European Gemological College—is one of leading institutes of gemological training in Israel, having graduated to date more than 3,000 students.

“The U.S. absorbs more than 65 percent of Israel’s polished diamond exports, which in total amounted to $4.5 billion in 2002. Consequently, many of our grading reports also end up in the American market, and they have gained recognition across its breadth and length. EGL-USA may not like that trend, but its attempts to ban our reports and its referring to the grading reports of affiliated labs issued outside North America as illegal are simply an abomination. We regret EGL-USA’s efforts to undermine EGL’s global reach and prestige,” Benhamou noted.

Sevdermish believes that EGL-USA’s strategy is both misguided and shortsighted. “Diamonds are a border-crossing commodity, and so are the grading reports that accompany many of them. It is safe to assume that diamonds with reports issued by EGL-USA also come to Israel. In fact, I think that at any moment in time we have many hundreds of them circulating here in the market. Should we declare these reports illegal, too? And what about diamonds traded on-line? Will consumers not be able to buy diamonds that come with EGL certificates that were not issued by our North-American colleagues?” he asked.

“Let it be said that we have no intention to fall victim to, what currently seems to us, the unwarranted intentions and actions of EGL-USA,” Benhamou said. “Naturally, we will do what is necessary to protect our reputation and interests in the international diamond jewelry market ”