As we all know, GIA has
banned a number of clients for repeatedly not disclosing their stones were
HPHT-processed, to thwart what the lab apparently views as attempts to fool it. All
the publicity from this has served as a welcome reminder that HPHT disclosure
is required at every stage of the pipeline—even before submitting to labs.
Last week, GIA officials briefed industry association
officials about what they did. Two things quickly become clear: 1) None of
these guys that were caught were particularly big players. 2) No one is sure what
to do with this information.
Unfortunately, cutting someone off from GIA is not as harsh
as penalty as it would seem: There have been instances of clients who were cut
off from GIA who, according to one lawsuit, submitted
to the lab through third parties. It’s the after-effects that could have more impact. BHP has already
indicated it will take take action against anyone cut off from GIA. I know
the industry associations want
to take action against them too. But there really isn’t a rulebook here.
This isn’t a situation like what happened in Israel, where a trader was caught smuggling diamonds by the authorities and later
expelled from the bourse. Everyone is basically going on GIA’s word. I have
to say, it isn’t clear how JCK will
treat the names either, if they are ever officially released to us.
As much as this industry needs to step up its self-policing,
it can be a tricky business.
One more thing … we have recently gotten comments asking why
HPHT should be disclosed in the first place. After all, it’s a permanent,
irreversible, not always detectable treatment. As one person said:
What is the damage, A poor colored
diamond is now a great colored diamond and this is permanent. Let us understand
that HTHP finished what Mother Nature left Undone.
True enough. And yet in the past few weeks, I interviewed two
retailers who sell HPHT stones. When I asked about the consumer reaction to the stones, fascinatingly, they both, in separate interviews, gave me the same answer. They said that about 70 percent of consumers have no problem with
buying an HPHT stone. But about three out of ten consumers do.
So, most consumers don’t care about the process. But there
are some who are less comfortable with the HPHT “extra step.” And
for them, as well as overall consumer confidence, it must be disclosed.
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