The Jewellers Association of Australia (JAA) has announced it is working with the National Industry Advisory Council to develop a list of “suitable” domestic and international diamond grading laboratories.
JAA Code of Conduct chair Colin Pocklington indicated that the JAA had always intended to develop the diamond grading guideline but that it was appropriate to address the issue now given RapNet’s decision.
In order to remain compliant with the JAA Code of Conduct, retailers must issue customers with grading certificates from “reputable” laboratories for any diamond-related purchase weighing 1-carat or more. The Code of Conduct aims to provide the industry with guidance on how to comply with consumer and trade practice law.
While Pocklington was unable to comment on the JAA’s stance with regards to the reliability of EGL certification, he did state that the association had received several consumer complaints regarding EGL certificates in the last few years.
The JAA is expected to publish its report on diamond grading laboratories in early November.
Mixed reactions
As previously reported by Jeweller, RapNet recently announced it would no longer be listing grading reports from any EGL branch as of 1 October 2014.
RapNet cited concerns surrounding the “confusion and inconsistency” in EGL’s reports as well as the misrepresentation of Gemological Institute of America (GIA) terminology to “overstate” the quality of a diamond as the reasons for its decision.
Polygon, a gemstone and jewellery trading network, was quick to follow suit, having stopped the listing of certificates from EGL International laboratories from 17 September 2014.
“The general consensus from the industry supports the restriction of the trade of EGL International goods, due to the discrepancies in grading standards from those of the GIA,” Polygon stated in a press release.
Trading platforms IDEX Online and GemFind, however, stated they would continue to list the reports.
“We feel it is crucial to remain unbiased as a service provider and allow everyone to compete within the network and leave the decision of what is bought and sold up to our members,” GemFind CEO Alex Fetanat said.
EGL branches critical of RapNet decision
EGL South Africa was the first to express its “disappointment” with RapNet’s decision to group it with other EGL branches that did not uphold its ethics and grading policies.
EGL USA responded similarly, with director Mitch Jakubovic saying that RapNet’s move “penalises us for our name alone”.
“EGL USA is in no way affiliated with any EGL-named laboratories outside of North America,” he attested, adding that EGL USA had gone so far as to bring trademark infringement and false advertising claims against EGL laboratories outside of North America for both “their inflated grading practices and improper use of the EGL name in the US”.
“These legal actions reinforce an existing customs border ban on their reports, established over a decade ago,” Jakubovic said.
EGL International denied the existence of such a ban, stating in a release that “EGL certificates are legitimate and issued legally worldwide”.
The laboratory further added that “there is no single, international standard for diamond grading that has national or international status or acceptance” and that grading standards are subjective.
“Other networks have not taken this unusual step as it would impede the premise on which diamond trading networks operate: conducting free trade that takes into account the parameters of the diamond grading reports that accompany the diamonds in their pricing structure,” the EGL International release stated.
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Diamond grading reports banned