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The GIA has issued a recall of 424 diamond grading reports
The GIA has issued a recall of 424 diamond grading reports

Industry on high alert for undisclosed treated diamonds

The diamond industry has taken swift action in an attempt to address suspicions that hundreds of undisclosed treated stones have hit the global market.

The furore was instigated last week when the Gemological Institute of America (GIA) recalled 424 diamond grading reports. A GIA alert explained there was reason to believe approximately 500 colourless to near-colourless diamonds submitted to the organisation’s Israel laboratory had been subjected to an “undisclosed temporary treatment”.

“GIA believes that the treatment is a process that temporarily masks the inherent colour of the diamond and can lead to a higher grade,” the laboratory alert read, adding that the treatment could potentially improve the colour by up to three grades.

The GIA subsequently released a list of grading report numbers for the alleged treated stones, which identified four suspected parties – EGSD Diamonds, LYE Diamonds, Abramov Romok and Yair Matatov.

In addition, the GIA indicated it had “terminated submissions” from these clients, notified the relevant trade organisations of the incident and instructed anyone in possession of the diamonds to resubmit them for review.

Industry spurred to action

Rapaport Group, the company that owns online diamond trading network RapNet, was quick to issue its own trade alert warning its members to destroy any of the grading reports identified by the GIA.

“Buyers should be careful not to buy these diamonds based on the GIA grading reports and sellers should not sell the diamonds with these grading reports,” the Rapaport Group statement advised. “The best course of action is to cut the cancelled grading reports in half and return the diamond to the supplier against a full refund.”

Ernie Blom, WFDB president
Ernie Blom, WFDB president

The Israel Diamond Exchange (IDE) provided its own advice to members, with an official release stating, “Any diamonds traded that are on the GIA list should be handed over to the IDE’s legal department for guidance about what steps to take. Trading is not allowed for any stones on the GIA’s list.”

The statement followed a management meeting called by the IDE in order to determine what steps were required to address the issue. The IDE reported that it had since briefed state authorities, discussed the matter with World Federation of Diamond Bourses (WFDB) president Ernie Blom as well as the heads of other international diamond exchanges, and issued announcements to all relevant diamond industry bodies.

It was noted that the IDE had received reports that there were “no problems” with some of the stones the GIA had listed.

Regardless, Blom said he was “extremely concerned” by news of the undisclosed treated diamonds and that the WFDB had zero tolerance for such illegal activities.

“It is crucial that this kind of unlawful action is stamped out,” he said. “Our industry must come together to counter such activity, both for the good of our members and for the end consumer who is always uppermost in our minds.”

The latest update from the GIA stated that the treatment process was yet to be identified but that it was being “actively researched”.

The list of recalled GIA grading reports is available via the GIA website.

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Sunday, 21 July, 2019 04:20pm
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