Maintaining Diamond Pipeline Integrity
Everyone is responsible for correctly disclosing the nature of the product they are selling. Unknowingly selling undisclosed synthetic diamonds as natural diamonds is the responsibility of the seller and can lead to commercial penalties as well as criminal charges.
Diamond Pipeline Integrity is centered on recognizing disclosure risks and taking steps to mitigate those risks. Part of this process may include use of Diamond Verification Instruments, as listed in the ASSURE directories.
Ensure your practices are aligned with national regulations and laws. Familiarize yourself with your local trade organization’s guidelines to understand your legal responsibility when it comes to selling undisclosed synthetic diamonds.
The following steps are designed to help you put the right procedures and ensure your business is protected from undisclosed synthetic diamonds.
Map Your Supply Chain and Identify Risks
You should map your diamond supply chain, both internal and external, and identify where undisclosed synthetic diamonds could enter your business. This risk isn’t limited to your diamond suppliers; other risks may include customer returns, contractors involved with equipment repairs, and even internal risk of stone ‘switching’ or mixing.
For each identified area, assess the level of risk: low, medium and high. For example, the risk level would be considered low if you purchase rough diamonds in marked tamper proof packaging from diamond mining companies that adhere to recognized standards.
In contrast, the risk level is deemed high if you purchase polished diamonds on the open market from an unknown supplier.
Once you have discovered risks, you should introduce procedures to address them. Methods of reducing your risk factors are described below:
Request written warranties from your suppliers guaranteeing that the diamonds they supply are natural. Ensure your suppliers have incorporated the following World Federation of Diamond Bourses warranty on every invoice:
“The diamonds herein invoiced/on memo are exclusively of natural origin and untreated based on personal knowledge and/or written guarantees provided by the supplier of these diamonds.”
Be prepared to conduct due diligence on your suppliers, customers and partners. Are they certified by the Responsible Jewellery Council, for example? Ensure your counterparties adhere to the World Diamond Council System of Warranties Guidelines to confirm the integrity of your pipeline.
Secure diamonds in marked tamper proof packaging. This is especially important when diamonds are transported. Work with reputable logistic company experienced in transportation of high value goods and insist on the diamonds being carefully sealed.
Use an inventory management system to track individual stones and parcels and highlight internal errors. By keeping track of where, and with whom, the individual diamonds are, you can easily make spot checks and investigate discrepancies.
Install a security system to mitigate stone ‘switching’ and monitor the entrances and exits of your facilities. By doing this, you are minimizing the risk of natural diamonds being switched to synthetic diamonds.
Differentiate between product flows if you handle both diamonds and synthetic diamonds. For example, do not handle both products in the same room or with the same instruments.
Test your diamonds (in-house or through a recognized laboratory) to assess whether they are natural diamonds or synthetic diamonds, or in need of further analysis.
The ASSURE Directory offers objective information about Diamond Verification Instruments from a range of manufacturers. Before you choose which instrument to buy (or when researching third-party labs), consider the following:
- The type of diamonds used in your operations (size, color, shape, and loose/mounted).
- The volumes of diamonds processed as large volumes of melee will require different automation than small numbers of larger stones.
For companies that handle melee sized goods, you may wish to refer to the De Beers Melee Assurance Protocol for guidance.