Before the introduction of the regulation, importers of polished diamonds had up three days to decide whether they planned on buying them, after which they required to pay a 0.1 percent import duty. With effect from May 1, 2018, they will now be able to hold the goods for 30 days before making a final decision.
The new regulation will remain in force until October 31, 2018, at which point it will be re-evaluated. It will apply to parcels of goods with a minimum value of $50,000. It does not apply to rough diamonds, which in any case are not subject to the import duty.
Critics of the three-day tax-free examination period had complained that it served as a disincentive to Israeli diamond companies bring in a fuller range of polished diamonds to the trading center in Ramat Gan, discouraging them from testing the market with goods with more marginal demand, so as to avoid being required to pay the import levy. Many of the goods affected were polished diamonds that had been cut and polished at overseas factories owned and operated by firms headquartered in Israel.
A statement released by the Israel Diamond Exchange noted that the “short inspection period prevented proper examination of the diamonds prior to purchasing or returning them, and limited the variety of goods imported.”
“The decision by the Diamond Controller is nothing less than revolutionary,” stated Yoram Dvash, president of the Israel Diamond Exchange. “It will make a dramatic contribution to Israel’s diamond industry, enabling us to better compete on the world stage. We will now gain access to a greater quantity of goods, from a greater variety of countries. The increased trade will grow our industry and raise it to new heights.”