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DEFINING THE DIAMOND

NEW FTC GUIDELINES MUDDY THE WATERS OVER SYNTHETIC DIAMOND DEFINITION

 

After a long process of deliberation, the United States’ Federal Trade Commission (FTC) released its final revision to its Guides for the Jewelry, Precious Metals, and Pewter Industries, intended to outline the standards required for ensuring a fair trade in the world’s most valuable national market. But, instead of clarifying all issues, the FTC confused one rule that appeared to have already been settled internationally, and that relates directly to what legitimately can be referred to as “a diamond.”

According to an FTC statement, “When the commission first used this definition in 1956, there was only one type of diamond product on the market — natural stones mined from the earth. Since then, technological advances have made it possible to create diamonds in a laboratory. These stones have essentially the same optical, physical and chemical properties as mined diamonds. Thus, they are diamonds.”

The problem is that the new finding does not quite conform with the International Standard Organization’s ISO 18323, which was ratified in 2015, and is the standard most recognized around the world. It expressly states that a diamond is “created by nature,” and defines a synthetic or laboratory-created diamond as “an artificial product that has essentially the same chemical composition, crystal structure and physical (including optical) properties as a diamond.”

FTC GUIDLEINES VERSUS THE INTERNATIONAL STANDARD ORGANIZATION

When the ISO standard was created, the responsible committee did consider the same facts that were presented to the FTC, whose stated goals is to advise marketers how to make claims about jewelry products that are not deceptive to consumers.

In its preamble to the 18323 standard, the ISO committee had explained that “a major concern held by the diamond industry is that without clear and accurate labelling, the increased availability of synthetic diamonds to consumers can cause confusion over exactly what type of product is being sold to them. While the provenance and labelling of a diamond is widely understood, the consumer will be less familiar with the variety of terms that have been used by sellers to describe synthetic diamonds.”

The headquarters of the Federal Trade Commission in Washington, D.C..

“The diamond industry is concerned that a consumer can inadvertently buy a synthetic diamond or other product believing it to be a diamond and similarly, the synthetic-diamond industry does not want its products to be seen as a cheap alternative to a diamond or as a product that consumers will only buy if they are not fully aware of its provenance,” the ISO document had continued. “Considering that synthetic diamonds are nowadays set in jewelry pieces it is therefore in the interests of both sectors of the market that consumers are able to make informed purchasing decisions.”

The FTC purportedly had the same intention, but whereas the 2015 ISO document expressly stated that “the denomination ‘diamond’ without further specification always implies ‘natural diamond,’ the FTC document merely suggests this. At the same time it expressly removes the word “natural” from the diamond definition, at the request of The Diamond Foundry, a California-based producer of laboratory-grown diamonds.

The FTC also recommends that the tern “synthetic” no longer be used to describe laboratory-created diamonds, agreeing with laboratory-created diamond producers that consumers tend to equate synthetic with fake. It should be noted that the Webster dictionary definition of “synthetic” is something “relating to, or produced by chemical or biochemical synthesis,” which would seem to be the case with laboratory-created diamonds.

 

BUT NOT EVERYTHING IS ALLOWED, SAYS FTC

To be fair, while generally showing itself to be sympathetic to the claims of laboratory-created diamond producers, the FTC did not open the door to all claims. While it does not limit, as does ISO, marketers to only using terms like “laboratory-grown,” “laboratory-created,” “[manufacturer name]- created” or “synthetic” (which, as stated, is recommends against using), it still requires that they clearly and conspicuously convey that the product is not a mined stone. Such descriptors or qualifications must be clear, prominent and understandable.

The previous version of the FTC Guides did not specifically address use of the term “cultured” to describe laboratory-grown diamonds or other gemstones, and consequently the adjective was used quite liberally by the new producers of man-made stones. The revised guides advise against using the term “cultured” to describe a laboratory-grown stone without additional descriptive or qualifying language.

The previous guides had disallowed use of the terms “real,” “genuine,” “natural,” “precious,” “semi-precious” and similar terms to describe a manufactured or artificially-produced product. The revised FTC Guides retains this regulation, thereby disallowing such terms to be used for laboratory-grown diamonds or any other industry product that is manufactured or produced artificially.