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Yesterday, US State Department officials sent a direct message to industry groups and companies at a meeting in New York: jewelry companies must know and declare where all their materials come from or they will be subject to to new regulations.
“[The government] wants to know where every part of a piece comes from,” said one participant, who spoke on condition of anonymity. “Not just the diamond or the gem, but the gold, everything.”
The United States believes that jewelry materials and other minerals fund divisive and rogue regimes, specifically mentioning Iran, Venezuela and some countries in Africa, participants said. But he is also interested in more than these areas.
“It’s a sweeping blow across the entire industry,” the participant said. “It’s about knowing the source of any imported piece of material.”
State Department officials have expressed frustration with the slow pace of change in the industry in previous meetings. But it looked a little different, those present said.
There were threats of new regulations on the industry, although attendees were given few details. Some have speculated that it could be a new law or an executive order.
“Something is brewing,” said another participant. “It seemed pretty serious. I will not tell [the meeting] was too threatening, but it was serious. It was an alert. »
The first source said: “It was made clear that this was coming from the top, that President Trump and the Secretary of State [Michael] Pompeo is focused on that.
Industry officials have long maintained that it is difficult to determine the exact provenance of each part of a piece of jewelry, since many materials are recycled, reused and traded in the secondary market. The discussion focused on existing mechanisms to ensure provenance, such as the Responsible Jewelery Council Chain of custody certification.
Yet participants felt that these warnings had been received less receptively than in the past. The government appears frustrated that existing regulations are not being followed, they said.
“Money laundering was specifically mentioned as an issue,” said a third participant. “[Law enforcement isn’t] see many suspicious activity reports filed.
As the State Department looks to sectors other than the jewelry industry, it considers this activity a top priority, participants say.
The meeting ended with six takeaways:
– The “threat rating” is higher than it has been in the past.
– The Kimberley Process is insufficient to solve the current problems.
– Ensuring chain of custody for all materials is important to the US government.
– The government plans to hold US suppliers and buyers accountable.
– More industry education is needed on these issues.
– The government is seeking to strengthen enforcement of existing rules and regulations, specifically mentioning those relating to anti-money laundering.
Although the discussion was ostensibly about transparency, it was conducted under the Chatham House rule, which allows participants to discuss the direction of the conversation, but not the people who have it.
A US State Department official declined to comment on the case.
Yesterday’s meeting looks like a U-turn by the Trump administration, which has previously said it won’t enforce the only regulation that has seemingly increased transparency in gold sourcing: the article 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
For advice on developing an anti-money laundering program, a requirement for many jewelry businesses, consult the Jewelers Vigilance Committee. site.
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