Diamond Overregulation and the Rough Market Divide

This blog first appeared in the March 2 Pressing Matters Executive Memo. Read the full memo here, Pressing Matters.

Last week's Diamond Debate examined the question if the diamond industry overregulated.

My opponent, Feriel Zerouki, president of the World Diamond Council, kicked off the conversation by listing a series of disclosure requirements involved in diamond trading. It’s worth considering these details as you reflect on the topic.

 This blog first appeared in the March 2 Pressing Matters Executive Memo. Read the full memo here, Pressing Matters.

For a small parcel of natural diamonds, you'll need a Kimberley Process certificate, G7 sanctions declarations on Russian goods, customs documentation, anti-money laundering checks, and more. Then, there's the Responsible Jewelry Council (RJC) certification or De Beers' Best Practice Principles report, World Diamond Council system of warranty declarations for each invoice, and additional due diligence and beneficial ownership disclosures. Retailers may require traceability too.

On top of that, the financial sector demands bank compliance, source-of-fund checks, and insurance verifications.

In short, for a parcel of diamonds worth only a few thousand dollars, you’ll need more paperwork than for a shipment of technology worth millions, Feriel pointed out.

While we mostly agreed during the debate, it was insightful to dig into the intricacies of industry requirements. What do you think? Is the diamond industry overburdened with disclosures? If so, what’s driving that?

Watch the full debate here: Is the Diamond Industry Overregulated?

This blog first appeared in the March 2 Pressing Matters Executive Memo. Read the full memo here, Pressing Matters.