Jewelers Vigilance Committee Shares Member Alert Regarding Additional Russian Diamond Sanctions Under Development

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It is incredibly important for U.S. businesses, if they have not already done so, to fully evaluate their supply chains now to ensure they understand where their products originate and how they may need to adjust sourcing to comply with the forthcoming regulations.

NEW YORK (PRWEB)
February 27, 2023

On February 24, 2023, the leaders of the G7 announced that they would be working on additional measures to address rough and polished diamonds of Russian Federation origin. This announcement was significantly timed in conjunction with the first anniversary of the illegal Russian invasion of Ukraine and subsequent unjustified war. The text of the announcement is here: https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/24/g7-leaders-statement-5/.

These forthcoming sanctions are likely to address the Court of Customs & Patent Appeals “substantial transformation” pathway, that still allows Russia-origin diamonds to enter the U.S., if cut and polished in another country. In United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940) it held that a product undergoes a “substantial transformation” if, as a result of further manufacturing or processing, the product loses its identity and is transformed into a new product having “a new name, character, and use.” The concept is important in administering trade and customs laws.

The text of the announcement reads: “given the significant revenues that Russia extracts from the export of diamonds, we will work collectively on further measures on Russian diamonds, including rough and polished ones, working closely to engage key partners.”

There is not yet specific guidance available for U.S. businesses to implement. However, the Jewelers Vigilance Committee (JVC) has received information that restrictions are likely to specifically target polished diamonds, regardless of where they are cut and polished. Any suppliers abroad who are still purchasing diamonds from Alrosa will likely need to begin segregating those goods to ensure they do not reach the U.S. market and should be prepared to make Customs declarations that their goods do not contain Russia origin products. Alrosa is a group of diamond mining companies, and a Russian state-owned enterprise (SOE).

“JVC expects that the process to create and implement regulations will take a few months, and looks forward to working with the U.S. Department of State and other U.S. government partners to ensure that the industry is fully informed of their responsibilities. In the meantime, JVC will continue to educate the trade on its role in ensuring that U.S. dollars do not go to fund the ongoing unjustified war in Ukraine,” says Tiffany Stevens, CEO & General Counsel Jewelers Vigilance Committee.

Until these sanctions are developed and implemented, U.S. businesses should be reviewing their sourcing protocols, discussing requirements with suppliers, and evaluating supply chains using due diligence guidance. JVC will continue to update with further developments, as it progresses.

“It is incredibly important for U.S. businesses, if they have not already done so, to fully evaluate their supply chains now to ensure they understand where their products originate and how they may need to adjust sourcing to comply with the forthcoming regulations. Utilizing your existing AML/KYC protocol as a framework is a great way to get started with this, and businesses are encouraged to reach out to JVC for additional guidance going forward,” says Sara Yood, Deputy General Counsel, Jewelers Vigilance Committee.

On Friday March 17th, 2023, JVC will be hosting its annual luncheon at the InterContinental Barclay, with State Ambassador James O’Brien as the Keynote Speaker. O’Brien has served as the Head of Office Sanctions Coordination since April 2022, and will be able to speak to those in attendance in-person about the ongoing Russian diamond sanction developments. For information regarding the luncheon, visit https://jvclegal.org/annual-luncheon-2023/.

To learn more about the Jeweler’s Vigilance Committee (JVC), visit https://jvclegal.org/ or call 212-997-2002. For inquiries regarding this press release, contact Pietra Communications at 212-913-9761 or email [email protected]

About the Jewelers Vigilance Committee

Jewelers Vigilance Committee (JVC) is the jewelry industry’s independent legal expert. For more than 100 years, member-supported JVC has helped jewelers build flourishing businesses that operate with the highest levels of integrity, legal, and regulatory compliance. JVC educates and trains jewelry industry members about their rights and responsibilities as business owners, employers, suppliers, designers, manufacturers, marketers, and sellers of jewelry. As the industry’s legal advocate, the Jewelers Vigilance Committee liaises with U.S. and international judicial and regulatory bodies on issues that impact livelihoods, acting as a mediator to settle jewelry-related disputes, without court intervention. JVC is the industry’s trusted resource, committed to safeguarding the reputation, integrity and vitality of the gem, jewelry, and watch trade. https://jvclegal.org/

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