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Control is Required аt Each Stage of Jewellery Production – from Mining to Refining and Retailing

08 april 2014

At the end of March, the Russian Jewellers Guild held a press conference in its Ceremony Hall dedicated to its standpoint on the draft federal law “On Amendments to the Legislative Acts of the Russian Federation” prepared by Russia’s Ministry of Finance.

Gagik Gevorkyan, Chairman of the Russian Jewelers Guild, and Valery Radashevich, Deputy Director General of the Russian Jewelers Guild took part in the press conference.

The pressing issues of the legislative and regulatory framework were discussed that regulate the market of precious metals and gems in Russia. The problem is that at present, the owners’ rights are prejudiced, the production cost of the products manufactured increases, the efficient control over the jewellery retailing is lacking, especially over the jewellery set with gems.

Given that the legislative and regulatory framework needs to be improved, the Ministry of Finance of Russia worked out a draft federal law “On the Introduction of Changes to Some of the Legislative Acts of the Russian Federation“ offered for consideration on March 3, 2014 at the session of the Russian Government Commission for the Legislative Drafting Activities and at the extended session of the Ministry of Finance of the RF on March 21, 2014.

The draft law includes the following fundamental provisions:

- Renewal of the state control in the turnover of precious metals and gems.

- Establishing the basic concepts of the precious metals and gems industry that were not formulated earlier in the effective legislation but used in the acts of the RF government and departmental regulatory and legal enactments.

- Maintaining the state monopoly for assaying and hallmarking the precious metals jewellery using the state hallmark.

- Establishing the powers and authorities of the state institution performing the assaying and hallmarking of the precious metals jewellery.

The standpoint of the Russian Jewellers Guild on the draft law was expressed by Mr. Gevorkyan with consideration of the principles stated and the jewellery market state-of-the-art: 

1. No doubt, the state supervision is required but it is necessary to specify what, where and how the control should be implemented. It is necessary to set a system of control over the retail, establish strict responsibility for illegal trade and selling defective products and deception of customers. More strict rules for the retail stores registration should be introduced.

2. The Russian Jewellers Guild considers it necessary to introduce respective amendments to the articles of the law on the state control.

3. The Russian Jewellers Guild speaks in support of maintaining the state monopoly for assaying and hallmarking the jewellery. 

In his speech, Mr. Gevorkyan commented on the negative developments on the jewellery market like increased smuggling. It is difficult for companies operating within the law to work side by side with the businesses for which there are no rules or restrictions - the state supervision is a must in the country where smuggling has reached up to 50 percent over the last decade. Most often, the manufacturers know better the ways to achieve this than the state officials. He pointed out the propitious moment and favourable situation: the business and the state set the same goal - put the market in order. Mr. Gevorkyan emphasized that the control is required at each stage of the jewellery production - from mining to refining and retailing.

Mr. Radashevich stressed the importance of understanding that gold was and will be a financial instrument, and the state will always have special attitude towards it. Besides, the success of the jewellery business is based on the confidence a buyer has to a seller and the jewellery. In the Soviet era, it was honed meticulously. Nowadays, when there are imported materials, including unaccounted and illegal ones, and the jewellery is manufactured by fly-by-night companies, the main task is to establish a system for putting things right in the trade. There exist many questions about the ways leading to the civilized market so that both the manufacturers and the consumers could be satisfied. The supervision over the stores should be concrete: one import ‘window’ is required, hallmarking by the Assay Chamber, introduction of an importer's stamp, regulation of the characteristics requirements specified for studs and gems.

Representatives of the professional media took part in the discussion of these provisions, including Yuvelirnoye Obozrenie (Jewellery Review), Navigator Yuvelirnoy Torgovly (Jewellery Trade Navigator), Rough&Polished and others. Some provisions required itemization introduced by Mr. Radashevich.

The Russian Jewellers Guild believes that the industry standpoint may be taken into account by the federal authorities only if it reflects the common position of all the industry businesses and does not contradict to the main principles of the state policy towards the industry.

The discussion of amendments and changes to the legislation elaborated by the Ministry of Finance of the RF is in progress and should become a useful and efficient tool for the industry improvement in the interests of all its players. 

According to the speakers, it was agreed at the meeting at the RF Ministry of Finance to set up a working group under this ministry with the participation of the representatives of the Russian Jewellers Guild, Assay Chamber of Russia and public organizations, including Delovaya Rossiya (Business Russia), Russian Union of Industrialists and Entrepreneurs (RUIE) and others.

“The jewellery business and the state set common targets” stressed Gagik Gevorkyan. “We approach the state to protect us from smuggling and we want to take an active part in the development of uniform measures for the state control over the jewellery industry. It is we, the jewelers, who have the inside knowledge of the industry and are eager to help the representatives of the power authorities in the elaboration of the efficient solutions. In particular, it is necessary to clearly determine what and how to control.” The Chairman of the Russian Jewellers Guild is of an opinion that weaker state control would inevitably result in chaos and allow, in particular, the foreign companies continue conquering the Russian market against the interests of the national manufacturers who would lose a chance of a fair competition.

Without any reservations, the Russian Jewellers Guild supports the state monopoly for hallmarking the jewellery and takes a clear and firm stand on this issue rejecting even the thought of setting up any alternative assay offices. Such a monopoly is the pledge of the customers’ confidence in the domestic jewellery goods.

The journalists representing Otkrytyi Klub (Open Club), Russian Jewellers Guild, Blestyashchiye Novosti (Sparkling News), Torgovyi Klub (Trade Club) and others also took part in the press conference, as well as the representatives of the Assay Chamber of Russia.

Galinа Sеmyonovа, Rough&Polished, Моscow