Eurasian Economic Union (incl. Russia) Introduces Codes for Synthetic Diamonds

Compliance
26/02/2019 17:40

The Eurasian Economic Union (EEU) has introduced new national codes for rough (unworked) and cut (worked) synthetic diamonds and other synthetic gemstones based on the Harmonized System (HS) Code, the international nomenclature to classify traded products. The EEU’s decision to amend the Foreign Economic Activity Commodity Nomenclature will enable Russia - the world's largest diamond producing country - to track the flows of synthetic diamonds through its diamond pipeline.

Developments in the diamond industry in recent years are creating significant shifts with global ramifications on the identity and image of synthetic and mined stones. At the Kimberley Process 2017 Plenary in Brisbane, the Working Group of Diamond Experts introduced an initiative to formally introduce into the KP the World Customs Organization’s (WCO) Harmonised Commodity Description and Coding System (HS Code) tariff nomenclature, which includes 6-digit subheadings for synthetic diamonds (7104.20 for rough and 7104.90 for polished). It was agreed that all countries should take the necessary steps to enable the introduction of the HS Codes for synthetic diamonds applicable across all customs zones around the world by January 2022.

The EEU has now taken a significant step in preparation for the international application of this KP initiative, introducing subheadings at the 10-digit level that derive from the 6-digit HS Codes for loose worked and unworked synthetic diamonds. This temporary measure will be applicable at the national level in the EEU countries until it is internationalized in 2022. The major takeaway here is that Russia and the other EEU countries now have a method to supervise the flow of synthetic diamonds and other synthetic gemstones, including jade, rubies, sapphires, emeralds, alexandrite and others through their commodity trade systems.

This move adds Russia to the list of countries preparing for the transition to a globally implemented system to ensure the separation of natural and synthetic diamonds. China has already introduced its own national version of the HS Codes for synthetic rough and polished diamonds, while India created a national version of the HS Code for polished synthetic diamonds, but supervision of rough synthetics is still lacking. It is now up to the EU, the US and others to follow suit.

The EEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and the Russian Federation. It adopted the Decision to amend the EEU Foreign Economic Activity Commodity Nomenclature on January 29, 2019, and the new EEU Codes will enter into force as of April 30, 2019. HS Code 7104 is for “Synthetic or reconstructed precious or semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed precious or semi-precious stones, temporarily strung for convenience of transport.”

Image courtesy of GIA, synthetic diamonds grown by Jinan Zhongwu New Materials Company Ltd. of Shandong, China.