GIA Ethical Sourcing & Chain of Custody 3 — Questions and Answers
Question 1: The Dodd-Frank Act Section 1502 in the United States primarily targets conflict minerals from the Democratic Republic of Congo. How does this legislation indirectly affect diamond industry practices?
- It directly mandates KP certification for all diamonds sold in the US
- It established supply chain transparency norms that influenced voluntary diamond industry due diligence standards (Correct answer)
- It requires GIA to report all diamond origins to the SEC
- It bans all mineral imports from central Africa
Correct answer: It established supply chain transparency norms that influenced voluntary diamond industry due diligence standards
While Dodd-Frank Section 1502 targets 3TG minerals, its supply chain transparency framework set a precedent that shaped voluntary due diligence norms adopted by the diamond industry.
Question 2: A gemologist is asked to appraise a parcel of rough diamonds for a client who cannot produce any documentation of origin. What is the MOST ethical course of action?
- Appraise the diamonds based purely on their physical characteristics
- Decline to provide a valuation until origin documentation is supplied (Correct answer)
- Provide a written appraisal with a disclaimer noting absent documentation
- Report the client to local law enforcement immediately
Correct answer: Decline to provide a valuation until origin documentation is supplied
Ethical professional practice requires declining to facilitate transactions involving undocumented rough diamonds, as this could support conflict diamond laundering.
Question 3: In the context of ethical sourcing, what does the term 'artisanal and small-scale mining' (ASM) refer to?
- Large-scale corporate mining operations that use artisan craftsmen for ore extraction
- Informal or small-scale mining by individuals or small groups, often without formal legal status (Correct answer)
- Mining operations certified by regional artisan guilds
- GIA-approved gemstone extraction programs in developing nations
Correct answer: Informal or small-scale mining by individuals or small groups, often without formal legal status
ASM refers to informal mining conducted by individuals or small groups, often in developing countries, typically without formal registration or regulated safety and environmental standards.
Question 4: The De Beers Tracr platform uses which technology to record the chain of custody for individual diamonds?
- RFID microchip embedding
- Blockchain distributed ledger technology (Correct answer)
- QR code label tracking
- Laser holographic fingerprinting
Correct answer: Blockchain distributed ledger technology
De Beers' Tracr platform uses blockchain technology to create an immutable distributed record of a diamond's journey from mine to retail.
Question 5: Under the Kimberley Process, which of the following is NOT a requirement for a compliant rough diamond shipment?
- The shipment must be sealed in a tamper-resistant container
- The KP certificate must include the country of origin and the Harmonized System (HS) code
- Each individual diamond must have a laser inscription matching the certificate (Correct answer)
- The certificate must be issued by the exporting country's KP authority
Correct answer: Each individual diamond must have a laser inscription matching the certificate
The KP does not require individual laser inscriptions on rough diamonds; its requirements focus on packaging, certification, and documentation at the shipment level.
Question 6: When a US jewelry retailer sources colored gemstones alongside diamonds, which additional ethical concern arises that is less formalized than the Kimberley Process?
- Colored gemstones require GIA grading reports for sale in the US
- Colored gemstone supply chains lack an equivalent international certification scheme, making due diligence more complex (Correct answer)
- Colored gemstones are exempt from import duties and require no documentation
- The FTC mandates colored gemstone origin disclosure just as it does for diamonds
Correct answer: Colored gemstone supply chains lack an equivalent international certification scheme, making due diligence more complex
Unlike diamonds covered by the Kimberley Process, colored gemstones have no equivalent international certification scheme, making supply chain due diligence more challenging and reliant on voluntary standards.
Question 7: Which organization developed the 'Diamond Best Practice Principles' (BPP) that diamond manufacturers and traders must comply with to purchase rough diamonds from De Beers?
- The Responsible Jewellery Council
- The World Diamond Council
- De Beers Group (Correct answer)
- The Kimberley Process Secretariat
Correct answer: De Beers Group
De Beers developed its own Diamond Best Practice Principles, which all Sightholders and other trading partners must comply with as a condition of purchasing De Beers rough diamonds.
GIA Ethical Sourcing & Chain of Custody 3
The Dodd-Frank Act Section 1502 in the United States primarily targets conflict minerals from the Democratic Republic of Congo.
How does this legislation indirectly affect diamond industry practices?