The Rapaport US Diamond Protocol (USDP) does not allow Russian Source Diamonds to be imported into the US. Russian Source diamonds are defined as diamonds sourced from Alrosa or any other sanctioned entity and then polished or “substantially transformed” outside of Russia by non-sanctioned entities.
The WDC G7 Diamond Protocol (WDC-DP) allows Russian Source diamond imports, thereby enabling the transfer of funds from US diamond companies to Indian or other diamond manufacturers and then on to Alrosa. The WDC-DP is in direct contradiction to the G7 Statement and purpose “to reduce the revenues that Russia extracts from the export of diamonds.”
The USDP requires full disclosure of the entities exporting and importing diamonds into the US. It enables the US government to maintain an approved list of such exporters and importers who may access the US market.
The WDC-DP does not require full disclosure of exporters to the US and does not give government control over who can export or import diamonds into the US.
The USDP requires the US Government to take full responsibility for all aspects of sanctions, including all regulations and enforcement provisions. Governments may request and require information from companies exporting or importing to the US. Governments are not required to trust any trade organizations, system of warranties, or trade auditing systems.
The WDC-DP is a trade-based system requiring extensive documentation, systems of warranty, and auditing of members by their own trade organizations. It seeks to replace the role and power of government with self-interested trade organizations. It requires governments and members of the US trade to trust the auditing and reporting systems of international trade organizations whose members trade in Russian diamonds. It requires extensive reporting and auditing that is beyond the capability of small and medium members of the US diamond and jewelry trade.
The USDP provides a detailed protocol for the implementation of blockchain technology that can be used to trace the movements of diamonds from source to import. It enables the government to select and monitor approved blockchains, identifies the information that should be kept in the blockchains, and provides for controlled access that maintains trade confidentiality. It enables governments to access the complete invoice trail, identifying all companies that have dealt with the diamonds being imported into the US.
The WDC-DP offers a hodge-podge of independent unrelated uncoordinated voluntary and non-voluntary systems that almost anyone can apply to attempt to trace diamonds.
The USDP does not require any additional documenting, tracking, tracing, statements on invoices or auditing once diamonds are in the US. There are no restrictions on the US diamond trade, this includes trading in recycled diamonds, vintage and preowned jewelry. It allows for the export and re-import of diamonds and diamond jewelry from the US.
The WDC-DP places extensive restrictions on the trading of diamonds and diamond jewelry within the US. These restrictions restrain the US diamond and jewelry trade in favor of larger companies and empower US trade organizations to take on the role of government regulators. There are no considerations for recycled diamonds or estate or vintage jewelry containing diamonds.
Please note this is only a partial list of differences. You are encouraged to review the Rapaport US Diamond Protocol as well as the WDC G7 Diamond Protocol for a more detailed comparison.
As always, your comments and suggestions are most welcome. Please email [email protected]