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EUROPEAN FEDERATION OF JEWELLERY

EFJ

To represent the Jewellery, Silverware, Watchmaking, Gemstone, Industry and Trade sectorat EU level.

Lobbying Activity

Response to Empowering the consumer for the green transition

27 May 2022

The European Federation of Jewellery (EFJ) welcomes the European Commission’s proposed Directive on Empowering consumers for the green transition through better protection against unfair practices and better information. The Federation fully supports the objective of the Commission to reinforce the protection of consumers against unfair and misleading commercial practices that prevent them from making sustainable consumption choices. The European jewellery sector applauds the proposed ban of generic environmental claims used in marketing towards consumers, where the excellent environmental performance of the product or trader cannot be demonstrated. Likewise, stricter requirements about the information to be provided to consumers when comparing two products on the basis of environmental or social aspects will be instrumental in informing consumers in a more accurate and objective manner. The EFJ hopes that all these measures will contribute to decreasing misleading commercial practices on synthetic diamonds. The Federation acknowledges the legitimacy of both natural and synthetic diamonds, but considers them to be different products. Even if they have the same physical and chemical characteristics, they are produced in a different way and they do not have the same value, both financially and symbolically. Synthetic diamonds are artificial replicas produced in an industrial and standardised way while natural diamonds are a unique creation of the Earth. With the two products having their place on the market, consumers have to be duly informed about what they buy in order to make informed choices and not to be victims of fraudulent practices. Generic environmental claims such as ecological or sustainable are increasingly used to designate and promote synthetic diamonds. In a recent report, French authorities qualified this practice as “fanciful”, “tendentious” and “misleading.” These claims, which are clearly greenwashing, mislead consumers by making them think that they buy a more environmentally friendly product with no justification of such claims. In reality, it is estimated that synthetic diamonds have a negative environmental impact that is 69% higher than natural diamonds on average mainly due to high emission and energy consumption levels. Furthermore, some sellers compare natural diamonds and synthetic diamonds on the basis of social aspects by claiming that synthetic diamonds are more ethical. This is another misleading and false advertising practice since the natural diamond sector plays a key economic and social role in providing livelihoods to around 10 million people mainly in Africa and in India. It should also be stressed that thanks to the Kimberley Process (KP), 99,8% of the global supply of rough diamonds are traded by KP participants, including the EU, ensuring that they do not contribute to the fuelling of armed conflicts. And last but not least, the 7 largest producers of natural diamonds provide a global net benefit of more than 16 billion USD, infusing more than 6.8 billion USD into local businesses in diamond mining communities and 292 million USD into infrastructure and social programmes in those same communities. Although the Federation considers that the proposed Directive is a step in the right direction, it is however insufficient to properly and effectively protect consumers. After the first recognition by the EU Commission of the issue of diamond terminology in the EU Guidance document of the Directive on Unfair commercial practices, released in December 2021, the EFJ is convinced that only the adoption of a European legal (or legally binding) definition of diamond inspired by the French and Belgian legislations designed to differentiate natural from synthetic diamonds by clearly disclosing their respective core characteristics and origin and by defining the terminology of each product, will allow to efficiently protect consumers.
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Response to Sustainable corporate governance

20 May 2022

The European Federation of Jewellery (EFJ) welcomes the European Commission’s proposal for a Directive on Corporate Sustainability Due Diligence. The European jewellery sector has been very proactive in ensuring responsible and sustainable mineral sourcing through the implementation of the EU legislation (EU Conflict Minerals Regulation & EU Council Regulation implementing the Kimberley Process Certification Scheme) and industry-driven certification schemes. It is however a sector mainly composed of SMEs, with limited human and financial resources, therefore the proportionate approach regarding SMEs in this new proposal is a step in the right direction. Nevertheless, given that SMEs, and including micro-enterprises, can be indirectly affected by the new rules as a result of the effect of large companies' actions across their value chains, effective supporting measures are needed, including dedicated websites, portals, platforms or trainings. Moreover, it is essential to avoid the passing on of the burden from those large companies to the smaller suppliers in the value chain. It is also important that all EU Member States financially support SMEs, and not only a few, to avoid unfair competition in the EU. In addition, given that the Responsible Jewellery Council’s (RJC) Code of Practices (CoP) and the World Diamond Council’s (WDC) renewed System of Warranties (SoW) are industry-driven certification schemes ensuring responsible and sustainable mineral sourcing, companies should be able to rely on such initiatives to support the implementation of their due diligence obligations. The Federation also concurs with the Commission’s proposal on the complementarity of the initiative, as it aims to be aligned and consistent with already existing EU initiatives, and in particular with the EU Conflict Minerals Regulation. This is essential to avoid any duplication and/or fragmentation of legal requirements, which would lead to an increased administrative and financial burden on EU companies, create confusion for companies or even produce incentives to companies to relocate their activities outside of the EU. Furthermore, we are satisfied with the fact that the proposed framework on due diligence is based on an obligation of means rather than an obligation of results. Having an exhaustive list of all the different legislations that companies have to consider in order to identify, bring to an end, prevent, mitigate and account for adverse human rights and environmental impacts in an Annex of the Directive provides for further legal certainty. In addition, the Federation would urge the Commission to come forward as soon as possible with contractual clause examples that will help companies comply with the Directive. However, the Federation regrets that the current proposal is focused on sanctioning companies at first stage in case of non-compliance with the EU Directive, instead of positively triggering and motivating companies to implement due diligence practices into their business structure. After all, we must avoid European companies de-risking and ceasing their activities in higher-risk countries for fear of prosecution. Finally, the EFJ fully agrees that third-country companies, which are not established in the EU but carry out activities on the European territory, are also covered by the Directive proposal. This will ensure a level playing field for EU companies at EU and international level and will support European competitiveness. However, the proposal of the Directive also leaves a great deal of leeway to the Member States to draft diverging national legislation, certainly with regard to sanctions policy, which in turn leads to a significant lack of a level playing field.
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Response to Revision of EU rules on Anti-Money Laundering (new instrument)

17 Nov 2021

The European Federation of Jewellery (EFJ) thanks the European Commission for the opportunity to provide inputs on the proposal for a regulation on “The prevention of the use of the financial system for the purposes of money laundering or terrorist financing.” The EFJ supports the introduction of a Union-wide limit for large cash payments of 10.000€ and welcomes the possibility left to Member States to adopt lower ceilings and stricter provisions. The European jewellery sector fully agrees that such a more harmonised approach will bring multiple benefits: more efficient fight against money laundering, better level playing field among operators and strengthening of the internal market etc. As rightly pointed out in the impact assessment, the jewellery sector is significantly economically impacted by the current situation where the ceilings largely differ from one country to another and with some Member States having no limit. For instance, the Belgian jewellery sector loses around 20-25% of revenues due to these disparities as some consumers prefer travelling to another country offering more cash payment facilities. This figure can go up to 30% in the areas close to the national borders and the ones which are located in touristic areas such as Brussels, Bruges, and Antwerp. Furthermore, the EFJ supports the figure of 10.000€ as ceiling. Given the current significant disparities between Member States, the sector considers that it is a proportional and reasonable figure, which takes into consideration the different necessities and sensibilities of EU citizens. The Federation is also in favour of Article 63 of the proposal laying down that, by three years from the date of application of the Regulation, the Commission will evaluate the need to further lower the limit. This flexibility will enable to assess the efficiency of the 10.000€ ceiling and to best adapt it if deemed necessary. Finally, the EFJ is convinced that a regulation will allow for a more coherent and harmonised implementation of the legal provisions, which will reinforce their efficiency. The Federation looks forward to keep contributing to the discussion on this important issue.
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Meeting with Geneviève Tuts (Cabinet of Commissioner Didier Reynders), Lucrezia Busa (Cabinet of Commissioner Didier Reynders)

27 Nov 2020 · Due diligence

Meeting with Isabelle Perignon (Cabinet of Commissioner Didier Reynders)

15 Apr 2020 · diamond terminology in EU law and consumer protection.