Understanding the EGL Controversy
National Jeweler reported on 12/16/14 that class-action lawsuits will be filed against EGL International and some prominent, large-scale retailers early next year. The accusation will be that EGL International systematically over-graded diamonds, and then retailers, with full knowledge of this practice, sold the diamonds to the end consumer.
Since the controversy, the question has been raised, “Is there a definitive grading standard in the diamond industry, and is it ethically necessary for professionals who sell to abide closely to this standard?” The answer from the public and lawmakers has been a resounding, “Yes!”
For diamond experts in the trade, Gemological Institute of America (GIA) has always been the industry standard. All experts in the trade buy according to strict GIA standards. However, when it comes time to sell, the diamond seems always to improve. Diamonds below I color, SI2 by GIA standards tend to be sent to other labs for more generous grading. EGL-USA and International Gemological Institute (IGI) are generally found to grade one to two grades lower on color and a half grade lower on clarity than GIA. When it comes to SI clarities, they can be even more liberal. EGL International labs can be four to five grades or more off from GIA standards.
The industry is moving toward increased transparency which should be invited. This will affect every professional involved in the buying and selling of diamonds. We must be vigilant to recognize the true industry standard of GIA, learn to grade by that standard, and disclose this quality of grading to whomever we are selling to, regardless of the accompanying report.
We’ve learned that customers do not want “I SI2” or better because they are experienced professionals who have done extensive lab research. Rather, the consumer wants a beautiful diamond, and color/clarity/cut grades have taught them a sort of quantification.
We need to further educate the public regarding what makes a diamond beautiful. A nice I1 can be more desirable than an SI2, and a J color better than an H if the material of the stone is crisp and ultra transparent facing up white, and with superior brilliance. Beauty and value are not directly correlated to higher color and higher clarity necessarily. There are too many value factors to enumerate. It’s an art and a science to convey them responsibly and accurately to the buying public.
Eric, Lisa, and Alon Mor are the owners of Abe Mor Diamond Cutters & Co, a New York based, 50-year-old diamond cutter and wholesaler started by their father, Abe. With over 35 years in the diamond industry, Eric’s specific expertise is in diamond grading and evaluation. For more information, visit AbeMor.com or send an email to [email protected].