The official documents of the Assay Chamber say that in Russia the state-controlled hallmarking of jewellery articles was enacted in 1613 for silver items, in 1700 for gold items, while in the USSR in 1927 this was done for platinum items and in 1956 for palladium items. The hallmarking history is laid out in details on the site of the Assay Chamber. It is easy to notice that our history is very much different from others. While the Western countries demonstrate an evident trend to do the hallmarking control more simple and liberal moving to full elimination of government control, in the Russian Empire and later in the USSR and the Russian Federation there is going a reverse process enhancing and complicating the state control over hallmarking of jewellery articles made of precious metals.
However, it should be noted that the G-7 countries are following their own, original ways in the field of assay supervision. They not only failed to accede to the International Convention on Hallmarking, but also brought the negotiations on harmonization of assay systems (going on from 1993) to a dead lock even within the frames of the European Union. The United Kingdom is an absolute adherent of a government-controlled assay system. Germany happens to be its ardent opponent.
In August 2000, Dr. Alfred Schneider, General Executive Manager of the Federation of German Jewellery, Watches, Clocks, Silverware and Related Industries, published an official document arguing against government control. He says there that:
1. Harmonization of hallmarking systems will harm fair competition.
2. Harmonization must promote free traffic of goods and remove the obstacles to trade associated with compulsory hallmarking.
3. Foreign competitors can supply to Germany without observing the comprehensive hallmarking, while it is forbidden for German suppliers, for example, to Britain.
4. In countries with compulsory hallmarking local producers are given preferential treatment in clearance, while imported goods are normally left waiting longer; this treatment represents a distortion of competition on the territory of the European Union.
5. For fear of sanctions from state authorities, German suppliers are frequently “giving in”.
6. State assaying and hallmarking requires additional time, which runs counter to the world trade trend of shortening delivery times to exact places on exact dates.
7. Every inspection by the hallmarking offices causes damage to the goods, as there is never a damage-free inspection of the goods, especially of the composite goods; restoration of commercial appearance of assayed goods leads to an increase in the time and cost involved and customer annoyance.
8. The increased attention to precious metals is unjustified for goods with diamonds and other gems since precious metals value is of secondary importance with regard to the final price.
9. In sales over the internet (mail order business), the test mark of the testing office is of no importance, since the customer purchases the product of the manufacturer.
10. In some countries, the abolition of the testing offices is an employment problem, in other countries a problem of financial policy. In both cases, testing makes the goods more expensive.
11. Experience has shown that the controls of the hallmarking offices do not offer any greater guarantee for the consumer than the responsibility mark administered by manufacturers; in particular, the hallmarking offices do not assume any independent liability, this falls exclusively to the manufacturer.
12. The unavoidable increase in the sale price bears no relation to the aim of an additional state ordained assurance regarding indication of fineness. Legislation – such as Fineness Law, Law against unfair competition and others – is more effective, better value for the consumer and just as sound.
13. The hallmarking provisions of the individual countries are already so diverse (for instance in some countries gold with steel is permitted, and not in others), that a harmonized European regulation is urgently required.
14. Exaggerated obligations of proof and cost intensive certification proceedings are also to be avoided in the interest of small and medium-sized businesses.
The German authorities and jewellery community have come to a resolute conclusion that manufacturers’ responsibility is the main thing. There is no need in additional state control in this field.
The authorities and jewellery community of Italy, the largest jewellery manufacturer in G-7, have arrived at a similar decision: the manufacturer is legally responsible for the quality of jewelry alloys, while the state in the role of a guardian should only register manufacturers and make manufacturer hallmarks at the Mint.
This discussion reveals the weakness of argumentation set forth by the adherents of state control over hallmarking. The British experts recognize that hallmarking revenues remain at the disposal of Assay Offices. This amounts to no less than about $15-17 million a year. Here we witness a narrow corporate approach, which has not so far come under examination of the European Commission.
In any case, the rift in Europe is of huge importance for the hallmarking outlook.
What about Russia?
In the ongoing discussions of jewelry hallmarking (see, for instance, “International hallmarking – pipedream or possibility?”, a fundamental article by Roy Rushforth, World Gold Council, Gold Technology Nr. 27/1999) the Russian experience was not even mentioned. Indeed, why should it be mentioned at all if it is to the advantage of all competitors from G-7?
In the field of hallmarking Russia professes and applies self-isolation. If the Russian Federation would conscientiously have chosen the path of state regulation in hallmarking, it would be worth to joint the International Convention as soon as possible. It does not matter that it unites 10 European countries; this would open market channels for products with conventional hallmarks (for instance, it would be possible to use Finland and Poland as gates to the European Union) and give a possibility to get hallmarking orders at European prices (about $0.5 per article). In this case, the European “statists” would have to make some room for Russia.
If Russia had chosen a liberal path, it would long have been possible to adapt the Italian or German experience (it is unlikely that our post-communist mentality will give us a chance to come somewhere near the U.S.A. practice with any alloys from 10 K. to 24 K. and even without physical hallmarking). Italy is particularly attractive in this sense being a country with similar mentality (including halting punctuality, emotionalism and office extravaganza). It makes one wonder that Russia, having its centuries-old traditions in metalworking and unique processing techniques for various alloys employed at its military mills, is one thousand times weaker than Italy in the field of jewelry with its rather costly workforce. If Russia had chosen the liberal path in hallmarking, many and many manufacturers, even from the countries of cheap labour (like India, China, Thailand, etc.), would have to make room for it in the world jewelry market. However, Russia is in no hurry.
Conclusions
Proceeding from the above said, it is possible to make the following conclusions:
1. The most complicated and expensive hallmarking system in the world practice emerged in the 18th century in France, the most economically advanced country at that time. The system reflected two things: 1) superstitions related to gold and silver fed by fears of their alchemic production; 2) French leadership in the world of fashion due to which all the hallmarking expenses were imposed on the European elite, including the Russian elite too.
2. At present time, every country of G-7 is following its own special hallmarking system.
3. Today the most stringent hallmarking system in force is in the United Kingdom under the liabilities and guarantees of the government. However, “all the vapor there goes into the whistle” – 90% of circulating products are made of low-grade 375 gold.
4. Italy, the leading manufacturer and exporter of jewelry products, has probably the most progressive legislation. In essence, it says that jewelry assaying and hallmarking is totally the business of manufacturers registered at the Chamber of Commerce and bearing manufacturer hallmarks made at the Mint.
5. The attempts to establish a harmonized hallmarking system have not succeeded neither under the auspices of the United Nations, nor within the frames of the International Convention or the European Union. The European debates served only to polarize and split wider apart the adherents of state-controlled hallmarking system and those of commercial system.
6. Regretfully, Russia does not employ the advantages of neither system. The lost profit is actually incurred by Russian manufacturers and jewelry merchants.
7. The state hallmarking system in the Russian Federation appears a morally outdated affair sustained by obscure functionaries and financially committed assay masters.
8. The modern methods of non-destructive testing, as for instance the gold testers and X-ray fluorescent analysis, permit both the manufacturers and consumers to check the quality of jewelry alloys individually.
9. The state hallmarking system in Russia appears particularly absurd on the background of complete state self-relief of control over such vital products as medicines and vodka, where violations take away hundreds of lives every year.
10. It is also worth to contemplate the following question: Does the state violate the rights of consumers imposing an additional service – assaying and hallmarking at the state assay offices?
