Last week, the second annual edition of the Russian Jewellery Market Conference was held in the Congress Centre of the Chamber of Commerce and Industry of Russia (CCI) in Ilyinka Street. The event was sponsored by the Russian Jewelers Guild and Chamber of Commerce and Industry of the Russian Federation.
The prospective lines of the development of the national jewellery market, including the development through more fruitful interaction of the business community and governmental authorities were highlighted at the conference. Also, the development of the state and commercial programmes for supporting and developing the jewellery industry and jewellery companies was discussed.
Andrei Yurin, the head of the State Precious Metals and Gems Repository (Gokhran), Igor Tikhov, chairman of the Committee of the Chamber of Commerce and Industry of the RF for the support of the entrepreneurship in the sphere of mining, production, processing and trade of precious metals and precious stones and jewellery made of them, Sergei Alkhazov, president of ZAO Tsentr Yuvelir, Alexandr Akhpolov, director of the administrative department of the Russian Ministry of Finance, Dmitry Zamyshlyayev, deputy chief of the State Assay Chamber, Vladimir Zboikov, adviser to Almaz Holding president, Sergei Travkin, chief expert at the Chamber of Commerce and Industry, Olga Sholomitskaya, acting head of department at the Federal Service on Financial Monitoring and others took part in the sessions.
Igor Tikhov, chairman of the Committee of the Chamber of Commerce and Industry of the RF for the support of the entrepreneurship in the sphere of mining, production, processing and trade of precious metals and precious stones and jewellery made of them, opened the conference and was its moderator at the sessions.
The topic for discussions at the first round table was the state-of-art and development of the Russian jewellery market. The following topics were discussed: Russian jewellery trade and actions against money laundering, Law on the precious metals and precious stones at the current stage as the jewellery industry development instrument or deterrent, The role of the state in the entry of the Russian jewellers into the world market, The problems in the circulation of gem studs in the jewellery items, The jewellery as a national product.
First of all, the industry’s most vital issue was addressed – the legislative one. Vladimir Zboikov made his presentation on ‘Updating of the industry legislation in the sphere of precious metals and precious stones – the search of the trend’, where he retraced all the changes in the Federal Law ‘On the precious metals and precious stones’.
The main stumbling blocks for the development of the Russian jewellery industry are as follows:
- High level of smuggled and faked goods in the jewellery trade
- Non-conformity of the industry’s regulatory and legislative basis in Russia to the legislative conditions in the countries, whose jewellery products have competitive advantages
- Excessive legislative requirements regarding the state regulation, for example, the special security regime during transportation (forwarding) of any jewellery products and the rough materials for them
- Criminal responsibility (article 191, the Criminal Code of the RF) for a wide and often ambiguous infringements of law in the mining, treatment, storage and turnover of precious metals and precious stones
- Imperfection of the assay supervision and the resulting problems with the additional expenses incurred by jewellery manufacturers
- Imposition of VAT on gold and diamonds
- Levying of import duties on jewellery stones – rough and polished (jewellery studs)
- Levying of import duties on the machinery for jewellery manufacturing and cutting and polishing, including the equipment that is not made in Russia
The lack of a level playing field for the jewellery business in Russia was mentioned as compared to the conditions in other countries where this sector is developing, as well as the lack of a state support for the industry in Russia, including that at the international level. It is necessary to solve the above problems through combined efforts of the industry business community with the involvement of the state authorities and introduction of amendments to the Federal Law, the active work on which is going lately. Mr. Zboikov spoke about the ‘presumption of guilt’ existing in the jewellery production, about the challenges facing the Working Group in the elaboration of amendments to the Federal Law, but also mentioned about the ‘moderate positive character of the amendments approved’.
Dmitry Zamyshlyayev made his presentation on ‘The main trends in the development of the Russian market of precious metals and precious stones at the current stage’.
Sergei Alkhazov, president of the Tsentr Yuvelir, spoke about the today’s pressing issues existing on the jewellery market. Being one of the top executives at the jewellery company, he touched the acute problems and also shared his experience gained when he was involved in lawmaking.
Olga Sholomitskaya outlined the problems facing the Federal Customs Service: strengthening of customs control is a global trend, FCS seeks to decrease the burden on the business, but still, the latter should not turn into the money laundering system: “We are working out our own law on the state control, including the law on preventing money laundering and counter-terrorism.”
Presentations made by D. Zamyshlyayev and O. Sholomitskaya attracted energetic response among the jewellery manufacturers, expressed by Mr. Alkhazov, who noted that in the play of concepts the notion of control is substituted and ‘reaches the opposite goal - the way how it is today’, and creates the uneven playing fields. China and India were taken as examples, where in 1991, the control functions were abolished and these countries pressed the US market hard and soon may come to Russia – are coming already. According to Alkhazov, it is necessary to control the mining and banking sectors, but the way the control is being done (for example, submission of a passport while purchasing a jewellery item) creates the shadow resources, and the honest manufacturers have left or are going to leave.
Andrey Yurin as a representative of state authorities expressed the full commitment of the Gokhran to promote and support the jewellery business in Russia: the works of the Sazikov Jewellery House are open fr om the special storage collections, the Sazikov jewellery pieces had been recognized long before the Faberge ones (which was confirmed by the Grand Prize in London in 1851 and the Legion of Honour awarded to him); the contest for the best jewellery piece was renewed (the works of Ilgiz Fazulzyanov, the winner of the recent contest are displayed at the Diamond Treasury), the cooperation in the field of legislation – a number of steps has already been taken (refusal to hallmark items under 3 grammes, the changes in the transportation requirements for retail, the permission for recycling the scrap of own production without refining, etc.); this work resulted in 50 pages of amendments that have already been studied and will be submitted to the State Duma for their consideration).
However, for the state to implement these proposals, emphasizes Mr. Yurin, it is necessary that all the tasks are formulated and translated into the formative act language and this requires the combined efforts of all the industry representatives. The second reading of the Law took place two days after the conference and it is hoped that the possibility of the introduction of the required amendments was not missed.
The round table ‘Jewellery Retail’ highlighted the following topics: the development of chains, the work in the regions, franchise as the development instrument, assortment matrix, discount centres – practice of work with the shelf stocks; know-how to attract customers, the practice of higher average bill, effective marketing instruments, know-how of practical use, branding, work with collectibles, competitive battles, the development of the secondary jewellery market, the Crimea as the development area.
A special session focused on the co-operation between the jewellery business and banking community, current programmes to support small- and medium-scale businesses, the secrets of the successful co-operation with the lending institutions. Over fifty representatives of the state sector and heads of industry associations discussed various programmes aimed at supporting the Russian jewellery industry. The participants had a chance to know about the state and bank support programmes for small- and medium-scale businesses, investment programmes and co-branding projects.
Also, the round table ‘Security of the jewellery business’ was held by the co-organiser FKD-Consult, wh ere the issues of physical and economic security were touched upon, as well as insurance in the jewellery business and tax optimization.
Within the framework of the conference, the presentations of the jewellery collections designed by Pyotr Aksyonov and the ‘Russian jewellery week’ Project were made.
Galina Semyonova, Rough&Polished
