Hong Kong’s diamond-promotion body plans to start checking wholesalers’ inventory for synthetic diamonds, as part of a program aimed at boosting consumer confidence and giving retailers better peace of mind.

The Diamond Federation of Hong Kong, China (DFHK) has been scrutinizing retailers’ inventories through the Natural Diamond Quality Assurance (NDQA) Mark since early 2015. Jewelers who sign up for the scheme are subject to laboratory tests of a random sample of their diamond jewelry, both when they join and during the annual renewal process. In return, they can display the program’s quality symbol in their stores.

But until now, the scheme has not covered the wholesale sector, which makes up the majority of the DFHK’s membership. This is the next step for the NDQA Mark and will help diamond traders become the guardians of quality in the industry, asserted Chow Kit Shing, vice chairman for retail at the DFHK.

“Retailers and wholesalers are dependent on each other,” Chow (pictured, right) said in a DFHK report on the program’s progress. “Consumers will acquire more diamond jewelry when they have confidence in the gems. Retailers will then stock up on diamonds from wholesalers in order to meet [their] growing needs.”

As such, he continued, “when suppliers manage to perform the gatekeeping duty of quality control, it helps downstream retailers maintain product quality effectively.”

The expansion of the scheme to wholesale is currently at a preliminary planning stage. As a result, the timeline for opening it up to dealers is still unclear, as is the number of companies expected to participate.

“How wholesale stock audits will work is one of the main technical issues that we have to tackle before expanding the scheme to the wholesale section,” Chow added in an interview with Rapaport News. “The DFHK will endeavor to solve all the issues without compromising on the principles of integrity.”

Under the current NDQA Mark program — which has been preceded by similar schemes for the gold and jadeite trades — inspectors take a random sample of retailers’ diamond jewelry from a range of carat weights and quality grades. They send these for analysis at laboratories including the Gemological Institute of America (GIA), China’s National Gemstone Testing Center (NGTC), the International Gemological Institute (IGI) and various accredited laboratories in Hong Kong.

If initial checks do not confirm a diamond as natural, or if they find the grade differs from what the retailer advertised, gemologists will unmount it from the jewelry and carry out more detailed investigations. So far, all participating jewelers have passed every test, the DFHK said. The scheme also includes an advertising campaign to educate consumers about retailers’ obligations to present diamonds honestly.

“There has been an upward trend in synthetic diamonds in the worldwide market,” Chow observed. However, he added, retailers, wholesalers and manufacturers have worked hard to maintain confidence in diamonds. “Because of their endurance in upholding high integrity standards, the discovery of undisclosed synthetic diamonds in the Hong Kong market is still rare.”