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00082-128252.Pdf (4.42 The Federal Trade Commission Office of the Secretary 600 Pennsylvania Avenue N.W. Suite CC-5610- (Annex O) Washington, D.C. 20580 Via electronic submission: https://ftcpublic.commentworks.com/ftc/jewelryguidesreview June 3, 2016 Re: Jewelry Guides, 16 CFR Part 23, Project NO G71101 The following constitutes the comments of the undersigned trade associations and entities (“JVC Coalition”). These comments are submitted in response to the Federal Register Notice issued by the Federal Trade Commission (“Commission” or “FTC”) on December 28, 2015 regarding its proposed revisions to the Guides for the Jewelry, Precious Metals, and Pewter Industries (“Guides” or “Jewelry Guides”). The JVC Coalition represents the entire jewelry industry – manufacturers, wholesalers, distributors, precious metal suppliers and refiners, gemstone dealers, and retailers. We are grateful for the opportunity to comment on the Commission’s proposed revisions to the Jewelry Guides, and appreciate the attention that will be afforded our response. I. INTRODUCTION AND SUMMARY OF PRINCIPLE RECOMMENDATIONS The FTC Guides are of enormous importance to the Jewelry Industry. To the great benefit of consumers, the Guides function as accepted standards within the trade, helping to create a level playing field and to sustain consumer confidence. In the absence of other specific laws that govern the manufacture and sale of our products, they are studied in detail and closely adhered to by the large majority of the industry. The JVC Coalition has thus carefully considered the Commission’s Proposed Guides and offers our comments and recommendations below. Our principle recommendations are summarized here: 1. Surface applications of precious metals a. Thickness of coating for use of terms “Gold Plated(d)” (in the context of electrolytic applications) and “Gold Electroplate(d):” The existing safe harbor of 7 millionths of an inch (.175 microns) is adequate to meet consumer expectations. Increasing the safe harbor to 15 millionths of an inch (.381 microns), as proposed by the Commission, is not necessary as explained below. b. Minimum thickness standard for mechanical surface applications of gold: i. A minimum thickness standard, as proposed by the Commission, is not necessary to meet consumer expectations as explained below. ii. The standard for a gold coating on an article described as “gold filled” should continue to be set at 1/20th the weight of the metal in the entire article, but without a thickness requirement. iii. The gold coating on an article described as “gold plate(d),” “rolled gold plate” or “gold overlay” should not fall below 1/20th the weight of the metal in the entire article, but no minimum thickness standard should be required. While the current Guides require sellers to disclose the weight ratio if it falls below 1/20th, it does not impose a minimum weight ratio (or minimum thickness). c. Electrolytic surface applications of gold: A twenty-two karat minimum is not necessary to meet consumer expectations; however, the examples to proposed Section 23.3(c)(3) should make clear that the disclosure of karat quality is required, e.g., “22 Kt. Gold Plate,” “18 Kt. Gold Electroplate,” or “14 Kt. Gold Washed.” d. “Reasonable durability” should be required of any product represented to have a surface application of precious metal. 2. Below Minimum Threshold Silver Alloys a. Sellers may use the term “silver” to describe these products, but only if the following disclosures are made: i. The quality fineness of the silver in the alloy must be identified. ii. The product containing the silver alloy must be described as “Low Silver,” e.g., “750 PPT Low Silver.” iii. The product must be stamped indicating the parts per thousand of silver and the designation “Low Silver” or “LS.” 2 iv. Buyers must be advised that “this article materially differs with respect to tarnish and corrosion resistance from a product made with at least 925 PPT Silver.” 3. Below Minimum Threshold Gold Alloys a. Sellers may use the term “gold” to describe these products, but only if the product has at least eight karats of gold, and the following disclosures are made: i. The quality fineness of the gold in the alloy must be identified, with a minimum required threshold of 8 karats. ii. The product containing the gold alloy must be described as “Low Gold,” e.g., “8 Kt. Low Gold.” iii. The product must be stamped indicating the karat quality and the designation “Low Gold” or “LG.” iv. Buyers must be advised that “this article materially differs with respect to tarnish and corrosion resistance from a product made with at least 10K gold.” 4. Composite Stones a. “Composite” and “manufactured composite” should be designated as the appropriate terms to describe these products. The term “lead-glass-filled” should not be allowed. b. The Commission’s proposed note to Section 23.25 states that “[i]t would be unfair or deceptive to describe products filled with a substantial quantity of lead glass in the following way…” [emphasis added]. Any amount of lead glass (or other binder or filler) in a stone should be disclosed. Thus, the term “substantial” should be removed from the proposed note. c. The Commission should amend the proposed note to clarify that its guidance applies to any composite stone, not just those containing lead glass. 5. Synthetic Diamonds and Use of the Term “Cultured” The term “cultured” should not be allowed to describe these diamonds, even when qualified with the terms “synthetic,” “laboratory-grown,” “laboratory-created” or “[manufacturer-name]-created.” 3 6. Disclosure of Treatments to Pearls The Commission should add a note to its proposed section addressing pearl treatments to state that sellers must disclose if a pearl has been dyed. 7. Handmade The Commission should create a safe harbor in Proposed Section 23.2 making clear that jewelry that is hand cast may be described as “handmade” or “hand-wrought.” II. “GOLD PLATE(D)” AND “GOLD ELECTROPLATE(D):” MINIMUM THICKNESS OF SEVEN MILLIONTHS OF AN INCH (.175 MICRONS) WILL MEET CONSUMER EXPECTATIONS In the Proposed Guides, the safe harbor for use of the terms “plate(d)” (in the context of electrolytic applications) and “electroplate(d)” has more than doubled, from 7 millionths of an inch (.175 microns) to 15 millionths of an inch (.381 microns). This increase is not necessary to protect consumers. In 2012, we advised the Commission that a minimum thickness of 7 millionths of an inch (.175 microns) was adequate to ensure the reasonable durability of electrolytic applications of gold, consistent with consumer expectations.1 This recommendation was based on testing that simulated normal wear, and on long experience in the industry with electrolytic applications of varying thicknesses.2 Seven millionths of an inch has been the Commission’s standard for use of the term “electroplate(d)” since at least 1996, when the Jewelry Guides were last reviewed. There is no record at JVC, or institutional memory, of ever receiving complaints relating to this standard. We therefore again recommend seven millionths of an inch (.175 microns) as the minimum standard for products described as “gold plate(d)” and “gold electroplate(d).” An element of confusion was inadvertently inserted into this discussion in a test report prepared by Leach Garner. This report was included with JVC’s 2013 Response in support of its 3 recommendations regarding mechanical applications of gold. The test was conducted to 1See 2012 JVC SUBMISSION at p. 9-16, and Exhibits 1 and 13 to the 2012 Response. 2See TABER INDUSTRIES, WEAR TEST REPORT (2013); TANURY INDUSTRIES VIBRATION WEAR TEST REPORT (2013); see also Statement from Michael A. Akkaoui (June 4, 2013), in 2013 JVC SUBMISSION app. at Exhibits 8, 7 and 6, respectively. 3LEACH GARNER TEST REPORT (2013) in 2013 JVC SUBMISSION app. at Exhibit 5. 4 compare mechanical and electrolytic applications of gold exposed to severe wear. According to the test report, the collected data supported a minimum thickness of 15 millionths of an inch (.381 microns) for electrolytic applications of gold. This observation, which contradicts the comprehensive testing, careful analysis and industry expertise supporting our recommended minimum of 7 millionths of an inch (.175 microns), was not explained in the report. The attached statement of Grigory Raykhtsaum, one of the metallurgists who authored the Leach Garner report, provides explanation and context for his test findings.4 In short, the “tumble” test conducted by Leach Garner subjected samples to “severe” wear, resulting in a gold loss of about 14 millionths of an inch (.356 microns) on those samples with electrolytic applications. The test corresponded to a degree of prolonged handling and wear that was likely to exceed the life of an actual jewelry product. While these severe test results may have provided helpful comparative information for his company, Mr. Raykhtsaum explains that they are not useful or relevant for setting industry-wide standards based on normal wear. As an industry veteran, he observes that seven millionths of an inch (.175 microns) has long been the standard in the trade for “electroplate,” and that he is unaware of consumer complaints related to this minimum. The standard for use of the terms “plate(d)” and “electroplate(d)” should be based on “normal” wear tests, the type conducted in support of our 2012 and 2013 Responses, recommending a minimum thickness of 7 millionths of an inch (.175 microns). It was not the intention of the Leach Garner report, nor is it necessary, to upend industry practice by more than doubling the thickness requirement for electroplated products. For that reason, we again recommend a minimum thickness of 7 millionths of an inch (.175 microns) for products described as “plate(d)” or “electroplate(d).”5 4Statement from Grigory Raykhtsaum (May 20, 2016), Exhibit 1. 5See infra Part IV (The JVC Coalition there is recommending that a 22 karat minimum not be required for electrolytic applications of gold.
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