December 27, 2007

IRRADIATED BLUE TOPAZ: NOW WHAT?

By Karla A. Rosenbusch, Associate Editor

Yes, Virginia, it was a green Christmas after all for blue topaz. And, yes, Virginia, it will be an even greener one in 2008.

Here’s our prediction: Blue topaz is going to once again become a cornerstone of the colored stone business. Only this time it will be a perfectly legal cornerstone – provided retailers insist on proper documentation for all irradiated blue topaz they buy.

This paperwork will be readily available now that the Nuclear Regulatory Commission (NRC), which oversees all irradiated commercial products, has granted licenses to three American companies to test and certify blue topaz. So you should be able to buy government-approved blue topaz at the Tucson Gem Show in February. Indeed, it is illegal to sell topaz that hasn’t been officially cleared for commerce.

The New Reality of Topaz
As Colored Stone Editor-in-Chief David Federman reported in the September/October issue, all blue topaz will require an NRC license for “exempt” distribution. New regulations took effect on November 30, placing accelerator-irradiated stones under the same requirements that reactor-irradiated stones have been under since 1988. What that means for the average retailer is that, from this point on, all blue topaz must be surveyed and distributed by an NRC-licensee.

Sound confusing? That’s understandable. You see, there hasn’t been an NRC-licensed testing and distribution facility for blue topaz in more than a decade. Now there is. So put the past behind you and adjust to the new reality of topaz distribution.

The new reality is going to make blue topaz commerce the safest it has ever been. According to the NRC, licenses “provide a safeguard against the possibility that stones might reach the market too soon after irradiation, with radioactivity above NRC limits. The distribution licensee is required to perform sophisticated surveys to verify that the stones meet NRC requirements for exempt distribution.”

As of the first week in December, the Nuclear Regulatory Commission has issued three distribution licenses and two other applications are currently under review. However, each of the current licensees is exclusively affiliated with one major distributor of blue topaz.

One of them, International Isotopes, has an exclusive contract with Quali-Tech Inc. for testing and treating topaz and other stones. The two firms have had a long-term relationship and have tested stones for the international marketplace for quite some time. Now they are testing stones that are currently in inventory for the US market to make sure they’re in compliance with tough US standards. Previously, stones were tested using much laxer Asian standards.

According to Dr. Don Alger of Quali-Tech, “At this point, all main treaters of topaz have established relationships with those for whom they treat and test. There will be a cleaning-up operation for material already in inventory. The question will be topaz that enters inventory in the future.” Here, too, there will be fewer problems than ever before.

As things stands, irradiated blue topaz is a tightly controlled market dominated by three major distributors, all of which have exclusive access to an NRC-licensed testing facility. What that means is that 80 to 90 percent of all neutron and electron-treated blue topaz in the United States will be certified by those three licensed facilities, and that 80 to 90 percent will be distributed by three wholesalers – Apichart in Bangkok, Ostrow Gems in Geneva, and Zimmerman of Germany.

For the remaining 10 to 20 percent, the two additional facilities that have applied to the NRC for licenses will, according to Eric Braunwart of Columbia Gem House, probably be freelance labs who will certify gems for any wholesaler or retailer who wants to use their services.

How to “Blue Sky” Blue Topaz
In an attempt to clear up some of the confusion facing retailers and to alleviate fears, the NRC issued a Fact Sheet on irradiated gems which attempted to answer questions such as whether or not the sale of blue topaz has been banned and if retailers can still sell blue topaz currently in their inventories.
According to the sheet, the agency has not requested any halt to the sales of blue topaz, and the decision about whether or not to stop selling is a business decision that must be made by individual retailers. The fact sheet further says that inventory which existed in retail and distribution channels prior to the end of November and was not distributed by an NRC licensee is not banned and should not be considered illegal or contraband for the time being. As for stock added after that time, the NRC says it is “working to resolve regulatory issues regarding the current inventory of irradiated gemstones.”

Concerning the effect of the new regulations on retailers, David McIntyre of the NRC explains, “Retailers will be under the same regulatory constraints they have been under since the 1980s. They should have paperwork that indicates the irradiated gemstones are not radioactive or have been distributed by an NRC exempt licensee. Short- or long-term, they should be able to demonstrate compliance with NRC regulations.” Braunwart estimates that the costs of compliance will add between 50 cents and $1 per stone to the price of irradiated blue topaz.

The Paper Mate Problem
One of the issues that may arise regarding irradiated gems and the NRC regulations is that of exporting and importing. Here’s the problem. Presently, testing can only be done on loose stones. So if stones must be certified in the US then sent abroad for setting before returning to America, how will jewelers know that stones and clearance papers match? Couldn’t uncertified stones be switched with certified ones?

Theoretically, yes, but, in actual practice, no. Remember, all three licensed facilities are affiliated with major distributors, each of whom presented NRC with a detailed proposal for cheating-free importing, exporting and re-importing. However, to make sure all topaz is legitimate, the NRC will create a second perimeter of defense by having U.S. Customs check all shipments of loose and mounted blue topaz for irregularities with regard to procedures and paperwork. While such a system won’t be in place by the time of the Tucson Gem Show in early February, it should be operational by the time of the Las Vegas Show in June. By then, retailers should be able to request documentation for stones they buy.

Until then, they are likely to be offered so-called “pre-existing inventory.” These are stones imported before licenses were granted and the new regulations for accelerator-treated stones took effect. That’s what Stuller Gems, Lafayette, Louisiana, intends to do. “Adjusting to new procedures is going to take gem dealers a little while,” says Joe Orlando, the company’s chief gem buyer. “During the transition, many firms will simply sell off old inventories that were allowed to be sold without certification by US testing facilities. But soon certified blue topaz will be the norm.”

In the meantime, retailers must learn the ABCs of compliance. Peggy Jo Donahue, Director of Public Affairs for Jewelers of America, tells us, “Jewelers of America has advised its members that they should select their suppliers of irradiated gems carefully to ensure that the original importer or initial distributor of the gems has the required NRC licenses and otherwise complies with the regulations. In some cases, jewelers may also want to confirm that the gems in question are exempt from regulation. In addition, retailers seeking directly import or initially distribute irradiated gemstones themselves must obtain the required NRC licenses and must comply with complex regulations covering quality control, labeling, and recordkeeping. Jewelers of America has cautioned its members to review the applicable rules with knowledgeable counsel before arranging to directly import or initially distribute irradiated gemstones.”

The Joys of Certification
In fact, Jewelers of America asserts that the NRC’s regulations will actually be good for retailers in the long run. Donahue says that retailers “will benefit greatly by their increased understanding of the regulations that govern irradiated gemstones, including blue topaz. They now know more about their supply chain for these gemstones, and that is always a plus, because consumers are asking more questions about their purchases in today’s world. Those retailers who take the added steps to ensure that the irradiated gems they sell have been imported and initially distributed by licensed entities will be able to confidently assure their customers that they and their suppliers are complying with all the laws and regulations that govern these products.”
Barbara Lawrence, head of Boston Gems and the President of AGTA, stated, “[Boston Gems] has already received notices from our blue topaz suppliers that their entire inventory will be licensed going forward. This process has been an excellent example of the industry working with the government to achieve a workable solution.”

For those retailers who are still confused or worried or just unsure about what all this means to them, there is some help available. Donahue reports, “Jewelers of America has already provided a detailed summary to its members concerning the NRC regulations. We have also updated them on recent changes in the laws, so we feel that our members are well-equipped to understand the regulations. We have also encouraged them to seek help by legal counsel to advise them on compliance issues.” In addition, the Jewelers Vigilance Committee, in partnership with AGTA, will be publishing “The Essential Guide to the US Trade in Irradiated Gemstones” which will be available in time for the Tucson show.

Talking Tucson
And what of the Tucson show? While, technically and legally, you should be unable to buy or sell uncertified blue topaz at the show, don’t set your hopes too high. The Gem and Jewelry Exchange, one of the largest shows in Tucson, would find it next to impossible to personally police all of its 700 vendors. As a GJX representative pointed out, “We definitely care about the regulations, but short of hiring a whole staff to walk around all of the booths, there’s not much we can do at this time.”

Don’t expect patrolling of topaz at the AGTA Show either. “As always, we encourage our members to comply with the government regulations,” says Lawrence. “However, it is the responsibility of the NRC, not the AGTA, to be the enforcer for these regulations.”

According to Braunwart, “There will probably be very little certified topaz available at Tucson. People will be selling pre-existing inventory. The only enforcer will be you, the buyer. And you’ll have to understand that there is no guarantee that what you’re buying would actually be in compliance with NRC regulations. You’ll just have to deal with suppliers whom you can trust. Only when Customs starts checking for documents at our borders will the situation iron itself out.”

In short, worries about blue topaz should shortly become unnecessary. This highly controversial and highly popular gem has never been under tighter control. Better yet, strictly enforced NRC regulations should keep a lot of worrisome material out of the market. Indeed, the American marketplace will probably be the safest in the world for irradiated gemstones. And that can only be good for retailers who want to reassure their customers.

The question remains whether or not consumers want to know – or indeed, need to know – if the blue topaz they buy is certified and, thus, safe from any radiation. Most of the general public is probably not even aware there is anything to be concerned about. But once all the licenses have been granted, all the procedures are in place, and all the irradiated gems have been tested, jewelers will be able to reassure customers that they’re buying the best and safest blue topaz in the world—that is, if they ask.

November/December 2007 • Doctored Emeralds Raise Questions • An Open Letter Jewelry Industry Regarding the Burma Gem Boycott • Jewelry Industry Boycott of Burmese Gems Gains Momentum • Update on Irradiated Blue Topaz: Now What?