Russian Colored Gemstone Market

(via Incolor, Summer 2008) Pavel Sokolov writes:

The state of the gemstone market during the Soviet period
In Soviet times, practically no natural gemstones were available on the Russian jewelry market, and jewelers had to use synthetic stones for inlays. Most of the jewelry produced in this country came with amber, nephrite, malachite, charoite, moss agate and jasper. Emeralds from the Malyshevskoye field were extremely rare, while alexandrite, mined in that same field, could not be bought because it was never put on sale at home or abroad; all of it went to Gokhran (or State Depository for Precious stones and Precious Metals). After the collapse of the Soviet Union, more colored gemstones began to find their way onto the market. At first, they were cheap stones with poor characteristics, such as blue topaz, garnet, amethyst and olivine. Later on, emerald and sapphire started to become available. At present, the Russian jewelry market, as with other foreign markets, abounds with colored gemstones of low and medium quality. There are not many gemstones of high quality in Russia or any other country of the world.

Stones in demand
The Russian cities with the largest proportion of consumers of jewelry, both medium and high-priced, are Moscow, St. Petersburg and Yekaterinburg. Russian manufacturers use a wide range of colored stones. For making exclusive ornaments, they use large and ideally faceted amethysts, citrines, aquamarines and tourmalines. The high-end stones are sapphire, emerald and ruby. Of late, there has been demand for tanzanite and high-quality opal. Spinel, which was very popular in Russia in the 18th and19th centuries, is practically forgotten today. Pearl is extremely popular. Blue topaz and garnet are most often used for mass-demand items. There has lately been increased demand for inlays of three, five and even 10 carat stones.

Problems facing foreign companies
Russian laws governing the work of the customs, or rather the customs clearance procedures, create a great many problems for foreign suppliers. Customs clearance sometimes takes so long that foreign exhibitors are often afraid that their precious stones will only make their way through customs after a period of 10 to 15 days, and that they will have to go to the exhibition without their stones. One factor that restrains foreign suppliers is Russia’s 20 percent import duty on colored stones. It is not because this duty has to be paid, but because it is non-refundable. For example, a foreign firm comes to the Russian market with its precious stones after duly paying the 20 percent duty on the stones. Suppose this foreigner fails to sell his stones in Russia and wants to take them back to his homeland. Russian customs will not refund him the duty he had paid on the stones upon entering the country. It is clear that 20 percent of the value of the gems is too large a sum to leave behind upon leaving Russia. Nor can a foreigner sell gems on commission in Russia. The trouble is that a stone of tremendous value may travel round the world several times before it finds a buyer. I’m unable to show such a valuable sample to buyers in Russia because I would have to pay an import duty on it on entering this country with it. If I fail to sell it here, I would have to give it back to the owner, and I would not get a refund of the 20 percent import duty I had paid. As for the procedure of temporary import into Russia, it involves too many complicated and time-consuming formalities.

Useful link:
www.gemstone.org

The Russian market is promising but very difficult. Know before you go.