Federal Register, Volume 81 Issue 7 (Tuesday, January 12, 2016)

[Federal Register Volume 81, Number 7 (Tuesday, January 12, 2016)]
[Proposed Rules]
[Pages 1349-1359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00107]

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FEDERAL TRADE COMMISSION

16 CFR Part 23

Guides for the Jewelry, Precious Metals, and Pewter Industries

AGENCY: Federal Trade Commission.

ACTION: Request for public comments on proposed amendments.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
proposes revisions to its Guides for the Jewelry, Precious Metals, and
Pewter Industries (``Jewelry Guides'' or ``Guides''). The proposed
revisions aim to respond to changes in the marketplace and help
marketers avoid deceptive and unfair practices. This document
summarizes the Commission's proposed revisions to the Guides and
includes the proposed revised Guides.

DATES: Comments must be received on or before April 4, 2016.

ADDRESSES: Readers can find the Commission's complete analysis in the
Statement of Basis and Purpose (``Statement'') on the FTC's Web site at
https://www.ftc.gov/public-statements/2015/12/statement-basis-purpose-proposed-revisions-jewelry-guides. The Commission seeks comments on
these proposed revisions and other issues raised in this document.
Interested parties may file a comment online or on paper, by following
the instructions in the Request for Comment part of the SUPPLEMENTARY
INFORMATION section below. Write ``Jewelry Guides, 16 CFR part 23,
Project No. G711001'' on your comment, and file your comment online at
https://ftcpublic.commentworks.com/ftc/jewelryguidesreview, by
following the instructions on the web-based form. If you prefer to file
your comment on paper, mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex O), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex O), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Reenah L. Kim, Attorney, (202) 326-
2272, Division of Enforcement, Bureau of Consumer Protection, Federal
Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: In July 2012, the Commission published a
Federal Register notice initiating a comprehensive regulatory review of
the Jewelry Guides.\1\ As part of this review,

[[Page 1350]]

the Commission has reviewed the public comments it received in response
to the notice, as well as the transcript of a public roundtable it
conducted to obtain additional input.\2\ During the review, the
Commission received information regarding technological developments
and related changes in industry standards and practices and consumer
perceptions that affected certain provisions of the Guides.
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\1\ 77 FR 39201 (July 2, 2012). The Commission issues industry
guides to help the industry conform with legal requirements. 16 CFR
part 17. Industry guides are administrative interpretations of the
law; they do not have the force of law and are not independently
enforceable. Failure to follow industry guides may result, however,
in enforcement action under the FTC Act, 15 U.S.C. 45. In any such
action, the Commission must prove that the act or practice at issue
is unfair or deceptive in violation of Section 5 of the FTC Act.
\2\ As explained in more detail in the Statement of Basis and
Purpose, the Commission completed its last comprehensive review of
the Jewelry Guides in 1996 (61 FR 27178 (May 30, 1996)), and has
modified the Guides four times since, most recently in 2010. 75 FR
81443 (Dec. 28, 2010) (providing guidance on how to mark and
describe non-deceptively certain platinum alloys).
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Under Section 5 of the FTC Act,\3\ an act or practice is deceptive
if it involves a material statement or omission that would mislead a
consumer acting reasonably under the circumstances.\4\ Therefore, to
prevent deceptive acts and practices pursuant to Section 5, the
Commission's guidance should be based on how consumers reasonably
interpret claims. The Commission has tried to use available consumer
perception evidence whenever possible to develop its guidance. Because
marketers have relied on these Guides for decades and have made
significant expenditures based on this guidance, the Commission
proposes revising existing provisions only when there is a firm record
supporting revision. Additionally, the Commission proposes new guidance
only when supported by solid evidence of deception to avoid chilling
the use of truthful terms that may be useful to consumers.
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\3\ 15 U.S.C. 45.
\4\ FTC Policy Statement on Deception, appended to Cliffdale
Assoc., Inc., 103 FTC 110 (1984); see also FTC v. Verity Int'l Ltd.,
443 F.3d 48, 63 (2d Cir. 2006); FTC v. Pantron I Corp., 33 F.3d
1088, 1095 (9th Cir. 1994).
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Based on this framework, the Commission now proposes several
amendments to the Guides. Specifically, the Commission proposes
revisions in the following areas: (I) Surface application of precious
metals; (II) products containing more than one precious metal; (III)
alloys with precious metals in amounts below minimum thresholds; (IV)
lead-glass-filled stones; (V) varietals; (VI) ``cultured'' diamonds;
(VII) use of the term ``gem''; and (VIII) treatments to pearl products.

I. Surface Application of Precious Metals

The Commission proposes three revisions to its guidance on precious
metal surface applications. First, based on the comments, to address
the deceptive use of precious metal terms for silver and platinum
products that are not composed throughout of the advertised metal, the
Commission proposes to advise marketers against using silver or
platinum terms to describe all, or part of, a coated product unless
they adequately qualify the term to indicate the product has only a
surface layer of the advertised precious metal.\5\
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\5\ Proposed Section 23.5(b)(3) (silver) and Section 23.6(b)(1)
(platinum).
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Second, based on new durability testing, the Commission proposes to
update the safe harbors for surface applications of gold.\6\
Specifically, this testing shows that the durability marketers intend
to convey can be assured only at thicknesses higher than those
specified in the current Guides. Additionally, this testing
demonstrates that, for electrolytic applications, durability is assured
only when marketers use gold or gold alloy of at least 22 karat
fineness, rather than the 10 karat fineness currently provided. The
Commission seeks evidence about consumer expectations regarding the
durability of products with a surface application of precious metals as
compared to products composed throughout of precious metals. As
discussed in the Statement, the Commission does not propose guidance
for new terms to describe surface applications of silver and platinum
group metals not addressed in the Guides, nor does it propose guidance
for new surface-application terms, such as ``clad'' and ``bonded,'' to
describe gold and other surface applications. The Commission lacks
sufficient evidence on which to base such guidance.
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\6\ Proposed Section 23.3(c). In various places, the current
Guides' safe harbors refer both to ``reasonable durability,'' which
is not defined, and ``substantial thickness,'' which is defined to
mean that ``all areas of the plating are of such thickness as to
assure a durable coverage of the base metal to which it has been
affixed.'' See, e.g., Section 23.4(c)(2), fn 3 (mechanical plating
of gold or gold alloy) and 23.6(d) (silver). To clarify that
reasonable durability is based on consumer expectation, the
Commission proposes defining ``reasonable durability'' as ``all
areas of the plating are of such thickness as to assure coverage
that reasonable consumers would expect from the surface
application.'' See, e.g., proposed Section 23.3(b)(4), fn 2. This
proposed definition incorporates, and therefore replaces, the
guidance regarding ``substantial thickness'' where it appears in the
gold and silver sections.
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Third, based on consumer perception evidence, the Commission
proposes a new section advising marketers to disclose rhodium surface
applications on products marked or described as precious metal, such as
rhodium plated items marketed as ``white gold'' or silver.'' \7\
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\7\ Proposed Section 23.7.
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II. Products Containing More Than One Precious Metal

Consistent with consumer perception evidence, the Commission
proposes adding a new section that states it is unfair or deceptive to
misrepresent the relative quantity of each precious metal in a product
that contains more than one precious metal.\8\ The proposed guidance
advises marketers generally to list precious metals in the order of
their relative weight from greatest to least (i.e., leading with the
predominant metal). However, it includes examples illustrating that, in
some contexts, consumers likely understand that a product contains a
greater amount of one metal, even though another metal is listed first
(e.g., ``14k gold-accented silver''). It also provides examples of
marking and descriptions of terms that may be misleading (e.g., use of
the term ``Platinum + Silver'' to describe a product that contains more
silver than platinum by weight).
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\8\ Proposed Section 23.8.
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III. Alloys With Precious Metals in Amounts Below Minimum Thresholds

The Commission proposes to revise the Guides to address gold and
silver products containing precious metal in amounts below the levels
currently specified in the Guides. The current Guides advise marketers
to avoid using the terms ``gold,'' ``silver,'' or ``platinum,'' or
their abbreviations, to describe or mark a product unless it contains
the precious metal in an amount that meets or exceeds the levels
specified in Section 23.4 (gold), 23.6 (silver), and 23.7 (platinum
group metals). The Commission proposes adding new guidance to the gold
and silver sections regarding marketers who have competent and reliable
scientific evidence that below-threshold products have materially
similar properties (e.g., corrosion- and tarnish-resistance) to at- or
above-threshold products. This proposed guidance advises that these
marketers may non-deceptively reference these precious metals without
additional disclosures other than purity.\9\ Further, the proposed
guidance advises marketers selling below-threshold gold and silver
alloys that materially differ from at- or above-

[[Page 1351]]

threshold products (e.g., 8 karat gold items that tarnish) that they
may non-deceptively reference these metals if they disclose that the
product may not have the same attributes or properties as jewelry made
with the same precious metal at or above the threshold.\10\ Finally,
the notes advise marketers to accurately disclose the purity of the
metal.\11\ These changes should enable marketers to provide truthful
information about precious metal content while dispelling the
impression that a product will perform as well as one made with that
precious metal in amounts at or above the threshold. For reasons
described in the Statement, the Commission does not propose a
corresponding note for platinum alloys containing less than 500 parts
per thousand platinum.
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\9\ Proposed Note to Section 23.3(b)(9) (gold); proposed Note to
Section 23.5(1) and (2) (silver).
\10\ Id.
\11\ Id.
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IV. Lead-Glass-Filled Stones

The Commission proposes adding a new note to the section on
``Misuse of the words `ruby,' `sapphire,' etc.'' \12\ Based on consumer
perception evidence, this proposed note states it would be unfair or
deceptive to describe products filled with a substantial quantity of
lead glass: With the unqualified word ``ruby'' or name of any other
precious or semi-precious stone; as a ``treated ruby'' or other
``treated'' precious or semi-precious stone; as a ``laboratory-grown,''
``laboratory-created,'' ``[manufacturer name]-created,'' or
``synthetic'' ruby or other natural stone; or as a ``composite ruby,''
``manufactured ruby,'' ``hybrid ruby,'' or other precious or semi-
precious stone without qualification. The Commission also proposes some
examples of terms marketers could use to describe these products non-
deceptively (e.g., use of the term ``lead-glass-filled ruby'' to
describe a product made with ruby that is infused with lead glass).\13\
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\12\ Proposed Note to Section 23.25.
\13\ Id.
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V. Varietals

The Commission proposes adding a new section that states it is
unfair or deceptive to mark or describe a product with an incorrect
varietal name.\14\ Varietal names describe a division of gem species or
genus based on color, type of optical phenomenon, or other
distinguishing characteristic of appearance (e.g., crystal structure).
Based on consumer perception evidence, this proposed section provides
two examples of markings or descriptions that may be misleading: (1)
Use of the term ``yellow emerald'' to describe a golden beryl or
heliodor, and (2) the use of the term ``green amethyst'' to describe
prasiolite.
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\14\ Proposed Section 23.27.
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VI. ``Cultured'' Diamonds

Based on consumer perception evidence, the Commission proposes
adding a new diamond example that states it is not unfair or deceptive
to use the term ``cultured'' to describe laboratory-created diamonds if
the term is immediately accompanied by ``laboratory-created,''
``laboratory-grown,'' ``[manufacturer name]-created,'' ``synthetic,''
or by another word or phrase of like meaning.\15\
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\15\ Proposed Section 23.12(c)(3).
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VII. Misuse of the Word ``Gem''

Based on comments noting that the guidance on the term ``gem'' is
circular and subjective, the Commission proposes eliminating Section
23.25 (``Misuse of the word `gem' ''). In its place, the Commission
proposes adding the term ``gem'' to Section 23.23 \16\ (Misuse of the
words ``ruby,'' ``sapphire,'' ``emerald,'' ``topaz, ``stone,''
``birthstone,'' ``gemstone,'' etc.). The Commission also proposes
eliminating Section 23.20(j) (misuse of the word ``gem'' as to pearls).
As discussed in the Statement, the Commission does not propose further
guidance for the term ``gem'' with regard to pearls.
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\16\ Renumbered as Section 23.25 in the proposed Guides.
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VIII. Treatments to Pearl Products

Based on comments, the Commission proposes a new section addressing
disclosures of treatments to pearls and cultured pearls. This section
advises marketers to disclose treatments to such products if the
treatment: (a) Is not permanent; (b) creates special care requirements
or (c) has a significant effect on the product's value.\17\ The
guidance largely tracks the current guidance regarding gemstone
treatments.\18\
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\17\ Proposed Section 23.23.
\18\ 16 CFR 23.22 (now renumbered as proposed Section 23.24).
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IX. Conclusion

For further analysis of comments and the proposed revised guidance,
please see the Statement of Basis and Purpose on the FTC's Web site,
available at https://www.ftc.gov/public-statements/2015/12/statement-basis-purpose-proposed-revisions-jewelry-guides.

List of Subjects in 16 CFR Part 23

Advertising, Jewelry, Labeling, Pewter, Precious metals, and Trade
practices.
For the reasons set forth in the preamble, and in the Statement of
Basis and Purpose on the FTC's Web site, available at https://www.ftc.gov/public-statements/2015/12/statement-basis-purpose-proposed-revisions-jewelry-guides, the Commission proposes to revise 16 CFR part
23, as set forth below:

PART 23--GUIDES FOR THE JEWELRY, PRECIOUS METALS, AND PEWTER
INDUSTRIES

Sec.
23.0 Scope and application.
23.1 Deception (general).
23.2 Misuse of the terms ``hand-made,'' ``hand-polished,'' etc.
23.3 Misrepresentation as to gold content.
23.4 Misuse of the word ``vermeil.''
23.5 Misrepresentation as to silver content.
23.6 Misuse of the words ``platinum,'' ``iridium,'' ``palladium,''
``ruthenium,'' ``rhodium,'' and ``osmium.''
23.7 Disclosure of surface-layer application of rhodium.
23.8 Misrepresentation as to products containing more than one
precious metal.
23.9 Misrepresentation as to content of pewter.
23.10 Additional guidance for the use of quality marks.
23.11 Misuse of ``corrosion proof,'' ``non-corrosive,'' ``corrosion
resistant,'' ``rust proof,'' ``rust resistant,'' etc.
23.12 Definition and misuse of the word ``diamond.''
23.13 Misuse of the words ``flawless,'' ``perfect,'' etc.
23.14 Disclosure of treatments to diamonds.
23.15 Misuse of the term ``blue white.''
23.16 Misuse of the term ``properly cut,'' etc.
23.17 Misuse of the words ``brilliant'' and ``full cut.''
23.18 Misrepresentation of weight and ``total weight.''
23.19 Definitions of various pearls.
23.20 Misuse of the word ``pearl.''
23.21 Misuse of terms such as ``cultured pearl,'' ``seed pearl,''
``Oriental pearl,'' ``natura,'' ``kultured,'' ``real,''
``synthetic,'' and regional designations.
23.22 Misrepresentation as to cultured pearls.
23.23 Disclosure of treatments to pearls and cultured pearls.
23.24 Disclosure of treatment to gemstones.
23.25 Misuse of the words ``ruby,'' ``sapphire,'' ``emerald,''
``topaz,'' ``stone,'' ``birthstone,'' ``gem,'' ``gemstone,'' etc.
23.26 Misuse of the words ``real,'' ``genuine,'' ``natural,''
``precious,'' etc.
23.27 Misrepresentation as to varietal name.
23.28 Misuse of the words ``flawless,'' ``perfect,'' etc.
Appendix To Part 23--Exemptions Recognized in the Assay for Quality
of Gold Alloy, Gold Filled, Gold Overlay, Rolled Gold Plate, Silver,
and Platinum Industry Products

Authority: 15 U.S.C. 45, 46.

[[Page 1352]]

Sec. 23.0 Scope and application.

(a) These guides apply to jewelry industry products, which include,
but are not limited to, the following: Gemstones and their laboratory-
created and imitation substitutes; natural and cultured pearls and
their imitations; and metallic watchbands not permanently attached to
watches. These guides also apply to articles, including optical frames,
pens and pencils, flatware, and hollowware, fabricated from precious
metals (gold, silver and platinum group metals), precious metal alloys,
and their imitations. These guides also apply to all articles made from
pewter. For the purposes of these guides, all articles covered by these
guides are defined as ``industry products.''
(b) These guides apply to persons, partnerships, or corporations,
at every level of the trade (including but not limited to
manufacturers, suppliers, and retailers) engaged in the business of
offering for sale, selling, or distributing industry products.

Note to paragraph (b): To prevent consumer deception, persons,
partnerships, or corporations in the business of appraising,
identifying, or grading industry products should utilize the
terminology and standards set forth in the guides.

(c) These guides apply to claims and representations about industry
products included in labeling, advertising, promotional materials, and
all other forms of marketing, whether asserted directly or by
implication, through words, symbols, emblems, logos, illustrations,
depictions, product brand names, or through any other means.
(d) These guides set forth the Federal Trade Commission's current
thinking about claims for jewelry and other articles made from precious
metals and pewter. The guides help marketers and other industry members
avoid making claims that are unfair or deceptive under Section 5 of the
FTC Act, 15 U.S.C. 45. They do not confer any rights on any person and
do not operate to bind the FTC or the public. The Commission, however,
may take action under the FTC Act if a marketer or other industry
member makes a claim inconsistent with the guides. In any such
enforcement action, the Commission must prove that the challenged act
or practice is unfair or deceptive in violation of Section 5 of the FTC
Act.
(e) The guides consist of general principles, specific guidance on
the use of particular claims for industry products, and examples.
Claims may raise issues that are addressed by more than one example and
in more than one section of the guides. The examples provide the
Commission's views on how reasonable consumers likely interpret certain
claims. Industry members may use an alternative approach if the
approach satisfies the requirements of Section 5 of the FTC Act.
Whether a particular claim is deceptive will depend on the net
impression of the advertisement, label, or other promotional material
at issue. In addition, although many examples present specific claims
and options for qualifying claims, the examples do not illustrate all
permissible claims or qualifications under Section 5 of the FTC Act.

Sec. 23.1 Deception (general).

It is unfair or deceptive to misrepresent the type, kind, grade,
quality, quantity, metallic content, size, weight, cut, color,
character, treatment, substance, durability, serviceability, origin,
price, value, preparation, production, manufacture, distribution, or
any other material aspect of an industry product.

Note 1 to Sec. 23.1: If, in the sale or offering for sale of an
industry product, any representation is made as to the grade
assigned the product, the identity of the grading system used should
be disclosed.

Note 2 to Sec. 23.1: To prevent deception, any qualifications
or disclosures, such as those described in the guides, should be
sufficiently clear and prominent. Clarity of language, relative type
size and proximity to the claim being qualified, and an absence of
contrary claims that could undercut effectiveness, will maximize the
likelihood that the qualifications and disclosures are appropriately
clear and prominent.

Note 3 to Sec. 23.1: An illustration or depiction of a diamond
or other gemstone that portrays it in greater than its actual size
may mislead consumers, unless a disclosure is made about the item's
true size.

Sec. 23.2 Misuse of the terms ``handmade,'' ``hand polished,'' etc.

(a) It is unfair or deceptive to represent, directly or by
implication, that any industry product is handmade or hand-wrought
unless the entire shaping and forming of such product from raw
materials and its finishing and decoration were accomplished by hand
labor and manually controlled methods which permit the maker to control
and vary the construction, shape, design, and finish of each part of
each individual product.

Note to paragraph (a): As used herein, ``raw materials'' include
bulk sheet, strip, wire, precious metal clays, ingots, casting
grain, and similar items that have not been cut, shaped, or formed
into jewelry parts, semi-finished parts, or blanks.

(b) It is unfair or deceptive to represent, directly or by
implication, that any industry product is hand forged, hand engraved,
hand finished, or hand polished, or has been otherwise hand processed,
unless the operation described was accomplished by hand labor and
manually controlled methods which permit the maker to control and vary
the type, amount, and effect of such operation on each part of each
individual product.

Sec. 23.3 Misrepresentation as to gold content.

(a) It is unfair or deceptive to misrepresent the presence of gold
or gold alloy in an industry product, or the quantity or karat fineness
of gold or gold alloy contained in the product, or the karat fineness,
thickness, weight ratio, or manner of application of any gold or gold
alloy plating, covering, or coating on any surface of an industry
product or part thereof.
(b) The following are examples of markings or descriptions that may
be misleading: \1\
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\1\ See Sec. 23.3(c) for examples of acceptable markings and
descriptions.
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(1) Use of the word ``Gold'' or any abbreviation, without
qualification, to describe all or part of an industry product, which is
not composed throughout of fine (24 karat) gold.
(2) Use of the word ``Gold'' or any abbreviation to describe all or
part of an industry product composed throughout of an alloy of gold,
unless a correct designation of the karat fineness of the alloy
immediately precedes the word ``Gold'' or its abbreviation, and such
fineness designation is of at least equal conspicuousness.
(3) Use of the word ``Gold'' or any abbreviation to describe all or
part of an industry product that is not composed throughout of gold or
a gold alloy, but is surface-plated or coated with gold alloy, unless
the word ``Gold'' or its abbreviation is adequately qualified to
indicate that the product or part is only surface-plated.
(4) Use of the term ``Gold Plate,'' ``Gold Plated,'' or any
abbreviation to describe all or part of an industry product unless such
product or part contains a surface-plating of gold alloy, applied by
any process, which is of such thickness and extent of surface coverage
that reasonable durability \2\ is assured.
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\2\ For the purpose of this section, ``reasonable durability''
means that all areas of the plating are of such thickness as to
assure coverage that reasonable consumers would expect from the
surface application. Since industry products include items having
surfaces and parts of surfaces that are subject to different degrees
of wear, the thickness of the surface application for all items or
for different areas of the surface of individual items does not
necessarily have to be uniform.

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[[Page 1353]]

(5) Use of the terms ``Gold Filled,'' ``Rolled Gold Plate,''
``Rolled Gold Plated,'' ``Gold Overlay,'' or any abbreviation to
describe all or part of an industry product unless such product or part
contains a surface plating of gold alloy applied by a mechanical
process and of such thickness and extent of surface coverage that
reasonable durability is assured, and unless the term is immediately
preceded by a correct designation of the karat fineness of the alloy
that is of at least equal conspicuousness as the term used.
(6) Use of the terms ``Gold Plate,'' ``Gold Plated,'' ``Gold
Filled,'' ``Rolled Gold Plate,'' ``Rolled Gold Plated,'' ``Gold
Overlay,'' or any abbreviation to describe a product in which the layer
of gold plating has been covered with a base metal (such as nickel),
which is covered with a thin wash of gold, unless there is a disclosure
that the primary gold coating is covered with a base metal, which is
gold washed.
(7) Use of the terms ``Gold Electroplate,'' ``Gold Electroplated,''
or any abbreviation to describe all or part of an industry product
unless such product or part is electroplated with gold or a gold alloy
and such electroplating is of such karat fineness, thickness, and
extent of surface coverage that reasonable durability is assured.
(8) Use of any name, terminology, or other term to misrepresent
that an industry product is equal or superior to, or different than, a
known and established type of industry product with reference to its
gold content or method of manufacture.
(9) Use of the word ``Gold'' or any abbreviation, or of a quality
mark implying gold content (e.g., 9 karat), to describe all or part of
an industry product that is composed throughout of an alloy of gold of
less than 10 karat fineness.

Note to paragraph (b)(9): For an industry product that is not
composed throughout of an alloy of gold of at least 10 karat
fineness, using the word ``gold'' or any abbreviation, or a quality
mark implying gold content (e.g., 9 karat), may not be deceptive to
describe all or part of the product if the marketer has competent
and reliable scientific evidence that such product does not differ
materially from a product composed throughout of an alloy of gold of
at least 10 karat fineness with respect to the following attributes
or properties: Corrosion resistance, tarnish resistance, and any
other attribute or property material to consumers. In those
circumstances, a correct designation of the karat fineness of the
alloy should immediately precede the word ``gold'' or its
abbreviation, and such fineness designation should be of at least
equal conspicuousness. If the marketer lacks such evidence, in
addition to disclosing the karat fineness of the alloy, it should
also disclose that the product may not have the same attributes or
properties as products that contain at least 10 karats.

(c) The following are examples of markings and descriptions that
are consistent with the principles described above:
(1) An industry product or part thereof, composed throughout of an
alloy of gold of not less than 10 karat fineness, may be marked and
described as ``Gold'' when such word ``Gold,'' wherever appearing, is
immediately preceded by a correct designation of the karat fineness of
the alloy, and such karat designation is of equal conspicuousness as
the word ``Gold'' (for example, ``14 Karat Gold,'' ``14 K. Gold,'' or
``14 Kt. Gold''). Such product may also be marked and described by a
designation of the karat fineness of the gold alloy unaccompanied by
the word ``Gold'' (for example, ``14 Karat,'' ``14Kt.,'' or ``14 K.'').

Note to paragraph (c)(1): Use of the term ``Gold'' or any
abbreviation to describe all or part of a product that is composed
throughout of gold alloy, but contains a hollow center or interior,
may mislead consumers, unless the fact that the product contains a
hollow center is disclosed in immediate proximity to the term
``Gold'' or its abbreviation (for example, ``14 Karat Gold-Hollow
Center,'' or ``14 K. Gold Tubing,'' when of a gold alloy tubing of
such karat fineness). Such products should not be marked or
described as ``solid'' or as being solidly of gold or of a gold
alloy. For example, when the composition of such a product is 14
karat gold alloy, it should not be described or marked as either
``14 Kt. Solid Gold'' or as ``Solid 14 Kt. Gold.''

(2) An industry product or part thereof on which there has been
affixed on all significant surfaces by soldering, brazing, welding, or
other mechanical means, a plating of gold alloy of not less than 10
karat fineness and of a minimum thickness throughout of gold or gold
alloy that is 170 millionths of an inch (approximately 4.3 microns) may
be marked or described as ``Gold Filled,'' ``Gold Overlay,'' ``Rolled
Gold Plate,'' ``Gold Plate,'' ``Gold Plated,'' or an adequate
abbreviation, when such plating constitutes at least 1/20th of the
weight of the metal in the entire article and when the term is
immediately preceded by a designation of the karat fineness of the
plating which is of equal conspicuousness as the term used (for
example, ``14 Karat Gold Filled,'' ``14 Kt. Gold Filled,'' ``14 Kt.
G.F.,'' ``14 Kt. Gold Overlay,'' or ``14K. R.G.P.''). The exact
thickness of the plate may be marked on the item, if it is immediately
followed by a designation of the karat fineness of the plating, which
is of equal conspicuousness as the term used (as, for example, ``4.3
microns 12 K gold overlay'' or ``4.3 [mu] 14 Kt. G.F.'' for items
plated with 4.3 microns of 12 karat and 14 karat gold, respectively).

Note to paragraph (c)(2): If an industry product has a thicker
coating of gold or gold alloy on some areas than others, the minimum
thickness of the plate should be marked. When conforming to all such
requirements except the specified minimum of 1/20th of the weight of
the metal in the entire article, the terms ``Gold Overlay,'' ``Gold
Plate,'' ``Gold Plated,'' and ``Rolled Gold Plate'' may be used when
the karat fineness designation is immediately preceded by a fraction
accurately disclosing the portion of the weight of the metal in the
entire article accounted for by the plating, and when such fraction
is of equal conspicuousness as the term used (for example, ``1/40th
12 Kt. Rolled Gold Plate'' or ``1/40 12 Kt. R.G.P.'').

(3) An industry product or part thereof on which there has been
affixed on all significant surfaces by an electrolytic process an
electroplating of gold or gold alloy of not less than 22 karats that is
15 millionths of an inch (approximately 0.381 microns) may be marked or
described as ``Gold Plate,'' ``Gold Plated,'' ``Gold Electroplate'' or
``Gold Electroplated,'' or abbreviated, as, for example, ``G.E.P.''
When the electroplating meets the minimum fineness but not the minimum
thickness specified above, the marking or description may be ``Gold
Flashed'' or ``Gold Washed.'' An industry product or part thereof on
which there has been affixed on all significant surfaces by an
electrolytic process an electroplating of gold or gold alloy of not
less than 22 karats that is 100 millionths of an inch (approximately
2.54 microns) may be marked or described as ``Heavy Gold Electroplate''
or ``Heavy Gold Electroplated.'' When electroplatings qualify for the
term ``Gold Electroplate'' (or ``Gold Electroplated''), or the term
``Heavy Gold Electroplate'' (or ``Heavy Gold Electroplated''), and have
been applied by use of a particular kind of electrolytic process, the
marking may be accompanied by identification of the process used, as
for example, ``Gold Electroplated (X Process)'' or ``Heavy Gold
Electroplated (Y Process).'' The exact thickness of the plate may be
marked on the item, if it is immediately followed by a designation of
the karat fineness of the plating, which is of equal conspicuousness as
the term used (as, for example, ``0.381 microns 22 K gold
electroplate'' for an item plated with 0.381 microns of 22 karat gold
or ``2.54

[[Page 1354]]

[mu] 22 K. heavy gold electroplated'' for an item plated with 2.54
microns of 22 karat gold).

Note to paragraph (c)(3): If an industry product has a thicker
electroplating of gold or gold alloy on some areas than others, the
minimum thickness of the plate should be marked.

(d) The provisions of this section relating to markings and
descriptions of industry products and parts thereof are subject to the
applicable tolerances of the National Stamping Act or any amendment
thereof.\3\
---------------------------------------------------------------------------

\3\ Under the National Stamping Act, articles or parts made of
gold or of gold alloy that contain no solder have a permissible
tolerance of three parts per thousand. If the part tested contains
solder, the permissible tolerance is seven parts per thousand. For
full text, see 15 U.S.C. 295, et seq.

Note to paragraph (d): Exemptions recognized in the assay of
karat gold industry products and in the assay of gold filled, gold
overlay, and rolled gold plate industry products, and not to be
---------------------------------------------------------------------------
considered in any assay for quality, are listed in the appendix.

Sec. 23.4 Misuse of the word ``vermeil.''

(a) It is unfair or deceptive to represent, directly or by
implication, that an industry product is ``vermeil'' if such mark or
description misrepresents the product's true composition.
(b) An industry product may be described or marked as ``vermeil''
if it consists of a base of sterling silver coated or plated on all
significant surfaces with gold or gold alloy of not less than 22 karat
fineness and a minimum thickness throughout of 100 millionths of an
inch (approximately 2.54 microns).

Note 1 to Sec. 23.4: It is unfair or deceptive to use the term
``vermeil'' to describe a product in which the sterling silver has
been covered with a base metal (such as nickel) plated with gold
unless there is a disclosure that the sterling silver is covered
with a base metal that is plated with gold.

Note 2 to Sec. 23.4: Exemptions recognized in the assay of gold
filled, gold overlay, and rolled gold plate industry products are
listed in the appendix.

Sec. 23.5 Misrepresentation as to silver content.

(a) It is unfair or deceptive to misrepresent that an industry
product contains silver, or to misrepresent a product's silver content,
plating, electroplating, or coating.
(b) The following are examples of markings or descriptions that may
be misleading:
(1) Use of the words ``silver,'' ``solid silver,'' ``Sterling
Silver,'' ``Sterling,'' or the abbreviation ``Ster.'' to describe all
or part of an industry product unless it is at least 925/1,000ths pure
silver.
(2) Use of the words ``coin'' or ``coin silver'' to describe all or
part of an industry product unless it is at least 900/1,000ths pure
silver.

Note to paragraphs 5(b)(1) and (2): A marketer may mark,
describe, or otherwise represent all or part an industry product as
silver even when it is not at least 925/1,000ths pure silver if the
marketer has competent and reliable scientific evidence that such
product does not differ materially from a product that is at least
925/1,000ths pure silver with respect to the following attributes or
properties: Corrosion resistance, tarnish resistance, and any other
attribute or property material to consumers. In those circumstances,
a correct designation of the purity of the alloy should immediately
precede the word ``silver'' or its abbreviation, and such
designation should be of at least equal conspicuousness. If the
marketer lacks such evidence, in addition to disclosing the purity
of the alloy, it should also disclose that the product may not have
the same attributes or properties as products that contain at least
925/1,000ths. The terms ``solid silver,'' ``sterling silver,''
``sterling,'' and the abbreviation ``Ster.'' should not be used to
mark or describe such products that are not at least 925/1,000ths
pure silver. Consistent with Sec. 23.6(b)(2), marketers may use the
terms ``coin'' or ``coin silver'' only if the product is at least
900/1,000ths pure silver.

(3) Use of the word ``silver'' or any abbreviation to describe all
or part of a product that is not composed throughout of silver, but has
a surface layer or coating of silver, unless the word ``silver'' or its
abbreviation is adequately qualified to indicate that the product or
part is only coated.
(4) Marking, describing, or otherwise representing all or part of
an industry product as being plated or coated with silver unless all
significant surfaces of the product or part contain a plating or
coating of silver that is of reasonable durability.\4\
---------------------------------------------------------------------------

\4\ See footnote 2.
---------------------------------------------------------------------------

(c) The provisions of this section relating to markings and
descriptions of industry products and parts thereof are subject to the
applicable tolerances of the National Stamping Act or any amendment
thereof.\5\
---------------------------------------------------------------------------

\5\ Under the National Stamping Act, sterling silver articles or
parts that contain no solder have a permissible tolerance of four
parts per thousand. If the part tested contains solder, the
permissible tolerance is ten parts per thousand. For full text, see
15 U.S.C. 294, et seq.

Note 1 to Sec. 23.5: The National Stamping Act provides that
silver-plated articles shall not ``be stamped, branded, engraved or
imprinted with the word `sterling' or the word `coin,' either alone
---------------------------------------------------------------------------
or in conjunction with other words or marks.'' 15 U.S.C. 297(a).

Note 2 to Sec. 23.5: Exemptions recognized in the assay of
silver industry products are listed in the appendix.

Sec. 23.6 Misuse of the words ``platinum,'' ``iridium,''
``palladium,'' ``ruthenium,'' ``rhodium,'' and ``osmium.''

(a) It is unfair or deceptive to use the words ``platinum,''
``iridium,'' ``palladium,'' ``ruthenium,'' ``rhodium,'' and ``osmium,''
or any abbreviation to mark or describe all or part of an industry
product if such marking or description misrepresents the product's true
composition. The Platinum Group Metals (PGM) are Platinum, Iridium,
Palladium, Ruthenium, Rhodium, and Osmium.
(b) The following are examples of markings or descriptions that may
be misleading: \6\
---------------------------------------------------------------------------

\6\ See paragraph (c) of this section for examples of acceptable
markings and descriptions.
---------------------------------------------------------------------------

(1) Use of the word ``Platinum'' or any abbreviation to describe
all or part of a product that is not composed throughout of platinum,
but has a surface layer or coating of platinum, unless the word
``Platinum'' or its abbreviation is adequately qualified to indicate
that the product or part is only coated.
(2) Use of the word ``Platinum'' or any abbreviation, without
qualification, to describe all or part of an industry product that is
not composed throughout of 950 parts per thousand pure Platinum.
(3) Use of the word ``Platinum'' or any abbreviation accompanied by
a number indicating the parts per thousand of pure Platinum contained
in the product without mention of the number of parts per thousand of
other PGM contained in the product, to describe all or part of an
industry product that is not composed throughout of at least 850 parts
per thousand pure platinum, for example, ``600Plat.''
(4) Use of the word ``Platinum'' or any abbreviation thereof, to
mark or describe any product that is not composed throughout of at
least 500 parts per thousand pure Platinum.
(5) Use of the word ``Platinum,'' or any abbreviation accompanied
by a number or percentage indicating the parts per thousand of pure
Platinum contained in the product, to describe all or part of an
industry product that contains at least 500 parts per thousand, but
less than 850 parts per thousand, pure Platinum, and does not contain
at least 950 parts per thousand PGM (for example, ``585 Plat.'')
without a clear and conspicuous disclosure, immediately following the
name or description of such product:
(i) Of the full composition of the product (by name and not
abbreviation) and percentage of each metal; and

[[Page 1355]]

(ii) That the product may not have the same attributes or
properties as traditional platinum products. Provided, however, that
the marketer need not make disclosure under Sec. 23.7(b)(5)(ii), if
the marketer has competent and reliable scientific evidence that such
product does not differ materially from a product containing at least
850 parts per thousand pure Platinum with respect to the following
attributes or properties: Durability, luster, density, scratch
resistance, tarnish resistance, hypo-allergenicity, ability to be
resized or repaired, retention of precious metal over time, and any
other attribute or property material to consumers.

Note to paragraph (b)(5): When using percentages to qualify
platinum representations, marketers should convert the amount in
parts per thousand to a percentage that is accurate to the first
decimal place (e.g., 58.5% Platinum, 41.5% Cobalt).

(c) The following are examples of markings and descriptions that
are not considered unfair or deceptive:
(1) The following abbreviations for each of the PGM may be used for
quality marks on articles: ``Plat.'' or ``Pt.'' for Platinum; ``Irid.''
or ``Ir.'' for Iridium; ``Pall.'' or ``Pd.'' for Palladium; ``Ruth.''
or ``Ru.'' for Ruthenium; ``Rhod.'' or ``Rh.'' for Rhodium; and
``Osmi.'' or ``Os.'' for Osmium.
(2) An industry product consisting of at least 950 parts per
thousand pure Platinum may be marked or described as ``Platinum.''
(3) An industry product consisting of 850 parts per thousand pure
Platinum, 900 parts per thousand pure Platinum, or 950 parts per
thousand pure Platinum may be marked ``Platinum,'' provided that the
Platinum marking is preceded by a number indicating the amount in parts
per thousand of pure Platinum (for industry products consisting of 950
parts per thousand pure Platinum, the marking described in Sec.
23.7(b) (2) above is also appropriate). Thus, the following markings
may be used: ``950Pt.,'' ``950Plat.,'' ``900Pt.,'' ``900Plat.,''
``850Pt.,'' or ``850Plat.''
(4) An industry product consisting of at least 950 parts per
thousand PGM, and of at least 500 parts per thousand pure Platinum, may
be marked ``Platinum,'' provided that the mark of each PGM constituent
is preceded by a number indicating the amount in parts per thousand of
each PGM, as for example, ``600Pt.350Ir.,'' ``600Plat.350Irid.,''
``550Pt.350Pd.50Ir.,'' or ``550Plat.350Pall.50Irid.''
(5) An industry product consisting of at least 500 parts per
thousand, but less than 850 parts per thousand, pure Platinum, and not
consisting of at least 950 parts per thousand PGM, may be marked
accurately, with a quality marking on the article, using parts per
thousand and standard chemical abbreviations (e.g., 585 Pt., 415 Co.).

Note to Sec. 23.6: Exemptions recognized in the assay of
platinum industry products are listed in appendix A of this part.

Sec. 23.7 Disclosure of surface-layer of application of rhodium.

It is unfair or deceptive to fail to disclose a surface-layer
application of rhodium on products marked or described as precious
metal.

Sec. 23.8 Misrepresentation as to products containing more than one
precious metal.

(a) It is unfair or deceptive to misrepresent the relative quantity
of each precious metal in a product that contains more than than one
precious metal. Marketers should list precious metals in the order of
their relative weight in the product from greatest to least (i.e.,
leading with the predominant metal). Listing precious metals in order
of relative weight is not necessary where it is clear to reasonable
consumers from context that the metal listed first is not predominant.
(b) The following are examples of markings or descriptions that may
be misleading:
(1) Use of the terms ``Platinum + Silver'' to describe a product
that contains more silver than platinum by weight.
(2) Use of the terms ``14K/Sterling'' to describe a product that
contains more silver than gold by weight.
(c) The following are examples of markings and descriptions that
are not considered unfair or deceptive:
(1) For a product comprised primarily of silver with a surface-
layer application of platinum, ``900 platinum over silver.''
(2) For a product comprised primarily of silver with visually
distinguishable parts of gold, ``14k gold-accented silver.''
(3) For a product comprised primarily of gold with visually
distinguishable parts of platinum, ``850 Platinum inset, 14K gold
ring.''

Sec. 23.9 Misrepresentation as to content of pewter.

(a) It is unfair or deceptive to mark, describe, or otherwise
represent all or part of an industry product as ``Pewter'' or any
abbreviation if such mark or description misrepresents the product's
true composition.
(b) An industry product or part thereof may be described or marked
as ``Pewter'' or any abbreviation if it consists of at least 900 parts
per 1000 Grade A Tin, with the remainder composed of metals appropriate
for use in pewter.

Sec. 23.10 Additional guidance for the use of quality marks.

As used in these guides, the term quality mark means any letter,
figure, numeral, symbol, sign, word, or term, or any combination
thereof, that has been stamped, embossed, inscribed, or otherwise
placed on any industry product and which indicates or suggests that any
such product is composed throughout of any precious metal or any
precious metal alloy or has a surface or surfaces on which there has
been plated or deposited any precious metal or precious metal alloy.
Included are the words ``gold,'' ``karat,'' ``carat,'' ``silver,''
``sterling,'' ``vermeil,'' ``platinum,'' ``iridium,'' ``palladium,''
``ruthenium,'' ``rhodium,'' or ``osmium,'' or any abbreviations
thereof, whether used alone or in conjunction with the words
``filled,'' ``plated, ``overlay,'' or ``electroplated,'' or any
abbreviations thereof. Quality markings include those in which the
words or terms ``gold,'' ``karat,'' ``silver,'' ``vermeil,''
``platinum'' (or platinum group metals), or their abbreviations are
included, either separately or as suffixes, prefixes, or syllables.
(a) Deception as to applicability of marks.
(1) If a quality mark on an industry product is applicable to only
part of the product, the part of the product to which it is applicable
(or inapplicable) should be disclosed when, absent such disclosure, the
location of the mark misrepresents the product or part's true
composition.
(2) If a quality mark is applicable to only part of an industry
product, but not another part, which is of similar surface appearance,
each quality mark should be closely accompanied by an identification of
the part or parts to which the mark is applicable.
(b) Deception by reason of difference in the size of letters or
words in a marking or markings. It is unfair or deceptive to place a
quality mark on a product in which the words or letters appear in
greater size than other words or letters of the mark, or when different
markings placed on the product have different applications and are in
different sizes, when the net impression of any such marking would be
misleading as to the metallic composition of all or part of the
product. (An example of improper marking would be the marking of a gold
electroplated product with the word ``electroplate'' in small type and
the word ``gold'' in larger type, with the result that purchasers and
prospective

[[Page 1356]]

purchasers of the product might only observe the word ``gold.'')

Note 1 to Sec. 23.10: Legibility of markings. If a quality
mark is engraved or stamped on an industry product, or is printed on
a tag or label attached to the product, the quality mark should be
of sufficient size type as to be legible to persons of normal
vision, should be so placed as likely to be observed by purchasers,
and should be so attached as to remain thereon until consumer
purchase.

Note 2 to Sec. 23.10: Disclosure of identity of manufacturers,
processors, or distributors. The National Stamping Act provides that
any person, firm, corporation, or association, being a manufacturer
or dealer subject to section 294 of the Act, who applies or causes
to be applied a quality mark, or imports any article bearing a
quality mark ``which indicates or purports to indicate that such
article is made in whole or in part of gold or silver or of an alloy
of either metal'' shall apply to the article the trademark or name
of such person. 15 U.S.C. 297.

Sec. 23.11 Misuse of ``corrosion proof,'' ``noncorrosive,''
``corrosion resistant,'' ``rust proof,'' ``rust resistant,'' etc.

(a) It is unfair or deceptive to:
(1) Use the terms ``corrosion proof,'' ``noncorrosive,'' ``rust
proof,'' or any other term of similar meaning to describe an industry
product unless all parts of the product will be immune from rust and
other forms of corrosion during the life expectancy of the product; or
(2) Use the terms ``corrosion resistant,'' ``rust resistant,'' or
any other term of similar meaning to describe an industry product
unless all parts of the product are of such composition as to not be
subject to material damage by corrosion or rust during the major
portion of the life expectancy of the product under normal conditions
of use.
(b) Among the metals that may be considered as corrosion (and rust)
resistant are: Pure nickel; Gold alloys of not less than 10 Kt.
fineness; and Austenitic stainless steels.

Sec. 23.12 Definition and misuse of the word ``diamond.''

(a) A diamond is a natural mineral consisting essentially of pure
carbon crystallized in the isometric system. It is found in many
colors. Its hardness is 10; its specific gravity is approximately 3.52;
and it has a refractive index of 2.42.
(b) It is unfair or deceptive to use the unqualified word
``diamond'' to describe or identify any object or product not meeting
the requirements specified in the definition of diamond provided above,
or which, though meeting such requirements, has not been symmetrically
fashioned with at least seventeen (17) polished facets.

Note to paragraph (b): It is unfair or deceptive to represent,
directly or by implication, that industrial grade diamonds or other
non-jewelry quality diamonds are of jewelry quality.

(c) The following are examples of descriptions that are not
considered unfair or deceptive:
(1) The use of the words ``rough diamond'' to describe or designate
uncut or unfaceted objects or products satisfying the definition of
diamond provided above; or
(2) The use of the word ``diamond'' to describe or designate
objects or products satisfying the definition of diamond but which have
not been symmetrically fashioned with at least seventeen (17) polished
facets when in immediate conjunction with the word ``diamond'' there is
either a disclosure of the number of facets and shape of the diamond or
the name of a type of diamond that denotes shape and that usually has
less than seventeen (17) facets (e.g., ``rose diamond'').
(3) The use of the word ``cultured'' to describe laboratory-created
diamonds if the term is immediately accompanied, with equal
conspicuousness, by the words ``laboratory-created,'' ``laboratory-
grown,'' ``[manufacturer name]-created,'' ``synthetic,'' or by some
other word or phrase of like meaning, so as to clearly disclose that it
is a laboratory-created product.

Note to paragraph (c): Additional guidance about imitation and
laboratory-created diamond representations and misuse of words
``gem,'' ``real,'' ``genuine,'' ``natural,'' etc., are set forth in
Sec. Sec. 23.24 and 23.25.

Sec. 23.13 Misuse of the words ``flawless,'' ``perfect,'' etc.

(a) It is unfair or deceptive to use the word ``flawless'' to
describe any diamond that discloses flaws, cracks, inclusions, carbon
spots, clouds, internal lasering, or other blemishes or imperfections
of any sort when examined under a corrected magnifier at 10-power, with
adequate illumination, by a person skilled in diamond grading.
(b) It is unfair or deceptive to use the word ``perfect,'' or any
representation of similar meaning, to describe any diamond unless the
diamond meets the definition of ``flawless'' and is not of inferior
color or make.
(c) It is unfair or deceptive to use the words ``flawless'' or
``perfect'' to describe a ring or other article of jewelry having a
``flawless'' or ``perfect'' principal diamond or diamonds, and
supplementary stones that are not of such quality, unless there is a
disclosure that the description applies only to the principal diamond
or diamonds.

Sec. 23.14 Disclosure of treatments to diamonds.

A diamond is a gemstone product. Treatments to diamonds should be
disclosed in the manner prescribed in Sec. 23.24 of these guides,
Disclosure of treatments to gemstones.

Sec. 23.15 Misuse of the term ``blue white.''

It is unfair or deceptive to use the term ``blue white'' or any
representation of similar meaning to describe any diamond that under
normal, north daylight or its equivalent shows any color or any trace
of any color other than blue or bluish.

Sec. 23.16 Misuse of the term ``properly cut,'' etc.

It is unfair or deceptive to use the terms ``properly cut,''
``proper cut,'' ``modern cut,'' or any representation of similar
meaning to describe any diamond that is lopsided, or is so thick or so
thin in depth as to detract materially from the brilliance of the
stone.

Note to Sec. 23.16: Stones that are commonly called ``fisheye''
or ``old mine'' should not be described as ``properly cut,''
``modern cut,'' etc.

Sec. 23.17 Misuse of the words ``brilliant'' and ``full cut.''

It is unfair or deceptive to use the unqualified expressions
``brilliant,'' ``brilliant cut,'' or ``full cut'' to describe,
identify, or refer to any diamond except a round diamond that has at
least thirty-two (32) facets plus the table above the girdle and at
least twenty-four (24) facets below.

Note to Sec. 23.17: Such terms should not be applied to single
or rose-cut diamonds. They may be applied to emerald-(rectangular)
cut, pear-shaped, heart-shaped, oval-shaped, and marquise-(pointed
oval) cut diamonds meeting the above-stated facet requirements when,
in immediate conjunction with the term used, the form of the diamond
is disclosed.

Sec. 23.18 Misrepresentation of weight and ``total weight.''

(a) It is unfair or deceptive to misrepresent the weight of a
diamond.
(b) It is unfair or deceptive to use the word ``point'' or any
abbreviation in any representation, advertising, marking, or labeling
to describe the weight of a diamond, unless the weight is also stated
as decimal parts of a carat (e.g., 25 points or .25 carat).

Note to paragraph (b): A carat is a standard unit of weight for
a diamond and is equivalent to 200 milligrams (\1/5\ gram). A point
is one one hundredth (\1/100\) of a carat.

[[Page 1357]]

the stated figure should be accurate to the last decimal place. If
diamond weight is stated to only one decimal place (e.g., .5 carat),
the stated figure should be accurate to the second decimal place (e.g.,
``.5 carat'' could represent a diamond weight between .495-.504).
(d) If diamond weight is stated as fractional parts of a carat, a
conspicuous disclosure of the fact that the diamond weight is not exact
should be made in close proximity to the fractional representation and
a disclosure of a reasonable range of weight for each fraction (or the
weight tolerance being used) should also be made.

Note to paragraph (d): When fractional representations of
diamond weight are made, as described in paragraph (d) of this
section, in catalogs or other printed materials, the disclosure of
the fact that the actual diamond weight is within a specified range
should be made conspicuously on every page where a fractional
representation is made. Such disclosure may refer to a chart or
other detailed explanation of the actual ranges used. For example,
``Diamond weights are not exact; see chart on p.X for ranges.''

Sec. 23.19 Definitions of various pearls.

As used in these guides, the terms set forth below have the
following meanings:
(a) Pearl: A calcareous concretion consisting essentially of
alternating concentric layers of carbonate of lime and organic material
formed within the body of certain mollusks, the result of an abnormal
secretory process caused by an irritation of the mantle of the mollusk
following the intrusion of some foreign body inside the shell of the
mollusk, or due to some abnormal physiological condition in the
mollusk, neither of which has in any way been caused or induced by
humans.
(b) Cultured pearl: The composite product created when a nucleus
(usually a sphere of calcareous mollusk shell) planted by humans inside
the shell or in the mantle of a mollusk is coated with nacre by the
mollusk.
(c) Imitation pearl: A manufactured product composed of any
material or materials that simulate in appearance a pearl or cultured
pearl.
(d) Seed pearl: A small pearl, as defined in (a), that measures
approximately two millimeters or less.

Sec. 23.20 Misuse of the word ``pearl.''

(a) It is unfair or deceptive to use the unqualified word ``pearl''
or any other word or phrase of like meaning to describe, identify, or
refer to any object or product that is not in fact a pearl, as defined
in Sec. 23.19(a).
(b) It is unfair or deceptive to use the word ``pearl'' to
describe, identify, or refer to a cultured pearl unless it is
immediately preceded, with equal conspicuousness, by the word
``cultured'' or ``cultivated,'' or by some other word or phrase of like
meaning, so as to indicate definitely and clearly that the product is
not a pearl.
(c) It is unfair or deceptive to use the word ``pearl'' to
describe, identify, or refer to an imitation pearl unless it is
immediately preceded, with equal conspicuousness, by the word
``artificial,'' ``imitation,'' or ``simulated,'' or by some other word
or phrase of like meaning, so as to indicate definitely and clearly
that the product is not a pearl.
(d) It is unfair or deceptive to use the terms ``faux pearl,''
``fashion pearl,'' ``Mother of Pearl,'' or any other such term to
describe or qualify an imitation pearl product unless it is immediately
preceded, with equal conspicuousness, by the word ``artificial,''
``imitation,'' or ``simulated,'' or by some other word or phrase of
like meaning, so as to indicate definitely and clearly that the product
is not a pearl.

Sec. 23.21 Misuse of terms such as ``cultured pearl,'' ``seed
pearl,'' ``Oriental pearl,'' ``natura,'' ``kultured,'' ``real,''
``synthetic,'' and regional designations.

(a) It is unfair or deceptive to use the term ``cultured pearl,''
``cultivated pearl,'' or any other word, term, or phrase of like
meaning to describe, identify, or refer to any imitation pearl.
(b) It is unfair or deceptive to use the term ``seed pearl'' or any
word, term, or phrase of like meaning to describe, identify, or refer
to a cultured or an imitation pearl, without using the appropriate
qualifying term ``cultured'' (e.g., ``cultured seed pearl'') or
``simulated,'' ``artificial,'' or ``imitation'' (e.g., ``imitation seed
pearl'').
(c) It is unfair or deceptive to use the term ``Oriental pearl'' or
any word, term, or phrase of like meaning to describe, identify, or
refer to any industry product other than a pearl taken from a salt
water mollusk and of the distinctive appearance and type of pearls
obtained from mollusks inhabiting the Persian Gulf and recognized in
the jewelry trade as Oriental pearls.
(d) It is unfair or deceptive to use the word ``Oriental'' to
describe, identify, or refer to any cultured or imitation pearl.
(e) It is unfair or deceptive to use the word ``natura,''
``natural,'' ``nature's,'' or any word, term, or phrase of like meaning
to describe, identify, or refer to a cultured or imitation pearl. It is
unfair or deceptive to use the term ``organic'' to describe, identify,
or refer to an imitation pearl, unless the term is qualified in such a
way as to make clear that the product is not a natural or cultured
pearl.
(f) It is unfair or deceptive to use the term ``kultured,'' ``semi-
cultured pearl,'' ``cultured-like,'' ``part-cultured,'' ``premature
cultured pearl,'' or any word, term, or phrase of like meaning to
describe, identify, or refer to an imitation pearl.
(g) It is unfair or deceptive to use the term ``South Sea pearl''
unless it describes, identifies, or refers to a pearl that is taken
from a salt water mollusk of the Pacific Ocean South Sea Islands,
Australia, or Southeast Asia. It is unfair or deceptive to use the term
``South Sea cultured pearl'' unless it describes, identifies, or refers
to a cultured pearl formed in a salt water mollusk of the Pacific Ocean
South Sea Islands, Australia, or Southeast Asia.
(h) It is unfair or deceptive to use the term ``Biwa cultured
pearl'' unless it describes, identifies, or refers to cultured pearls
grown in fresh water mollusks in the lakes and rivers of Japan.
(i) It is unfair or deceptive to use the word ``real,''
``genuine,'' ``precious,'' or any word, term, or phrase of like meaning
to describe, identify, or refer to any imitation pearl.
(j) It is unfair or deceptive to use the word ``synthetic'' or
similar terms to describe cultured or imitation pearls.
(k) It is unfair or deceptive to use the terms ``Japanese Pearls,''
``Chinese Pearls,'' ``Mallorca Pearls,'' or any regional designation to
describe, identify, or refer to any cultured or imitation pearl, unless
the term is immediately preceded, with equal conspicuousness, by the
word ``cultured,'' ``artificial,'' ``imitation,'' or ``simulated,'' or
by some other word or phrase of like meaning, so as to indicate
definitely and clearly that the product is a cultured or imitation
pearl.

Sec. 23.22 Misrepresentation as to cultured pearls.

It is unfair or deceptive to misrepresent the manner in which
cultured pearls are produced, the size of the nucleus artificially
inserted in the mollusk and included in cultured pearls, the length of
time that such products remained in the mollusk, the thickness of the
nacre coating, the value and quality of cultured pearls as compared
with the value and quality of pearls and imitation pearls, or any other
material matter relating to the formation, structure, properties,
characteristics, and qualities of cultured pearls.

[[Page 1358]]

Sec. 23.23 Disclosure of treatments to pearls and cultured pearls.

It is unfair or deceptive to fail to disclose that a pearl or
cultured pearl has been treated if:
(a) The treatment is not permanent. The seller should disclose that
the pearl or cultured pearl has been treated and that the treatment is
or may not be permanent;
(b) The treatment creates special care requirements for the pearl
or cultured pearl. The seller should disclose that the pearl or
cultured pearl has been treated and has special care requirements. It
is also recommended that the seller disclose the special care
requirements to the purchaser;
(c) The treatment has a significant effect on the product's value.
The seller should disclose that the pearl or cultured pearl has been
treated.

Note to Sec. 23.23: The disclosures outlined in this section
are applicable to sellers at every level of trade, as defined in
Sec. 23.0(b) of these Guides, and they may be made at the point of
sale prior to sale, except that where a product can be purchased
without personally viewing the product (e.g., direct mail catalogs,
online services, televised shopping programs), disclosure should be
made in the solicitation for, or description of, the product.

Sec. 23.24 Disclosure of treatments to gemstones.

It is unfair or deceptive to fail to disclose that a gemstone has
been treated if:
(a) The treatment is not permanent. The seller should disclose that
the gemstone has been treated and that the treatment is or may not be
permanent;
(b) The treatment creates special care requirements for the
gemstone. The seller should disclose that the gemstone has been treated
and has special care requirements. It is also recommended that the
seller disclose the special care requirements to the purchaser;
(c) The treatment has a significant effect on the stone's value.
The seller should disclose that the gemstone has been treated.

Note to Sec. 23.24: The disclosures outlined in this section
are applicable to sellers at every level of trade, as defined in
Sec. 23.0(b) of these Guides, and they may be made at the point of
sale prior to sale; except that where a product can be purchased
without personally viewing the product (e.g., direct mail catalogs,
online services, televised shopping programs), disclosure should be
made in the solicitation for, or description of, the product.

[65 FR 78743, Dec. 15, 2000]

Sec. 23.25 Misuse of the words ``ruby,'' ``sapphire,'' ``emerald,''
``topaz,'' ``stone,'' ``birthstone,'' ``gem,'' ``gemstone,'' etc.

(a) It is unfair or deceptive to use the unqualified words
``ruby,'' ``sapphire,'' ``emerald,'' ``topaz,'' or the name of any
other precious or semi-precious stone to describe any product that is
not in fact a natural stone of the type described.
(b) It is unfair or deceptive to use the word ``ruby,''
``sapphire,'' ``emerald,'' ``topaz,'' or the name of any other precious
or semi-precious stone, or the word ``stone,'' ``birthstone,'' ``gem,''
``gemstone,'' or similar term to describe a laboratory-grown,
laboratory-created, [manufacturer name]-created, synthetic, imitation,
or simulated stone, unless such word or name is immediately preceded
with equal conspicuousness by the word ``laboratory-grown,''
``laboratory-created,'' ``[manufacturer name]-created,'' ``synthetic,''
or by the word ``imitation'' or ``simulated,'' so as to disclose
clearly the nature of the product and the fact it is not a natural
gemstone.

Note to paragraph (b): The use of the word ``faux'' to describe
a laboratory-created or imitation stone is not an adequate
disclosure that the stone is not natural.

(c) It is unfair or deceptive to use the word ``laboratory-grown,''
``laboratory- created,'' ``[manufacturer name]-created,'' or
``synthetic'' with the name of any natural stone to describe any
industry product unless such industry product has essentially the same
optical, physical, and chemical properties as the stone named.

Note to Sec. 23.25: It would be unfair or deceptive to describe
products filled with a substantial quantity of lead glass in the
following way:
(1) With the unqualified word ``ruby,'' ``sapphire,''
``emerald,'' ``topaz,'' or name of any other precious or semi-
precious stone;
(2) As a ``treated ruby'' or other ``treated'' precious or semi-
precious stone;
(3) As a ``laboratory-grown,'' ``laboratory-created,''
``[manufacturer name]-created,'' or ``synthetic'' ``ruby'' or other
natural stone;
(4) As a ``composite ruby'' or other ``composite'' precious or
semi-precious stone without qualification;
(5) As a ``hybrid ruby'' or other ``hybrid'' precious or semi-
precious stone without qualification; or
(6) As a ``manufactured ruby'' or other ``manufactured''
precious or semi-precious stone without qualification.
The following are examples of descriptions for such products
that are not considered deceptive:
(1) use of the terms ``lead-glass filled corundum'' or ``lead-
glass filled composite corundum'' to describe a product made with
low-grade corundum (not ruby) that is infused with lead glass;
(2) use of the terms ``lead-glass-filled ruby'' or ``lead-glass-
filled composite ruby'' to describe a product made with ruby that is
infused with lead glass.

Sec. 23.26 Misuse of the words ``real,'' ``genuine,'' ``natural,''
``precious,'' etc.

It is unfair or deceptive to use the word ``real,'' ``genuine,''
``natural,'' ``precious,'' ``semi-precious,'' or similar terms to
describe any industry product that is manufactured or produced
artificially.

Sec. 23.27 Misrepresentation as to varietal name.

(a) It is unfair or deceptive to mark or describe an industry
product with the incorrect varietal name.
(b) The following are examples of marking or descriptions that may
be misleading:
(1) Use of the term ``yellow emerald'' to describe golden beryl or
heliodor.
(2) Use of the term ``green amethyst'' to describe prasiolite.

Note to Sec. 23.27: A varietal name is given for a division of
gem species or genus based on a color, type of optical phenomenon,
or other distinguishing characteristic of appearance.

Sec. 23.28 Misuse of the words ``flawless,'' ``perfect,'' etc.

(a) It is unfair or deceptive to use the word ``flawless'' as a
quality description of any gemstone that discloses blemishes,
inclusions, or clarity faults of any sort when examined under a
corrected magnifier at 10-power, with adequate illumination, by a
person skilled in gemstone grading.
(b) It is unfair or deceptive to use the word ``perfect'' or any
representation of similar meaning to describe any gemstone unless the
gemstone meets the definition of ``flawless'' and is not of inferior
color or make.
(c) It is unfair or deceptive to use the word ``flawless,''
``perfect,'' or any representation of similar meaning to describe any
imitation gemstone.

Appendix to Part 23--Exemptions Recognized in the Assay for Quality ff
Gold Alloy, Gold Filled, Gold Overlay, Rolled Gold Plate, Silver, and
Platinum Industry Products

(a) Exemptions recognized in the industry and not to be
considered in any assay for quality of a karat gold industry product
include springs, posts, and separable backs of lapel buttons, posts
and nuts for attaching interchangeable ornaments, metallic parts
completely and permanently encased in a nonmetallic covering, field
pieces and bezels for lockets,\7\ and wire pegs or rivets used for

[[Page 1359]]

applying mountings and other ornaments, which mountings or ornaments
shall be of the quality marked.
---------------------------------------------------------------------------

\7\ Field pieces of lockets are those inner portions used as
frames between the inside edges of the locket and the spaces for
holding pictures. Bezels are the separable inner metal rings to hold
the pictures in place.

Note: Exemptions recognized in the industry and not to be
considered in any assay for quality of a karat gold optical product
include: the hinge assembly (barrel or other special types such as
are customarily used in plastic frames); washers, bushings, and nuts
of screw assemblies; dowels; springs for spring shoe straps; metal
parts permanently encased in a non-metallic covering; and for
---------------------------------------------------------------------------
oxfords,\8\ coil and joint springs.

\8\ Oxfords are a form of eyeglasses where a flat spring joins
the two eye rims and the tension it exerts on the nose serves to
hold the unit in place. Oxfords are also referred to as pince nez.
---------------------------------------------------------------------------

(b) Exemptions recognized in the industry and not to be
considered in any assay for quality of a gold filled, gold overlay
and rolled gold plate industry product, other than watchcases,
include joints, catches, screws, pin stems, pins of scarf pins, hat
pins, etc., field pieces and bezels for lockets, posts and separate
backs of lapel buttons, bracelet and necklace snap tongues, springs,
and metallic parts completely and permanently encased in a
nonmetallic covering.

Note: Exemptions recognized in the industry and not to be
considered in any assay for quality of a gold filled, gold overlay
and rolled gold plate optical product include: screws; the hinge
assembly (barrel or other special types such as are customarily used
in plastic frames); washers, bushings, tubes and nuts of screw
assemblies; dowels; pad inserts; springs for spring shoe straps,
cores and/or inner windings of comfort cable temples; metal parts
permanently encased in a nonmetallic covering; and for oxfords, the
handle and catch.

(c) Exemptions recognized in the industry and not to be
considered in any assay for quality of a silver industry product
include screws, rivets, springs, spring pins for wrist watch straps;
posts and separable backs of lapel buttons; wire pegs, posts, and
nuts used for applying mountings or other ornaments, which mountings
or ornaments shall be of the quality marked; pin stems (e.g., of
badges, brooches, emblem pins, hat pins, and scarf pins, etc.);
levers for belt buckles; blades and skeletons of pocket knives;
field pieces and bezels for lockets; bracelet and necklace snap
tongues; any other joints, catches, or screws; and metallic parts
completely and permanently encased in a nonmetallic covering.
(d) Exemptions recognized in the industry and not to be
considered in any assay for quality of an industry product of silver
in combination with gold include joints, catches, screws, pin stems,
pins of scarf pins, hat pins, etc., posts and separable backs of
lapel buttons, springs, and metallic parts completely and
permanently encased in a nonmetallic covering.
(e) Exemptions recognized in the industry and not to be
considered in any assay for quality of a platinum industry product
include springs, winding bars, sleeves, crown cores, mechanical
joint pins, screws, rivets, dust bands, detachable movement rims,
hat pin stems, and bracelet and necklace snap tongues. In addition,
the following exemptions are recognized for products marked in
accordance with Sec. 23.6(b)(5) of these Guides (i.e., products
that are less than 500 parts per thousand platinum): pin tongues,
joints, catches, lapel button backs and the posts to which they are
attached, scarf-pin stems, hat pin sockets, shirt-stud backs, vest-
button backs, and ear screw backs, provided such parts are made of
the same quality platinum as is used in the balance of the article.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-00107 Filed 1-11-16; 8:45 am]
BILLING CODE 6750-01-P