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Jewellery and Gemstone Industry

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Jewellery and gemstone industry is a one of the most ancient and widely spread handicrafts, which takes the worthy place in rich treasury of arts and crafts. In Armenia the basis of this branch development since ancient times have been underplayed. During the centuries Armenian professional jewellers have been creating works of art which are worth to have a high appreciation and till now have not lost their actuality. These generated traditions, the revealed jeweller secrets and skills passed from generation to generation during many years providing an economic growth and becoming a token for  jewellery and gemstone industry development.

History

Continuous development of jewellery and gemstone  branch was kept, and has been put on an effective basis during the years when Armenia was the part of the USSR. The newest technologies gradually replaced old methods on manufacture of jewels. Thus in 1951 the Yerevan jewellery factory which already in 1980s had 1300 workplaces and was annually delivering to the Soviet Union market 6,000 kg of jewellery production. Taking into consideration the generated traditions in the field of diamond business, in 1973 in the Nor-Hajn town within the structure of the manufacturing company "Sapphire", the shop for diamonds processing has been opened. The last became one of the seven largest plants for diamond processing working in the territory of the USSR, the annual production rate of which made 50 million rubles in 1986.

After the dissolution of the USSR a proceeding development of the jewellery and precious stones has not stopped. After declaration of independence of the Republic of Armenia and transition to free market economy, the state has gradually lost an available monopolistic role in branch. Jewellery business and processing of precious stones have turned into the one of quickly developing economy branch of Armenia which paved the way for foreign investments. Both the factor of precious stones and jewelry production culture availability and the generated system of traditions, enabled the competitive superiority in consideration to other states during privatization of the enterprises in this scope. Thus, as a result of privatization of the enterprises in this scope, such known firms as Israel “L.L.D. DIAMONDS, TASHE”, Belgian “ROSY BLUE”, Swiss “ATELIER FUER FEINE JUWELEN, FRANCK MULLER” which have powerful international reputation in the field of jewellery business, entered into the Republic. Improvement of models and design of products as a result of joint activity with the foreign companies, which is the most valuable element of export potential in the scope of jewellery business, were of great importance for support of economic growth in jewellery sphere. This is promoted by the organization of annual exhibitions in the Republic, and also their participation in international ones.

Dynamics of the branch development

The year 1998 may be considered to be the beginning of development of the branch when the production of Armenian enterprises was doubled and made 48.0 million US dollars whereas in 1997 it made all 23.8 million dollars. The dynamics of branch development during the next years made: 1999 - 89.0 million dollars, 2000 - 108.1 million dollars, 2001 - 99.6 million dollars, 2002 - more than 200.0 million dollars, 2003 - more than 250 million dollars, 2004 - 224 million dollars, practically all production was exported. During the same time the number of really active enterprises increased from 5 to 50, and the number of workplaces - from 1,300 to 5,000. Among those factors , which caused a growth in branch, it is necessary to note the privatization of the branch organizations, liberalization of branch, organization with foreign investors, relatively low-paid, but the qualitative labour, favourable tax field, etc. At present time the RA annually exports to world market jewellery and gems by the sum about 250 million US dollars; it is among the first ten diamond processing countries.

The Kimberley Process Certification Scheme

In the field of stable jewellery business development support the fact of joining of the RA to the Kimberley Process Certification Scheme has played an important role, thus Armenia has declared the readiness to carry out rough diamond trade only with the countries which are the Members of Kimberley process, the purpose of which is the prevention of an illegal turnover of conflict diamonds. For realization of this process the Decree of the United Nations N_56/263 accepted on March 13, 2002 is directed. As a Participant of Kimberley Process  Armenia has been carrying out the trade of diamond raw material only with Countries-Members of Kimberley Process since January 1, 2002, therefore any cargo of rough diamonds  should  have Kimberley Certification given by the exporting country irrespective of the fact whether it is imported in the country or is exported.

Tasks and prospects

“Medium term program on development in 2005-2007 in the scope of gems and jewels” adopted by the Government of the RA will play an important role for the further development of the branch; its basic purpose is the support of continuous progress of the branch achieved during the last years. Realization of the actions stipulated by the program, will enable to increase the production up to 500 million US dollars (400 million dollars for the branch of gems, 100 million dollars for the branch of jewels) to increase employment in branch up to 10.000 person, with the monthly average salary in 200 US dollars (for the branch of gems about 6000 person, for the branch of jewels about 4000 person).

Today the structural system regulating the revolution of ruogh diamonds and brilliants in Armenia cannot satisfy the present level of the branch development. For this purpose it is necessary to introduce the international successful experience, the research of which was carried out by the department of manufacture of gems and jewels of the Ministry of Trade and economic development of the RА. As a result of these researches it was found out, that in Armenia it is necessary to carry out both a number of legislative and organizational - structural actions. From the point of view of the most productive decision of this problem is the introduction of the new organizational - structural system in consideration with the local features which effectively function in Israel, Belgium, India etc.

From the organizational point of view in the near future it is necessary to create the specialized structure directed on coordination of the branch and close international integration which is purposed at the realization of the principle “the united center”. It assumes the drawing up of the offers on realization of  state policy in sphere of manufacture of gems and jewels, settlement of the problems connected to development, modernization, export and import of production, management, display of assistance in questions of practical activities on introduction of the newest equipment and technology, the organization of various activities and incentive actions,  consulting support, development of the laws on ethics of the master of jewellery, establishment of corresponding laws on  behavior and activity, settlement of co-relations between  private and state sectors. As for the settlement of revolution of rough diamonds and brilliants the creation of infrastructures is for great importance where the above-stated structure will have an essential place. Mainstreams of creation of such infrastructures should be the following:

  1. Establishment of the wholesale center for the raw material and the production
  2. Establishment of the gemological laboratories.
  3. Establishment of financial and insurance companies.
  4. Introduction of new directions of transport and communication.

Due to above named actions it is possible to improve the present situation for revolution of rough diamonds and brilliants in the RА and to approach it to international standards. Thus it will be possible to have an opportunity to present more civilized form of trade in rough diamonds and brilliants, to make more transparent financial transactions, to speed up the revolution of rough diamonds and brilliants as well as to raise transportation safety.

Legislation

  1. The Law of the Republic of Armenia from 30.05.2001 “On licensing”, LR-193, (it was amended by the Law of the Republic of Armenia from 25.05.2005 “On amendments in the Law of the Republic of Armenia "On licensing" ”, LR 127,)
  2. The Law of the Republic of Armenia from 27.12.1997 “On State Tax”, LR 186, (it was amended by the Law of the Republic of Armenia from 25.05.2005 “On amendments in the Law of the Republic of Armenia On State Tax”, LR 128,)
  3. The Decision of the Government of the Republic of Armenia N239-N from 27.03.2001 “On statement of the establishment of the minimum quantity of the expected result after the processing of the goods imported under the mode “Temporary import for processing” and on establishment of the minimum quantity of the expected result after processing the goods under the mode “Temporary export for processing”.
  4. The Decision of the Government of the Republic of Armenia from 19.12.2002 N2081-N “On connection of the Government of the Republic of Armenia to Kimberley Process”.
  5. The Decision of the Government of the Republic of Armenia from 23.04.2003 N505-N, “On actions which cause execution of the decision of the Government of the Republic of Armenia N2081-N”, (it is amended by the decision of the Government of the Republic of Armenia N212-N from 10.02.2005).
  6. The decision of the Government of the Republic of Armenia from 18.12.2003 N1794-N “On the statement of the intermediate term program on development of the branch of gems and jewels in 2005-2007”, (it is amended by the Decision of the Government of the Republic of Armenia N801-N from 09.06.2005).
  7. The decision of the Government of the Republic of Armenia from 25.07.2001 N669-N “On the List of precious and semiprecious stones which are released from payment of the VAT during the process of realization”.
  8. The agreement between the Government of the Republic of Armenia and the Government of the Russian Federation about the deliveries of the natural rough diamonds to the Republic of Armenia in 2002-2006, Moscow 05.04.2002.