[Federal Register Volume 83, Number 159 (Thursday, August 16, 2018)]
[Rules and Regulations]
[Pages 40665-40675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17454]



[[Page 40665]]

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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: Final rule; adoption of revised guides.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
adopts revised Guides for the Jewelry, Precious Metals, and Pewter 
Industries (``Jewelry Guides'' or ``Guides''). This document summarizes 
the Commission's revisions to the previous Guides and includes the 
final Guides as revised. Readers can find the Commission's complete 
analysis in the Statement of Basis and Purpose (``SBP'') on the FTC's 
website at https://www.ftc.gov/public-statements/2018/07/statement-basis-purpose-final-revisions-jewelry-guides.

DATES: Effective on August 16, 2018.

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: As part of its comprehensive review of the 
Jewelry Guides, the Commission reviewed public comments and the 
transcript of a public roundtable. The Commission developed its final 
guidance in accordance with Section 5 of the Federal Trade Commission 
Act (``FTC Act''), which prohibits deceptive or unfair acts or 
practices.\1\ The Guides focus on advising marketers how to make non-
deceptive claims about jewelry products, rather than preventing unfair 
practices.\2\ Under Section 5, an act or practice is deceptive if it 
involves a material statement or omission that would mislead a consumer 
acting reasonably under the circumstances.\3\
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    \1\ 15 U.S.C. 45.
    \2\ Although the Guides focus on deception, the FTC can also 
address unfair practices should the need arise.
    \3\ FTC Policy Statement on Deception, appended to Cliffdale 
Assoc., Inc., 103 FTC 110 (1984); see also FTC v. Verity Int'l, 443 
F.3d 48, 63 (2d Cir. 2006); FTC v. Pantron I Corp., 33 F.3d 1088, 
1095 (9th Cir. 1994). Under Section 5, an act or practice is unfair 
if it causes or is likely to cause substantial injury that consumers 
could not reasonably avoid, and the injury is not outweighed by 
countervailing benefits to consumers or competition. 15 U.S.C. 
45(n).
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    As administrative interpretations of Section 5, the Commission's 
Jewelry Guides are not intended to be stricter than Section 5. Rather, 
they provide the Commission's interpretation of Section 5 as applied to 
jewelry marketing, to help marketers avoid deceptive practices. To 
comply with Section 5, marketers must consider how reasonable consumers 
will view their claims as a whole, assessing the net impression 
conveyed by all elements (including the text, product names, and 
depictions).\4\
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    \4\ See generally Deception Policy Statement, appended to 
Cliffdale Assoc., Inc., 103 FTC at 179 (1984).
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    When the Commission issues or revises an industry guide, it is 
providing an administrative interpretation of laws it administers, 
including Section 5's prohibition on unfair and deceptive acts or 
practices in or affecting commerce. The Commission provides its 
administrative interpretation based on information submitted and any 
other information available, including consumer perception evidence 
whenever possible, analyzing the information through the reasonable 
person standard first set forth in the Deception Policy Statement in 
1983, and the unfairness standard, first set forth in the Unfairness 
Policy Statement announced in 1984 and codified in Section 5(n) of the 
FTC Act. Applying the reasonable consumer standard supported by 
consumer perception evidence as the Commission revises the Jewelry 
Guides (which originally predated the two policy statements) enhances 
the protection of consumers from the harm of false or misleading claims 
in jewelry marketing and fosters truthful, non-misleading claims in 
jewelry marketing that are beneficial to consumers and competition. 
Based on this framework, the Commission now makes several modifications 
and additions to the previous Guides and adopts the resulting revised 
Guides as final. Specifically, the Commission revises the following 
areas: (I) Surface application of precious metals; (II) alloys with 
precious metals in amounts below minimum thresholds; (III) products 
containing more than one precious metal; (IV) composite gemstone 
products; (V) varietals; (VI) ``cultured'' diamonds; (VII) qualifying 
claims about man-made gemstones; (VIII) pearl treatment disclosures; 
(IX) use of the term ``gem''; (X) misleading illustrations; (XI) 
diamond definition; and (XII) exemptions recognized in the assay for 
gold, silver, and platinum. Finally, the Commission does not expand the 
existing Guides to address certain products and claims as requested by 
commenters.

Surface Application of Precious Metals

    The final Guides include several revisions addressing precious 
metal surface applications. First, based on the comments, the Guides 
now caution 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\ The Guides retain similar guidance 
advising marketers not to use gold terms to describe coated products or 
parts unless the term is qualified to convey that the gold is only on 
the surface.\6\
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    \5\ Sections 23.5(b)(4) (silver) and 23.6(b)(1) (platinum).
    \6\ Section 23.3(b)(3).
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    Second, for sellers choosing to advertise their products' precious 
metal coatings, the final Guides advise how to do so non-deceptively. 
Specifically, they advise marketers advertising their product's gold, 
silver, or platinum coating to assure its reasonable durability. In 
this context, ``reasonable durability'' means ``all areas of the 
plating are sufficiently thick to assure coverage that reasonable 
consumers would expect from the surface application.'' \7\
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    \7\ Sections 23.3(b)(4), (5), (6), and (8), (c)(2) and (3) 
(gold); 23.5(b)(5) (silver); and 23.6(b)(2) (platinum).
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    Third, based on new durability testing, the final Guides include 
revised examples of non-deceptive markings and descriptions for gold 
surface applications that are reasonably durable.\8\ For electrolytic 
applications, the Guides retain the same thickness and karat fineness 
amounts as the previous Guides, but no longer advise marketers they may 
non-deceptively use ``gold flashed'' and ``gold washed'' for products 
with an electroplating that does not have a minimum thickness 
throughout equivalent to 0.175 microns (approximately 7/1,000,000ths of 
an inch) of fine gold. For mechanical applications, the Guides now 
advise a 1/40th minimum weight ratio for non-deceptive use of the terms 
``gold plate(d),'' \9\ ``gold overlay,'' ``rolled gold plate.'' \10\ In 
addition, the Guides retain existing guidance advising a 1/20th weight 
ratio for ``gold filled'' products, and the guidance advising marketers 
to

[[Page 40666]]

disclose weight ratio when using ``gold overlay'' or ``rolled gold 
plate'' for products below 1/20th.\11\
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    \8\ These examples are also referred to as ``safe harbor'' 
guidance.
    \9\ As proposed, the final Guides eliminate the safe harbor 
provision for ``gold plate(d)'' coatings applied by any method and 
transfer this term to guidance that separately addresses 
electrolytic and mechanical applications.
    \10\ Section 23.3(c)(2). As explained in the SBP, the Guides 
advise a minimum weight ratio, rather than the previously proposed 
coating thickness, based on new evidence indicating that 1/40th 
provides the durability consumers expect.
    \11\ Section 23.3(c)(2). As proposed, the final Guides eliminate 
a note concerning outdated terms (e.g., ``Duragold,'' ``Diragold'') 
which commenters agreed are no longer used. However, they do not set 
standards for new coating terms (e.g., ``clad,'' ``bonded'') or 
other precious metal coatings such as silver or platinum.
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    Fourth, the final Guides advise marketers to disclose the purity of 
coatings made with a gold, silver, or platinum alloy. The Guides 
already caution marketers against unqualified use of ``gold,'' 
``silver,'' or ``platinum'' to describe alloys containing less than 24K 
gold, 925 PPT silver, or 950 PPT platinum. To clarify that this 
guidance applies equally to products coated with a gold, silver, or 
platinum alloy, the Commission amends the guidance to advise that 
marketers qualify their use of gold, silver, or platinum terms to 
describe ``all or part'' of a product, ``including the surface layer of 
a coated product,'' with equally conspicuous, accurate purity 
disclosures.\12\
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    \12\ Sections 23.3(b)(1) and (2) (gold); 23.5(b)(1) (silver); 
and 23.6(b)(3) (platinum). In addition, based on the comments, the 
Guides now include karat fineness disclosures in the description and 
marking examples for gold electrolytic applications, consistent with 
the examples for mechanical applications. Section 23.3(b)(5), (6), 
and (8); 23.3(c)(2) and (3).
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    Finally, the final Guides advise marketers to disclose rhodium 
coatings over products advertised as precious metal, such as rhodium-
plated items marketed as ``white gold'' or silver.\13\
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    \13\ Rhodium is a platinum group metal often used to enhance the 
white color of silver and white gold jewelry. Section 23.7.
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Below-Threshold Precious Metal Alloys

    The previous Guides cautioned marketers against using the words 
``gold,'' ``silver,'' ``platinum,'' or their abbreviations to describe 
or mark a product unless it contained the precious metal in an amount 
that met or exceeded specified thresholds. The final Guides remove the 
thresholds for gold and silver alloys because new evidence indicates 
they are no longer necessary to prevent deception. Specifically, the 
final Guides now advise marketers they may use gold terms to describe a 
product or part thereof composed throughout of gold alloy--whether 
above or below 10 karats--if they qualify the term with an equally 
conspicuous, accurate karat fineness disclosure.\14\ The final Guides 
also advise marketers they may use ``silver'' to describe a product or 
part thereof composed throughout of an alloy containing less than 925 
parts per thousand (PPT), as long as an equally conspicuous, accurate 
PPT designation immediately precedes the silver term.\15\ These changes 
will give marketers greater flexibility in providing accurate 
information about their products' content.
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    \14\ Section 23.3(b)(2).
    \15\ Section 23.5(b)(1).
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    However, the final Guides retain the guidance advising a 925 PPT 
threshold for ``solid silver,'' ``Sterling Silver,'' ``Sterling,'' and 
the ``Ster.'' Abbreviation,\16\ and reserving ``coin'' and ``coin 
silver'' for products that are 900 PPT,\17\ based on their longstanding 
use and therefore probable consumer understanding. Rather than merely 
signaling the presence of silver, these terms likely denote specific 
purity levels (e.g., that ``coin silver'' contains less silver than 
``sterling silver''). In addition, the Guides retain the existing 
platinum alloy guidance without change because the record indicates 
that, unlike gold and silver, which have traditionally been mixed with 
base metals to create jewelry, consumers expect platinum products to be 
substantially composed of pure platinum.
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    \16\ Section 23.5(b)(2).
    \17\ Section 23.5(b)(3).
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Products Containing More Than One Precious Metal

    Based on consumer perception evidence, the final Guides contain a 
new section (Section 23.8), which 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, and provides examples of 
markings 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). This guidance generally advises 
marketers to list precious metals in the order of their relative weight 
in the product from greatest to least. Marketers, however, may list 
metals in a different order if the context makes clear that the metal 
listed first is not predominant (e.g., ``14k gold-accented silver''), 
and the Guides provide illustrative examples of such contexts.

Composite Gemstone Products

    Based on the record, the final Guides contain new guidance in 
Section 23.25 to address increased prevalence of deceptive claims 
resulting from the marketing of composite gemstone products made with 
gemstone material and any amount of filler or binder, such as lead 
glass. Specifically, this guidance cautions marketers not to use an 
unqualified gemstone name to describe these products, and advises 
against calling them ``treated [gemstone name].'' It also cautions 
against using the unqualified terms ``composite [gemstone name],'' 
``hybrid [gemstone name],'' or ``manufactured [gemstone name]'' unless 
the term is qualified to disclose clearly and conspicuously that the 
product: (a) Does not have the same characteristics as the named stone; 
and (b) requires special care. The final Guides further recommend that 
the seller disclose the special care requirements to the purchaser.\18\
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    \18\ Section 23.25(d).
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Varietals

    Based on consumer perception evidence, Section 23.26 contains new 
guidance stating it is unfair or deceptive to mark or describe a 
product with an incorrect varietal name. 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). To help sellers avoid making deceptive claims, this 
section also provides two examples of markings or descriptions that may 
be misleading: (a) Use of the term ``yellow emerald'' to describe a 
golden beryl or heliodor, and (b) use of the term ``green amethyst'' to 
describe prasiolite.

``Cultured'' Diamonds

    The final Guides include new guidance addressing use of the word 
``cultured'' to describe laboratory-created diamonds. Based on consumer 
perception evidence showing marketers can effectively qualify the term, 
Section 23.12(c)(3) advises them to qualify their use of ``cultured'' 
by disclosing clearly and conspicuously that the product is not a mined 
stone. Additionally, the record indicates that marketers can 
effectively qualify the term ``cultured diamond'' in some circumstances 
even when the Guides' suggested disclosures (``laboratory-created,'' 
``laboratory-grown,'' ``[manufacturer-name]-created'') do not appear in 
immediate conjunction to the term. For example, some lab-created 
diamond sellers may choose to emphasize their products' man-made nature 
in advertisements targeting consumers seeking diamonds that are not 
traditionally mined. Therefore, to provide greater flexibility, the 
final Guides advise that marketers may qualify their ``cultured 
diamond'' claim with words or phrases similar to those detailed in the 
Guides. Moreover, these marketers do not need to make these qualifying 
disclosures immediately adjacent to the word ``cultured,'' provided 
they disclose

[[Page 40667]]

clearly and conspicuously that the product is not a mined stone.

Qualifying Claims About Man-Made Gemstones

    To provide marketers greater flexibility, the final Guides also 
include revisions to the guidance regarding the use of gemstone names 
generally (Section 23.25(b)). This amended guidance now advises 
marketers of man-made gemstones sharing the same optical, physical, and 
chemical properties as the named stone that they may use words or 
phrases other than the ones listed in the previous Guides 
(``laboratory-grown,'' ``laboratory-created,'' ``[manufacturer name]-
created,'' ``synthetic'') if they clearly and conspicuously convey that 
the product is not a mined stone.

Treatments to Pearl Products

    Based on the comments, the final Guides include a new section 
(Section 23.23) advising that marketers disclose clearly and 
conspicuously treatments to pearls and cultured pearls that: (a) Are 
not permanent, (b) create special care requirements, or (c) 
significantly affect value.\19\
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    \19\ This new section tracks the existing guidance regarding 
gemstone treatments.
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Use of the Term ``Gem''

    The final Guides eliminate two provisions that discussed use of the 
word ``gem'' because they are not necessary to prevent deception. 
Specifically, the final Guides do not include the former Section 23.25 
(Misuse of the word ``gem'') and Section 23.20(j) (misuse of the word 
``gem'' as to pearls). Instead, they include the term ``gem'' in 
Section 23.25 (Misuse of the words ``ruby,'' ``sapphire,'' ``emerald,'' 
``topaz, ``stone,'' ``birthstone,'' ``gemstone,'' etc.).

Misleading Illustrations

    To streamline the guidance, the final Guides also eliminate a 
section that discussed misleading illustrations (former Section 23.2) 
because it provided guidance already addressed in other areas: Section 
23.1 (Deception (general)) and Section 23.0 (Scope and application). To 
preserve its specific guidance regarding diamond illustrations and 
gemstone size, however, the former Note to Section 23.2 has been 
transferred to Section 23.1.

Diamond Definition

    Based on changes in the market, the final Guides eliminate the word 
``natural'' from the definition of diamond in Section 23.12(a) because 
lab-created products that have essentially the same optical, physical, 
and chemical properties as mined diamonds are also diamonds.\20\
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    \20\ The distinctions between these lab-created diamonds and 
mined stones are addressed elsewhere in the Guides. See Sections 
23.12(c)(3) and 23.25.
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Exemptions in the Assay for Gold, Silver, and Platinum

    Based on the comments, the final Guides add bracelet and necklace 
snap tongues to the exempted items listed in the Appendix for gold 
alloy products and for products made of silver in combination with 
gold. These items are already included in the exemptions for 
mechanically-coated gold products, silver products, and platinum 
products. Thus, with this revision, bracelet and necklace snap tongues 
appear in each section addressing assay exemptions.\21\
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    \21\ Furthermore, the Commission removes an outdated provision 
in paragraph (e) of the Appendix regarding platinum. The provision 
listed additional exemptions for items marked in accordance with 
guidance that once addressed products containing less than 500 PPT 
platinum. Because the Commission eliminated this guidance in a prior 
proceeding, the corresponding list of assay exemptions is no longer 
necessary. See 62 FR 16669, 16674 (Apr. 8, 1997). The final Appendix 
therefore retains the exemptions for platinum products, but does not 
include additional exemptions for products with less than 500 PPT.
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Products and Claims Not Addressed

    The final Guides do not make some revisions that commenters sought. 
Specifically, the final Guides do not expand the existing guidance to 
address products made with palladium, use of the term ``natural'' to 
describe treated gemstones, or the use of geographic and regional 
identifiers because the evidence does not demonstrate that amendments 
are necessary to prevent deception. For the same reason, the Commission 
declines to make revisions addressing diamond-related issues such as 
use of the terms ``blue white,'' ``ethical'' and ``conflict free,'' as 
well as grading and appraisals. Furthermore, the final Guides do not 
expand the guidance regarding ``handmade'' and similar terms 
specifically to include or exclude hand-cast items because the 
Commission lacks sufficient evidence on which to base new guidance.\22\ 
For the same reason, the Guides do not address whether marketers may 
non-deceptively describe ``large-scale'' and ``mass'' or 
``industrially'' produced jewelry as ``handmade.'' \23\
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    \22\ The Commission does, however, add precious metal clays, 
ingots, and casting grain to the ``raw materials'' listed in the 
Note to this section (Section 23.2).
    \23\ Additionally, the Commission declines to make changes 
regarding the use of parts per thousand, instead of karats, for gold 
content disclosures.
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Conclusion

    For further analysis of comments and the final guidance, please see 
the SBP on the FTC's website, available at https://www.ftc.gov/public-statements/2018/07/statement-basis-purpose-final-revisions-jewelry-guides.

List of Subjects in 16 CFR Part 23

    Advertising, Jewelry, Labeling, Pewter, Precious metals, and Trade 
practices.


0
For the reasons set forth in the preamble, the Federal Trade Commission 
revises 16 CFR part 23 to read as follows:

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 ``handmade,'' ``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,'' ``gem,'' 
``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 treatments to gemstones.

[[Page 40668]]

23.25 Misuse of the words ``ruby,'' ``sapphire,'' ``emerald,'' 
``topaz,'' ``stone,'' ``birthstone,'' ``gemstone,'' etc.
23.26 Misrepresentation as to varietal name.
23.27 Misuse of the words ``real,'' ``genuine,'' ``natural,'' 
``precious,'' etc.
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.


Sec.  23.0  Scope and application.

    (a) The guides in this part 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 watch bands 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 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: \24\
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    \24\ See paragraph (c) of this section 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, 
including the surface layer of a coated 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 (including the surface layer of a coated 
product) composed throughout of an alloy of gold (i.e., gold that is 
less than 24 karats), 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

[[Page 40669]]

indicate that the product or part is only surface-plated.
    (4) Marking, describing, or otherwise representing all or part of 
an industry product as being plated or coated with gold or gold alloy 
unless all significant surfaces of the product or part contain a 
plating or coating of gold or gold alloy that is of reasonable 
durability.\25\
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    \25\ For the purpose of this section, ``reasonable durability'' 
means that all areas of the plating are sufficiently thick 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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    (5) 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 \26\ 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.
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    \26\ See footnote 2.
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    (6) 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 \27\ 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.
---------------------------------------------------------------------------

    \27\ See footnote 2.
---------------------------------------------------------------------------

    (7) 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.
    (8) Use of the term ``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 \28\ 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.
---------------------------------------------------------------------------

    \28\ See footnote 2.
---------------------------------------------------------------------------

    (9) 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.
    (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 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,'' ``14 Kt. Gold,'' ``9 Karat 
Gold,'' or ``9 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.,'' ``14 K.,'' or ``9 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 reasonable durability \29\ may be marked or 
described as ``Gold Plate,'' ``Gold Plated,'' ``Gold Overlay,'' 
``Rolled Gold Plate,'' ``Rolled Gold Plated,'' or an adequate 
abbreviation, when such plating constitutes at least 1/40th 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 Kt. Gold Overlay,'' or ``14K. R.G.P.''). When such 
plating constitutes at least 1/20th of the weight of the metal in the 
entire article, the term ``Gold Filled'' may be used. The terms ``Gold 
Overlay,'' ``Rolled Gold Plate,'' and ``Rolled Gold Plated'' 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.'').
---------------------------------------------------------------------------

    \29\ See footnote 2.
---------------------------------------------------------------------------

    (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 of a gold alloy of not less than 10 karat 
fineness, which is of reasonable durability \30\ and has a minimum 
thickness throughout equivalent to 0.175 microns (approximately 7/
1,000,000ths of an inch) of fine gold,\31\ may be marked or described 
as ``Gold Plate,'' ``Gold Plated,'' ``Gold Electroplate'' or ``Gold 
Electroplated,'' or so abbreviated, if the term is immediately preceded 
by a designation of the karat fineness of the plating which is of equal 
conspicuousness as the term used (e.g., ``12 Karat Gold Electroplate'' 
or ``12K G.E.P.''). When the electroplating is of the minimum fineness 
specified above and of a minimum thickness throughout equivalent to two 
and one half (2\1/2\) microns (or approximately 100/1,000,000ths of an 
inch) of fine gold, the marking or description may be ``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).''
---------------------------------------------------------------------------

    \30\ See footnote 2.
    \31\ A product containing 1 micron (otherwise known as 1[mu]) of 
12 karat gold is equivalent to one-half micron of 24-karat gold.
---------------------------------------------------------------------------

    (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.\32\
---------------------------------------------------------------------------

    \32\ 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.


[[Page 40670]]


---------------------------------------------------------------------------

    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 10 karat 
fineness, that is of reasonable durability \33\ and a minimum thickness 
throughout equivalent to two and one half (2\1/2\) microns (or 
approximately 100/1,000,000ths of an inch) of fine gold.
---------------------------------------------------------------------------

    \33\ See footnote 2.

    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 an industry product as 
having a silver content, plating, electroplating, or coating.
    (b) The following are examples of markings or descriptions that may 
be misleading:
    (1) Use of the unqualified word ``silver'' to mark, describe, or 
otherwise represent all or part of an industry product, including the 
surface layer of a coated product, unless an equally conspicuous, 
accurate quality fineness designation indicating the pure silver 
content in parts per thousand immediately precedes the term (e.g., 
``750 silver'').
    (2) Use of the words ``solid silver,'' ``Sterling Silver,'' 
``Sterling,'' or the abbreviation ``Ster.'' to mark, describe, or 
otherwise represent all or part of an industry product unless it is at 
least 925/1,000ths pure silver.
    (3) Use of the words ``coin'' or ``coin silver'' to mark, describe, 
or otherwise represent all or part of an industry product unless it is 
at least 900/1,000ths pure silver.
    (4) Use of the word ``silver'' to mark, describe, or otherwise 
represent all or part of an industry product that is not composed 
throughout of silver, but has a surface layer or coating of silver, 
unless the term is adequately qualified to indicate that the product or 
part is only coated.
    (5) 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.\34\
---------------------------------------------------------------------------

    \34\ 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.\35\
---------------------------------------------------------------------------

    \35\ 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: \36\
---------------------------------------------------------------------------

    \36\ 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) Marking, describing, or otherwise representing all or part of 
an industry product as being plated or coated with platinum unless all 
significant surfaces of the product or part contain a plating or 
coating of platinum that is of reasonable durability.\37\
---------------------------------------------------------------------------

    \37\ See footnote 2.
---------------------------------------------------------------------------

    (3) Use of the word ``Platinum'' or any abbreviation, without 
qualification, to describe all or part of an industry product 
(including the surface layer of a coated product) that is not composed 
throughout of 950 parts per thousand pure Platinum.
    (4) 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.''
    (5) 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.
    (6) 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
    (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 this paragraph (b)(6)(ii), 
if the marketer has competent and reliable scientific evidence that 
such product does not differ materially from any one 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, hypoallergenicity, 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)(6): When using percentages to qualify 
platinum representations, marketers should convert the

[[Page 40671]]

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 (e.g., ``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 or 
stamped 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 the appendix.

Sec.  23.7  Disclosure of surface-layer 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 1,000 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 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

[[Page 40672]]

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 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 that have essentially the same optical, physical, and chemical 
properties as mined diamonds if the term is qualified by a clear and 
conspicuous disclosure (for example, the words ``laboratory-created,'' 
``laboratory-grown,'' ``[manufacturer name]-created,'' or some other 
word or phrase of like meaning) conveying that the product is not a 
mined stone.

    Note to Paragraph (c): Additional guidance about imitation and 
laboratory-created diamond representations and misuse of the words 
``real,'' ``genuine,'' ``natural,'' ``precious,'' ``semi-precious,'' 
and similar terms is set forth in Sec. Sec.  23.25 and 23.27.

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.

    (c) If diamond weight is stated as decimal parts of a carat (e.g., 
.47 carat), 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.


[[Page 40673]]


    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 paragraph (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.


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; or
    (c) The treatment has a significant effect on the product's value. 
The seller

[[Page 40674]]

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; or
    (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.

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 mined 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,'' or some other 
word or phrase of like meaning, or by the word ``imitation'' or 
``simulated,'' so as to disclose clearly the nature of the product and 
the fact it is not a mined gemstone.

    Note 1 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 a mined stone.


    Note 2 to Paragraph (b): Marketers may use the word ``cultured'' 
to describe laboratory-created gemstone products that have 
essentially the same optical, physical, and chemical properties as 
the named stone if the term (e.g., ``cultured ruby'') is qualified 
by a clear and conspicuous disclosure (for example, the words 
``laboratory-created,'' ``laboratory-grown,'' ``[manufacturer name]-
created,'' or some other word or phrase of like meaning) conveying 
that the product is not a mined stone. Additional guidance regarding 
the use of ``cultured'' to describe a laboratory-created diamond is 
set forth in Sec.  23.12(c)(3).

    (c) It is unfair or deceptive to use the word ``laboratory-grown,'' 
``laboratory-created,'' ``[manufacturer name]-created,'' ``synthetic,'' 
or other word or phrase of like meaning with the name of any natural 
stone to describe any industry product unless such product has 
essentially the same optical, physical, and chemical properties as the 
stone named.
    (d) It is unfair or deceptive to describe products made with 
gemstone material and any amount of filler or binder, such as 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,'' ``treated sapphire,'' ``treated 
emerald,'' ``treated topaz,'' or ``treated [gemstone name]'';
    (3) As a ``laboratory-grown [gemstone name],'' ``laboratory-created 
[gemstone name],'' ``[manufacturer name]-created [gemstone name],'' 
``or ``synthetic [gemstone name];'' or
    (4) As a ``composite [gemstone name],'' ``hybrid [gemstone name],'' 
or ``manufactured [gemstone name],'' unless the term is qualified to 
disclose clearly and conspicuously that the product: (A) Does not have 
the same characteristics as the named stone; and (B) requires special 
care. It is further recommended that the seller disclose the special 
care requirements to the purchaser.


Sec.  23.26  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 markings 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.  23.26:  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.  23.27  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.  23.28  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 of 
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, bracelet and 
necklace snap tongues, metallic parts completely and permanently 
encased in a nonmetallic covering, field pieces and bezels for 
lockets,\38\ and wire pegs or rivets used for applying mountings and 
other ornaments, which mountings or ornaments shall be of the 
quality marked.
---------------------------------------------------------------------------

    \38\ 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 to Paragraph (a): 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

[[Page 40675]]

straps; metal parts permanently encased in a non-metallic covering; 
---------------------------------------------------------------------------
and for oxfords,\39\ coil and joint springs.

    \39\ 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 to Paragraph (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 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, bracelet and necklace snap tongues, 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.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018-17454 Filed 8-15-18; 8:45 am]
BILLING CODE 6750-01-P