On March 1, 1999, Lazare Kaplan International Inc. (LKI) sent a press release to the financial press, stating that its new subsidiary, Pegasus Overseas Limited (POL), would be the exclusive agents for selling natural diamonds that had undergone a new process developed by General Electric (GE). According to LKI, the process was permanent and irreversible, and was designed to improve the color, brilliance, and brightness of qualifying diamonds, which they said were a 'small fraction of the overall diamond market.' Both round and fancy-shaped 'processed' diamonds were to be marketed, each with an accompanying grading report from a major laboratory. The release stressed the 'all-natural content' of the processed diamonds, and stated that the process did not involve irradiation, laser drilling, surface coating, or fracture filling.

In a March 19 press release, GIA’s president Bill Boyajian called for information from the parties involved in the process. The release further noted that GIA researchers had investigated a small sample of diamonds they believed had undergone the GE process, and that they had noted unusual gemological features in some of the diamonds. No specific information as to the nature of these features was provided, and GIA has yet to release any conclusive evidence that will identify that a diamond has undergone the GE process.
 
After extensive discussions with GE and LKI, GIA announced the following in a press release dated April 28. LKI will laser-inscribe all GE-processed diamonds on the girdle with the inscription 'GE POL' (figure 4). GIA will make the following comment on grading reports for all GE-processed diamonds sent to GIA from POL: ' ‘GE POL’ is present on the girdle. Pegasus Overseas Limited (POL) states that this diamond has been processed to improve its appearance by General Electric (GE).' GIA will move forward with a research project to understand the nature of the process and explore any identifying characteristics of these processed diamonds. It will use the HORIZON laboratory operations and information management system to track and build data on every GE-processed diamond submitted to GIA for grading. Ultimately, GIA intends to publish its findings in Gems & Gemology. LKI began selling the GE-processed diamonds--all with 'GE POL' inscribed on the girdle--through POL in Antwerp in late May.
 
During a special June 23 session at the International Gemological Symposium in San Diego, California, Bill Boyajian, GIA Gem Trade Laboratory chief executive officer Tom Yonelunas, GIA Gem Trade Laboratory vice president of identification services Tom Moses, and GIA director of research Jim Shigley provided a 'Trade Update' on the GE-processed 'Pegasus' diamonds. Although they began by explaining that there was still no 'black box' that could identify these diamonds, they did reveal some information based on study of 'several hundred' such diamonds that POL had submitted to the laboratory for grading reports. A summary of their findings includes: weight--0.30 to 7 ct, with most in the 1-3 ct range); shapes--most cut in fancy shapes, but some rounds; clarity--IF to I₂, with most IF to SI₁; color--D to light yellow, with most D to H (the majority of all colors are brownish or grayish). The 'overwhelming majority' of diamonds were type II’s, but some type I’s were seen. Mr. Yonelunas, who presented these data, cautioned that the lab had yet to see the 'full range' of processed goods. The best hope to understand this process requires examination of diamonds before and after processing, but these have not yet been available to study.
 
Dr. Shigley reported that GIA has been conducting its own experiments on treating diamonds using high pressure and high temperature (HPHT) to help develop identification criteria. He noted that one could add or subtract color to diamonds with this technique. Mr. Moses pointed out that HPHT treatment of diamonds has been known in the scientific community since the early 1970s. Although GE has not provided details of the 'process' being used, many people have expressed their opinion that HPHT is involved (see, e.g., K. Schmetzer, 'Behandlung natürlicher Diamanten zur Reduzierung der Gelb- oder Braunsättigung' (Treatment of natural diamonds in order to reduce the yellow or brown color saturation), Goldschmiede Zeitung, Vol. 97, No. 5, May 1999, pp. 47-48 [in German]), so it is clearly important to know what the features of such treated diamonds are.
 
Mr. Yonelunas stated the belief that at least a portion of the GE-processed diamonds will be recognizable gemologically. In fact, a parcel of GE-processed diamonds from which the inscriptions had been either partially or completely removed had already been resubmitted to the Gem Trade Laboratory, and the diamonds had been noticed using archived data from the laboratory’s HORIZON system. A GIA press release dated July 6 indicated how such diamonds would be handled: The company submitting the diamond would be asked to immediately authorize re-inscription of that diamond. Should the company choose otherwise, GIA would be 'obligated to report this to the appropriate authorities, including the Jeweler's Vigilance Committee (JVC).' At the World Federation of Diamond Bourses meeting in Moscow in early July, a resolution was passed regarding the GE-processed diamonds. As quoted on the Internet in Rapaport News (and, at our press time, scheduled to appear in the July 30 issue of the Rapaport Diamond Report), the resolution states the following:

1. If a diamond has been treated or processed in order to alter or enhance its color, other than by generally accepted procedures of cutting and polishing, this fact must be disclosed in writing when such a diamond is offered for sale or submitted for certification.
2. The removal of a lasered inscription which identifies a diamond as having been treated or processed as above, shall be considered a deceptive process.
3. Any violation of Articles 1 or 2 above shall be regarded as fraudulent and shall be referred to the applicable Bourse for disciplinary action measure as the Bourse sees fit.
4. If such a treated or processed diamond is sold without disclosure in breach of the above rule, even in good faith, the buyer shall be entitled to cancel the sale, return the diamond and obtain a refund of the purchase price.