The Federal Trade Commission’s revised Guides for the Jewelry Industry say it’s OK to sell diamonds with laser drill holes and not tell anyone about them. The 1997 regulations state that “if a diamond has been treated, it is unfair or deceptive not to disclose that the diamond has been treated and that the treatment is not or may not be permanent.” But laser drilling is not considered a treatment; hence, no disclosure is needed.

The FTC and some members of our industry call laser drilling a normal part of the fashioning process, “an extension of cutting.” The agency notes that “the channel left by the laser is often just one of several or numerous ‘natural’ cracks, inclusions or grain.” That’s debatable, since laser drill holes and tubes obviously are manufactured by humans, not nature. Further, laser-drilled diamonds are not always imperfect gems with “numerous cracks”; the accompanying photos show that diamonds much higher in clarity also are laser drilled.

But the critical error came when the FTC decided to rely on the Diamond Manufacturers and Importers Association’s assurance that laser drilling “is readily detected with a ten power loupe.” Thus, say the Guides, “if the buyer chose to examine the diamond under standard 10-power magnification, the laser tunnels would be obvious to the buyer.”

That’s what they say. And that’s where they’re wrong.

Brief history. Laser drilling of diamonds has been around since the 1960s. Zvi Yehuda, who invented fracture filling, was one of several who invented laser drilling. (GIA’s Liddicoat Library says that Raytheon, Perlman and the Korad division of Hadron Inc. all were involved in developing laser drilling at roughly the same time.)

Back then, they used a pulse style laser, which concentrated light and heat into short blasts. This left rough drill holes which were fractured down their entire length and very easy to detect.

Technology has come a long way since then. Here’s a look at the process.

What is it? The word laser is an acronym for Light Amplified by Stimulated Emission of Radiation. The concept of laser drilling is easy to understand if you think back to your youth. Ever try to set a leaf or piece of paper on fire using a magnifying glass? The Boy Scouts teach this as a survival technique. The idea is to move your magnifier in and out until you focus sunlight into a very fine, bright pinpoint on the leaf. This concentrated light produces enough heat to burn the object on which it is focused and start a campfire.

Laser drilling diamond involves the same process. First you amplify and concentrate light into a single beam, then focus it on an inclusion until it is burnt. Next you slowly draw the focus of the laser back towards the surface of the stone, micron by micron, burning a tube of diamond from the inside out.

That’s not a misprint! Most people think laser drilling proceeds from the surface towards the inclusion. After all, how many drill holes have you seen which missed the inclusion? How could they possibly miss if they focused on the inclusion first?

It’s actually quite easy.

Reflection and refraction. For a pulse laser to work, you must be able to focus the light beam on something dark, preferably black. The light must be absorbed where you want it to burn; otherwise, the beam may drill almost anywhere.

However, when an inclusion is reflective, the laser focuses on the spot where the reflected light goes rather than on the inclusion. Perhaps you’ve seen laser drill holes which reach a strain halo feather attached to and surrounding a crystal. Why didn’t they drill the crystal itself? There are two possible reasons. 1) The feather was closer to the surface and the shorter the drill tube, the less reflection there is. 2) The crystal was reflective, but the beam needed to focus on something dark – in this case, the feather.

The entry angle of the beam also affects how well the laser works. Unless the beam is at a 90° angle to the surface, you’ll get refraction or bending of light. This distorts the position in which an inclusion appears to lie.

To see how this works, prop a straw against the rim in a glass of water, then look at it from the side. The straw appears bent, although it isn’t.You’re seeing the results of light slowing and bending as it enters at an angle other than 90°. Now straighten up the straw. The angle of the bend gets weaker until the straw is straight up and down at a 90° angle to the surface.

If you drill at an angle other than 90°, you won’t see the correct angle at which you should drill. Your line of sight is bent due to the refraction of light. If you use an old pulse laser, you’re almost sure to miss the target.

Drilling details. There’s more involved in laser drilling, of course. Lasering a diamond leaves graphite in the drill tube and in place of the inclusion. To remove this and produce a smooth, frosty white appearance, a strong bolt of electrical charge – a miniature lightning bolt – is sent down the drill hole in a process called “sparking.” This creates enough heat to vaporize the graphite, which is a very good conductor of electricity, into CO2 and O3 (ozone).

Due to driller or computer error, the tube sometimes doesn’t reach the diamond’s surface and a needle-like graphite inclusion is left behind. You might see black graphite laser drill lines emanating from the inclusion, which reach only half way to the surface. How do you know these are, in fact, improper laser traces? Look for the proper drill tube right alongside, which finally got the job done.

Sparking is a standard technique, but if it’s not done properly, burn marks may be left around drill holes; the high heat of the electricity actually burns the surface of the diamond. To prevent this, drillers use a little borax to protect the surface during sparking.

Once sparking is complete, remaining black areas are leached (dissolved) using an acid mixture called King’s solution, which is one third hydrochloric acid (HCl) and two thirds nitric acid (HNO3). It’s similar to aqua regia, which is one part HCl to three parts HNO3.

The new lasers. Today, CW or “continuous wave” lasers have replaced pulse lasers. They produce a cleaner, smoother drill hole and tube. They’re easier to focus accurately and the tube is much narrower (15-20 microns vs. 35 microns for a pulse laser). It can be even smaller, but then the acid used to leach out the tube won’t penetrate as well.

Shorter, thinner laser holes and tubes mean much smaller inclusions can be laser drilled. This, in turn, means:

• SI or even VS diamonds can be laser drilled, not just Imperfect ones.

• Drill holes and tubes are more difficult to see and identify.

Here’s what to look for. Laser drilling is used to turn dark inclusions white, so when you examine diamonds, be sure to check for white opaque cavities. If you see them, search for laser drill holes.

The scenario might go like this. Someone has a VS2 diamond with a dark crystal in an upper girdle facet. The diamond is at the critical weight of 0.75 ct., so repolishing is not an option. Laser drilling, however, will turn the crystal to white and – because the CW laser drill hole and tube will be small – may raise the clarity to VS1. Indeed, if the crystal is close to the surface, the drill tube will be very short and may not be visible through the pavilion, where inclusions are easiest to spot.

If you examine such a diamond after lasering, you may see the crystal (the white opaque area), but probably will miss the drill tube. So view the surface of the upper girdle facet carefully to find the tiny opening of the laser hole.

Small burnt areas on a single facet are also signs of laser drilling. When a cutter burns the surface of a diamond, more than one facet generally is affected. Since sparking occurs only at the drill hole, it burns only one facet. (Of course there are exceptions to most rules. A stone with more than one drill hole could have a number of burnt facets. I’ve also seen non-drilled stones with facets purposely burnt to hide faint clouds and pinpoints just beneath the surface.)

Why drill diamonds? Sometimes laser drilling is the only way to improve the appearance of a diamond.

If inclusions lie close enough to the surface, they often will be polished out. This depends on how much such polishing will improve clarity and color grades and how much weight will be lost.

A 1-ct. diamond more than likely will not be polished. But it could be laser drilled with almost negligible weight loss. And lasering is definitely an option when a stone has a number of dark included crystals or feathers lying too far from the surface to be polished away.

Lasering also can be used to avoid recutting. A heart-shaped diamond may have started as a round or a broken marquise which was reshaped to remove a fracture or large chip. This involves grinding down to the inclusion and creating a wedge in the former outline of the stone. Drilling can reach the inclusion without creating the wedge -– and thus becomes just part of the fashioning process, say some supporters.

Every major diamond bourse district has laser drilling offices – even smaller markets like L.A. Uri Uralevich of 21st Century Laser in Los Angeles says he drilled 1,300 to 1,500 carats of diamonds last year. The largest was over 13 carats, the smallest was 0.10 ct. “There are large numbers of laser drilled melee on the market,” he says.

Most drilling is done overseas, however, because of labor and electrical costs. Laser drilling runs about $12-$15 a carat overseas vs. $25-$35 a carat in the U.S. (The first drill holes in the ’60s cost close to $150 a carat.)

Ron Yehuda, son of Zvi Yehuda and spokesperson for Yehuda Diamond Corp., says laser drilling isn’t a large part of their business these days. The cost is too high in New York. “We laser about 5% of the goods we enhance,” he says. Laser drilling to reach internal fractures isn’t common, but when the fracture can be filled after drilling, it becomes just another way to enhance the appearance of a diamond.

Yehuda recalls, “In the ’60s, when he was just starting to laser drill diamonds, my father went to Harry Winston with a proposition. At that time, Winston had a large supply of ‘spotted’ South African goods. He asked Harry if he would be interested in having these goods laser drilled. Winston replied, ‘How dare you take out what Nature has put in!’ How attitudes have changed.”

What to do? Although the FTC has ruled that you need not disclose laser drilling (unlike filling), it’s a good idea to do it anyway. Major diamond grading laboratories disclose lasering (see below), so it could show up later in a report on a diamond you sold. Sure, that’s legal, but how will your customer feel? Even Yehuda agrees: “The more you say, the more you gain the customer’s confidence. If laser drills were approached like fracture filling, [jewelers] would be better off.”

Of course, you have to see it first. Can you?

The FTC obviously thinks so, but its visibility statement was based on old technology. The old pulse style lasers left huge unsightly tubes, with feathers coming off them all the way down into the stone. Anyone and possibly their grandmother could see these holes using just a loupe.

The new lasers are quite different. Dealers who buy goods overseas using a loupe, as they have for decades, often have been fooled. Even trained laboratory gemologists have trouble seeing some of these newer drill tubes. If the FTC had seen photos of these new laser drill holes, perhaps its decision would have been different.

The industry speaks. In its latest press release, CIBJO (the International Confederation of Jewellery, Silverware, Diamonds, Pearls and Stones) says it will continue to push for full disclosure of laser drilling. “In the interest of consumer confidence, the laser drilling of diamonds should always be clearly and unambiguously disclosed,” it states.

CIBJO’s view is that customers, if offered two diamonds of “identical” appearance – one of which is lasered and one not – will surely prefer the unlasered diamond or expect a price difference, with the lasered one costing less. This makes disclosure necessary, the organization says. It adds that prior to the 1993 World Diamond Congress, De Beers agreed that all forms of treatment to natural diamonds should be disclosed.

The International Standards Organization (ISO) also favors disclosure. However, the World Federation of Diamond Bourses and International Diamond Manufacturers Association do not require members to disclose laser drilling. CIBJO believes that “if consumers, retailers and others at the front end of the supply chain can keep up the pressure, the diamond industry will have to listen.”

As noted, all major diamond grading labs here and abroad – GIA’s Gem Trade Lab, AGS, IGI, Antwerp’s HRD, Japan’s AGT, Bangkok’s Centre for Gem Testing – have said they will continue to disclose laser drilling. The European Gem Lab’s U.S. headquarters in New York says it is proud that it discloses laser drilling, but is unable to state the policies of EGL labs outside the U.S.

Bob Weiner of Worldwide Diamond Company in Los Angeles uses a number of different labs to grade diamonds. He confirms that some labs overseas still do not disclose laser drilling. “I’m pretty sure it was the Israeli EGL that graded one stone for me and it was drilled, so I had to write ‘drilled’ in the comments section myself.” He adds, “It seems that [the jewelry industry] is trying not to disclose anything, and I’m trying to disclose everything. I even tell people if I soaked a stone. ‘It had a little black in the feather, so I soaked it in acid and now it’s white.’”

The Jewelers of America, American Gem Trade Association, International Society of Appraisers, Accredited Gemologists’ Association, American Gem Society and a host of other national organizations all say their members are encouraged and sometimes even required to disclose laser drilling.

Shouldn’t you?