AGTA Enhancement Code L is the standardised trade designation assigned by the American Gem Trade Association to diamonds that have undergone laser drilling — a permanent clarity-enhancement procedure in which a fine laser channel is bored from the stone's surface to a dark inclusion, which is then chemically bleached or otherwise lightened. The code forms part of the AGTA's broader enhancement-disclosure framework, which assigns single-letter identifiers to each recognised treatment category and mandates that sellers disclose any applicable code at the point of sale. Code L is unique among AGTA enhancement designations in that it applies exclusively to diamonds; no other gem species is commercially laser-drilled in the same manner.

Browse loose, certified diamonds in Toronto, Canada — or book a private viewing to see them in hand.

The Treatment Process

Laser drilling exploits the precision of an infrared laser — typically a neodymium-doped YAG (Nd:YAG) or similar solid-state instrument — to ablate a narrow channel through the diamond's crystal lattice. The channel, generally between approximately 0.02 and 0.05 mm in diameter, is directed from the nearest facet or girdle surface toward a dark inclusion such as a black carbon crystal or a heavily included feather. Once the channel reaches the inclusion, the stone is immersed in a strong acid solution — commonly hydrochloric or sulphuric acid — which travels along the channel and chemically bleaches or dissolves the offending material, rendering it colourless or significantly less visible to the unaided eye.

The resulting drill channel is itself a permanent feature of the stone. Under 10× magnification it appears as a thin, straight or slightly curved tube, often with a small surface opening visible on the facet from which drilling commenced. Grading laboratories routinely identify these channels, and their presence is noted on laboratory reports. The Gemological Institute of America, for instance, will grade a laser-drilled diamond but annotates the report accordingly, and the clarity grade assigned reflects the stone's appearance after treatment rather than its natural clarity prior to drilling.

Distinction from KM Treatment and Internal Laser Drilling

It is important to distinguish conventional laser drilling — covered by Code L — from a related but technically different procedure sometimes called KM treatment (after the Israeli firm Kiduah Meyuhad, meaning "special drilling") or internal laser drilling. In the KM process, the laser is used to create a series of fractures that radiate outward from a dark inclusion, effectively connecting the inclusion to an existing feather or creating a new fracture network that reaches the surface. Acid can then penetrate via these fractures rather than through a single drilled channel. The resulting features resemble natural fractures under magnification and are consequently more difficult to detect than a conventional drill hole.

Because KM-treated stones can be harder to identify and may be mistaken for naturally included diamonds, the trade and grading laboratories treat them with particular scrutiny. The GIA classifies KM treatment separately from conventional laser drilling on its grading reports. Within the AGTA disclosure framework, both procedures fall under the obligation to disclose, though the precise coding and descriptive language may differ between laboratories and trade bodies. Buyers and dealers should request explicit written disclosure specifying which form of laser treatment has been applied.

Permanence and Stability

Laser drilling is considered a permanent treatment in the sense that the physical channel cannot be removed without damaging the stone. The improvement in apparent clarity is stable under normal wearing conditions; the bleached inclusion does not revert to its original colour. However, the open channel presents a minor practical concern: over time, the drill hole may accumulate oils, lotions, or particulate matter from everyday wear, causing it to appear more visible than it did when the stone was freshly treated. Routine ultrasonic cleaning or steam cleaning will generally clear such deposits, though care should be taken with ultrasonic cleaning on stones that have additional fractures, as the vibration may propagate existing damage.

The channel itself does not meaningfully compromise the structural integrity of the diamond in most cases, given the extreme hardness and toughness of the material and the small diameter of the bore. Nevertheless, a drill hole that intersects a pre-existing fracture could theoretically weaken that area, and this is a factor that experienced graders consider when assessing overall durability.

Dreaming of a custom diamond engagement ring? Our Toronto, Canada workshop builds it around a diamond you choose.

Market Implications and Pricing

Laser-drilled diamonds trade at substantial discounts relative to non-drilled stones of comparable apparent clarity. Market data consistently places this discount in the range of 30 to 60 per cent, with the precise figure depending on the number of drill holes, their visibility, the overall clarity grade of the treated stone, and current market sentiment. A stone that required extensive drilling to reach an acceptable apparent clarity grade will typically command a deeper discount than one in which a single, minimally visible channel addressed a single inclusion.

The commercial rationale for laser drilling is straightforward: a diamond that would otherwise be graded I₁ or I₂ due to a prominent dark inclusion may, after treatment, present a cleaner face-up appearance, potentially supporting a higher apparent clarity grade. The treatment therefore allows stones that might otherwise be difficult to sell to enter the mainstream market. For budget-conscious buyers who prioritise face-up appearance over untreated status, a laser-drilled diamond can represent reasonable value, provided full disclosure has been made and the price reflects the treatment.

Conversely, laser-drilled diamonds are generally considered unsuitable for investment purposes, and major auction houses typically decline to offer them as significant lots. The treatment is also incompatible with certain certification programmes that require stones to be free of clarity enhancements.

See our diamonds with Canada's coloured-gemstone specialists — Toronto, since 1967.

Disclosure Requirements

The AGTA's enhancement-disclosure policy requires that Code L be communicated to the buyer at every level of the trade — from cutter to wholesaler, wholesaler to retailer, and retailer to consumer. This obligation is not merely an industry convention; in many jurisdictions it carries legal weight under consumer-protection statutes that prohibit material misrepresentation in commercial transactions. The Federal Trade Commission's Guides for the Jewelry, Precious Metals, and Pewter Industries in the United States similarly require disclosure of treatments that affect value.

In practice, disclosure is typically conveyed through laboratory grading reports, invoices, and point-of-sale documentation. A grading report from the GIA, International Gemological Institute (IGI), or other recognised laboratory will note the presence of laser drilling in the comments section and may affect the clarity grade assigned. Dealers who knowingly sell laser-drilled diamonds without disclosure expose themselves to legal liability and reputational damage within the trade.

Detection

Identification of laser-drilled diamonds is within the competence of any trained gemmologist equipped with a standard 10× loupe or binocular microscope. The characteristic features to look for include:

• A straight or gently curved tubular channel, often with a slightly reflective interior, running from a facet surface toward an inclusion.
• A small circular or oval opening on the surface facet, sometimes surrounded by minor surface damage from the laser entry point.
• A bleached or whitened inclusion at the terminus of the channel, which may appear as a faint ghost of its original form.
• In KM-treated stones, irregular fracture planes radiating from the inclusion site, resembling natural feathers but with an atypically regular or geometric character upon close examination.

Fibre-optic illumination and darkfield microscopy significantly aid detection by highlighting the reflective channel walls. Experienced graders at major laboratories will also use photomicrography to document the features for the grading report.

Further Reading

• AGTA Gemstone Enhancement Disclosure Policy — agta.org
• GIA Diamond Clarity — gia.edu
• Gems & Gemology: Laser Drilling of Diamonds — gia.edu