September/October 2003 • Style: The Alchemy of Beauty • Selling: Living the Online Dream • Sources: Sparkle in Peace • Fall Show Guide Exhibitor Lists and Floorplans • Books: Tahitian Pearl • News & Updates • In This Issue

U.S. Bans Myanmar Imports
By Marlene A. Prost

The United States has banned imports of anything and everything from Myanmar -- including gemstones.

It's hard to disagree with the United States' goals in pressuring the military regime in Myanmar (formerly Burma) to move toward democracy. But Congress' recent embargo on all Myanmar imports could have a dire effect on the colored stone industry in the United States.

The Burmese Freedom and Democracy Act, which took effect on August 28, bans for one year the importation of any article produced, mined, manufactured, grown, or assembled in Myanmar. The embargo is meant to pressure the ruling junta, called the State Law and Order Restoration Council (SLORC), to free opposition leader Aung San Suu Kyi and institute democratic reforms.

Colored stones are far from the biggest Burmese import; the ban will have a more significant impact on textiles, lumber, and other products. But it will deplete gemstone inventories in the United States and drive up prices. And it pretty much means an end to the U.S. trade in jadeite jade, most of which comes from Myanmar, as well as a loss in ruby, sapphire, peridot, natural pearl, and spinel.

"Pretty much the jadeite trade is finished now. For fine jade, really Burma is the only game in town," says Richard Hughes of Pala International. Perhaps 90 percent of the fine rubies in the United States come from the Mong Hsu deposit in Myanmar, while another 5 percent comes from the Mogok mine, he adds.

The embargo also covers gems that are imported from Thailand after cutting and treating. Material that left Myanmar before August 28, however, is exempt and can be legally traded.

"Our understanding is it doesn't matter where they're processed," says Douglas Hucker, executive director of the American Gem Trade Association (AGTA). The AGTA is now trying to find out what government regulators, such as customs officers, need in terms of paperwork. For example, does it make any difference if the point of origin is Europe or Hong Kong? "It's pretty clear in the law, it says Burmese products, but we want clarity," Hucker says.

"I suspect we will see an increase in the price for goods," he adds, noting that retailers are reporting anecdotally that prices are rising.

Some dealers are objecting to the ban on gemstones; they argue that it is not fair to ban imports from Thailand, and that the ban ultimately hurts innocent Myanmar citizens who oppose the regime.

"While Burma's gem mines are nominally under the control of the military, the very nature of gem mining means that the lion's share of production is smuggled out by freebooters," Hughes says. "Funds from these smuggled goods sustain both ordinary miners and traders, as well as rebel armies fighting against the Burmese military."

Congress will find it hard to lift the embargo next year, Hughes predicts; the military regime is not likely to give in to the economic pressure. "The way this act is written, it will take an act of God to remove the embargo. It's like saying we will lift sanctions when Castro steps down."

Nor will the embargo stop the flow of smuggled gems or prevent unscrupulous dealers from getting hold of material anyway.

"Those in the rock trade lacking scruples will just roll with business as usual," says Hughes. "The Burmese gems they import will come in as Thai, Sri Lankan, Indian, or other origin. The honest among us will simply stop selling Burmese gems. And the customs agents who can tell the difference will decide not to rock the good ship of foreign trade."

Ultimately, individual retailers will just stop handling the stones, he predicted. "Down the road, when stocks are down, how will a jeweler explain that these stones are Burmese and they're banned?"

Posted: September 17, 2003