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Congress Passes Burma Act

Congress Passes Burma Act

The U.S. House and Senate passed legislation Tuesday that bans the import of all Burmese jade and ruby into the United States.

Called the “Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008,” the bill will specifically prohibit importation of jadeite and ruby, “mined or extracted,” from Burma, including articles of jewelry set with Burmese jade or ruby. … The President shall prohibit the importation into the United States of any Burmese covered article.”

The bill awaits the signature of president Bush.

“In essence, this act closes the loophole that allowed stones to be recut outside of Burma and no longer be considered as “Burmese origin” when imported,” said Chris Smith, vice president of the American Gemological Laboratories. “The bill now states that it is the intrinsic quality of the ruby/jadeite, as well as the geologic origination within Burma that accounts for the majority of the value, as opposed to the cutting and polishing.

“There are distinct time-frames and obligations that are intrinsic to this Bill,” Smith added. “There are provisions for what constitutes ‘non-Burmese origin’ goods, as well as ‘Burmese origin’ goods that can be exempt from this ban however they have taken significant steps to make the importation of these goods more difficult.”

“There are no provisions in this Bill that limit ‘our’ or any labs ability to determine origin, or require any action that must be taken if we conclude that a ruby is from Burma,” states Smith. “The onus is on the owner/importer to validate that such a stone would be exempt from the ban and have been imported legally into the US if they were to be investigated.”

As written in the bill, importers are responsible for documentation “with respect to exportation from the country of jadeite or rubies in rough form, a system of verifiable controls on the jadeite or rubies from mine to exportation demonstrating that the jadeite or rubies were not mined or extracted from Burma, and accompanied by officially-validated documentation certifying the country from which the jadeite or rubies were mined or extracted, total carat weight, and value of the jadeite or rubies.”

The same holds true for finished gems and jewelry set with Burmese jadeite or ruby.

“With respect to exportation from the country of articles of jewelry containing jadeite or rubies, a system of verifiable controls on the jadeite or rubies from mine to the place of final finishing of the article of jewelry containing jadeite or rubies demonstrating that the jadeite or rubies were not mined or extracted from Burma, and accompanied by officially-validated documentation certifying the country from which the jadeite or rubies were mined or extracted.”

While not specifically mentioned in the text of the bill, Thailand jewelry manufacturers and gem cutters should certainly take notice that the trade of Burmese (Mogok as well as Mong Hsu) rubies and jadeite-set jewelry will most certainly be affected. In order to import any other ruby or jade gems or jewelry, the bill states that one must have “verifiable recordkeeping by all entities and individuals engaged in mining, importation, and exportation of non-Burmese covered articles in the country, and subject to inspection and verification by authorized authorities of the government of the country in accordance with applicable law.”

“The Bill will be sent to the president very quickly,” said Michael Haynes of Collector’s Universe, the NASDAQ traded parent company of American Gemological Laboratories. “This could be law in two to three weeks.” Haynes notes that even after the president signs the bill, there will be regulatory steps to work through, and could take several months in order to get regulations prepared, although specific instruction from the White House could increase or decrease the speed of such implementation.

As the bill notes, it is intended to be in force within 60 days of a presidential signature. Will this or can this happen are the questions at hand. Cecilia Gardner, president, CEO and general counsel of the Jewelers Vigilance Committee, said it appears that the government will need another Kimberley type process in order to trace country of origin. Gardner is anticipating JVC involvement in that respect.

“We look forward to working with government agencies to find practical ways to enforce this new law,” Gardner said.
 
“In 2006, the Burmese regime earned more than $500 million from oil and gas projects, over $500 million from sale of hardwoods, and in excess of $300 million from the sale of rubies and jade,” according to the bill. “At least $500 million of the $2.16 billion earned in 2006 from Burma’s two natural gas pipelines, one of which is 28 percent owned by a United States company, went to the Burmese regime. The regime has earned smaller amounts from oil and gas exploration and non-operational pipelines but United States investors are not involved in those transactions. Industry sources estimate that over $100 million annually in Burmese rubies and jade enters the United States.”

“The Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008 will restrict the importation of jade into the U.S. through other countries, one of the most lucrative sources of profit for the junta,” said Sen. Mitch McConnell (R-Ky.).

The bill is named in honor of the late Democratic congressman Tom Lantos (1928-2008), former chairman of the House Committee on Foreign Affairs and one of the country’s leading champions of human rights.

As a gemological note, nowhere in the bill does it mention Burmese sapphire, peridot, spinel, or any other gem materials besides jadeite and ruby. So while these could be added in the regulatory process, without industry input, it is questionable that these gems will be included in the Block Burmese JADE Act.

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