The U.S. Department of the Treasury has indicated it’s getting serious on sanctions against Burmese gems, warning that gem dealers should conduct “enhanced due diligence” to ensure the colored stones they buy aren’t from Burma.
The country is known for producing rubies and jade, but it also produces sapphires and other gems.
If they don’t, the U.S. Treasury’s advisory on Burma warned, dealers may be at risk for violating U.S. sanctions. Just about all of the Burmese gem industry has been under U.S. Treasury sanctions ever since the military took over in a coup last year.
“Gem, pearl, and precious metal importers [should] undertake enhanced due diligence to better understand their supply chains and to ensure they are not sourcing from or brokering through military-owned or -operated entities, even if their supply chain seems to be completely outside of Burma,” said the advisory, issued Wednesday.
“A supply chain that, on paper, does not refer to or otherwise appear to touch Burma may still involve links in which the military is the ultimate beneficiary,” it continued.
“Jade, rubies, and sapphires from Burma have been previously smuggled into countries like China and Thailand to be cut and sold on the international markets as ‘made in Thailand,’ or ‘made in Hong Kong’, and most lab-test certificates do not often show which company profited from their sale.”
It concludes: “It is the responsibility of businesses and individuals to ensure their sourcing is consistent with what is being reported from vendors and suppliers to avoid potential liability for sanctions violation.”
The U.S. Treasury advisory calls the gems and precious metals sectors “one of the areas of greatest concern” within Burma, noting that “gems and precious metals generate billions of dollars of exports in Burma’s economy and accounted for nearly half of the country’s [gross domestic product] in 2015,” which it calls “the last year for which credible data is available.”
Sara Yood, deputy general counsel of the Jewelers Vigilance Committee, tells JCK: “This statement from the Treasury Department should be unsurprising to anyone who has been paying attention to the violent coup and military takeover in Burma, which displaced the democratically elected government and resulted in the murder of over 1,000 Burmese citizens.
“The Treasury Department has issued a number of sanctions on various military leaders and military-controlled entities in Burma based on the evidence they have gathered, which have effectively made direct gem trade with the U.S. impossible,” she continues. “This guidance further shows the heightened risk of trading colored gemstones and precious metals generally, and the importance for U.S. companies to conduct enhanced due diligence on their color gemstone supply chains to ensure that their supply chains do not include Burmese origin products. U.S. businesses can achieve this by ensuring they have a robust and active AML program, following the OECD due diligence guidance for responsible supply chains, and scrutinizing their suppliers to ensure they are not unknowingly purchasing newly acquired Burmese goods.”
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