Understanding the Burma Embargo

Published April 2009

By Richard B. Drucker, GG and Stuart M. Robertson, GG

The Burma Embargo is in full force and is “law” meaning the trade must comply. Ironically, the embargo only applies to jade and rubies; other Burma gems are exempt. Forms and paperwork are required and not all the questions are easily answered. Cecilia Gardner, President, CEO & General Counsel for the Jewelers Vigilance Committee hosted an informational presentation on the “The Tom Lantos Block Burmese JADE Act of 2008.” The program was offered in cooperation with the AGTA and JA and was presented during the AGTA GemFair’s education track.

In addition to Gardner, Virginia McPherson of the U.S. Customs and Border Protection Agency made a presentation to the audience. During her remarks, McPherson cleared up several misconceptions about the Lantos bill. Most specifically, every piece of jadeite and ruby from Burma not already in the U.S. by the effective date of the law is prohibited. This applies even to pieces acquired for personal use. However, there is currently no mechanism in place for enforcing the ban as it relates to personal use items, therefore, they are not prevented from coming into the country. However, the agency has a strict view of what constitutes personal use. Using it as a loophole to bypass the prohibition is a recipe for trouble, a point made several times during the program. (Note: Richard Drucker and Stuart Robertson, in their “Best Buys” talk at the AGTA GemFair, mentioned the Burma ban and incorrectly stated that stones brought in for personal use, were exempt. They are not exempt, but it is one area where enforcement is difficult, illustrating the confusion that exists regarding this bill.)

This prohibition applies to any ruby or jadeite of Burmese origin not previously in the U.S. before the embargo and not imported for personal use. This includes rough, cut or jewelry. The Customs Service will confiscate said contraband. The appropriate tariff codes for ruby and jadeite are 7103, 7113 and 7116.  The entire bill can be viewed at the JVC website; www.jvclegal.org.

Gardner thoroughly explained the certification requirements for the trade. As can be expected, the mood of the audience was generally unhappy with the law. Those voicing an opinion felt it served no purpose regarding improving conditions in Burma. The AGTA’s Executive Director Doug Hucker reminded member firms that, “No, it isn’t a perfect law. But it is the law and so the AGTA position is one of advocating compliance.” Complaints about the law’s purpose should be directed at the legislators that wrote it and not the AGTA, JVC or the Customs service, Ms. Gardner reminded the attendees.

Importers bringing ruby or jadeite rough, polished or jewelry containing these materials into the U.S. are required to have a written certification signed by the exporter that states that the articles or component parts were not extracted from Burma. This statement must appear on the invoice or supplemental document. The certification statement must also be based on verifiable evidence. This provision is critical. Verifiable evidence can include an invoice from the original supplier that designates a non-Burmese origin, etc. Although this document is not required to be shown to customs agents, the documents may be requested up to five years after the date of import. Therefore, to avoid future problems, it is recommended that the importer obtain and retain for five years a statement indicating that the materials are not Burmese in origin from their overseas supplier at the time of purchase. If the overseas supplier is to retain these documents, it is important that the importer reiterate the importance of retaining these documents for the prescribed five-year period. Members of the audience familiar with buying in Burma and other isolated mining areas pointed out the reality of expecting a receipt or other detailed document from a seller in the middle of nowhere.

Although sympathetic, Gardner cautioned dealers not to ignore the record keeping obligation. Four or five years later is not the time to start trying to obtain the “verifiable evidence” pertaining to the source and movement of the material. A little good planning now will avoid potential problems down the road. The importer meets the obligation by using one of the appropriate tariff codes, supported by a written certification from the exporter declaring that the materials are not Burmese in origin. Again, proof may be requested.

The big question that dealers had concerned whether or not they can take pre-ban Burmese gem material overseas to shows and bring it back into the U.S. The answer McPherson provided was a qualified yes, assuming that the dealer files Form 4455 to register those good with the Customs Service before exporting them. However, while that material is out of the country, it may not be advanced in anyway, i.e., cut, re-cut, mounted, etc., or they will become subject to the regulations of the Lantos bill.

Another area of concern for dealers involves estate pieces that may be obtained in overseas markets but clearly existed before the Bill took effect. McPherson cautioned that only antiques (defined as 100 years or older) were exempted by the mere age. Estate or period pieces not meeting this age definition are subject to the prohibition.

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