Customs clarifies rules on banned Burmese gems

http://www.nationaljewelernetwork.com/njn/content_display/colored-stones/color-market-reports/e3ieb36f849687dcd17c00c374ec2a4503c


The Burma Task Force, composed of the Jewelers Vigilance Committee, the American Gem Trade Association and Jewelers of America, have issued a press release that provides guidance on the steps importers and exporters must follow to import non-Burmese rubies and jadeite.
January 26, 2009


New York--The U.S. Customs Department has issued a set of more specific regulations for ruby and jadeite importers, including requirements that the companies obtain exporter certification and evidence of tracking, to ensure they are complying with a law banning the importation of Burmese rubies and jadeite into the United States.

In September 2008, the Tom Lantos Block Burmese JADE Act of 2008 became law, specifying that all rubies and jadeite originally from Myanmar (formerly called Burma), including jewelry containing those gemstones, be banned from the United States, even if the gemstones had been "substantially transformed" in a third-party nation.

The act was an effort by U.S. lawmakers to encourage democratic reforms in Myanmar, where the ruling military junta--which profits from state-run gemstone auctions--has a long history of human rights violations.

After the act passed, there were some lingering questions among gem dealers regarding how the law would be enforced and how companies could comply. On Jan. 16, 2009, Customs issued updated regulations addressing "conditions for importation" of Burmese and non-Burmese rubies and jadeite.



Burmese rubies and jadeite that were in the United States prior to Sept. 27, 2008, and items imported for personal use are exempt.

After reviewing the revamped Customs regulations, The Burma Task Force, composed of the Jewelers Vigilance Committee (JVC), the American Gem Trade Association (AGTA) and Jewelers of America (JA), issued a press release that provides guidance on the steps importers and exporters must follow to import non-Burmese rubies and jadeite.

"We look forward to assisting the trade to fully comply with the previsions of this law," said Cecilia L. Gardner, JVC's president, chief executive officer and general counsel, in a media release.

The guidance from The Burma Task Force is as follows:

Importer obligations: Under the new regulations, importers are still required to certify that their rubies and jadeite were not mined or extracted from Myanmar. The importer certification is created through the use of new Harmonized Tariff Codes.

Exporters must ensure that Burmese rubies and jadeite are not intermingled with non-Burmese-origin rubies and jadeite. Importers must secure a written certification from the exporter stating that the rubies and jadeite were not mined or extracted from Myanmar.

The exporter must also provide "verifiable evidence" that tracks rough stones from mine to place of first export, polished loose gems from mine to place of final finishing, and finished jewelry from mine to place of final finishing of the jewelry.

Exceptions to these provisions include the re-importation of rubies, jadeite or jewelry containing either that were in the United States prior to Sept. 27, 2008, but only if those materials were re-imported by the same entity or person who exported them originally from the United States and as long as their value has not increased. Another exception applies to rubies, jadeite or jewelry containing either that was re-imported for personal use.

Recordkeeping obligations: Importers of non-Burmese rubies and jadeite must maintain records of each transaction for five years. These records include complete information regarding purchase, manufacture or shipment of covered articles and the exporter's certification. Importers are required to produce such records to Customs upon demand.

This includes maintaining the exporter certification and the statement regarding "verifiable evidence" indicating the source of rough, polished or finished jewelry, depending on which was imported.

Verifiable evidence could be an exporter's warranty stating the country of origin of the covered articles, the place in which they were polished and the place where they were manufactured into jewelry. Such a warranty should also include a statement that the exporter has available records that corroborate the statement in the warranty.

Importers and exporters are required to name on the invoice a "responsible employee" of the exporter who has or can obtain knowledge of the transactions. The information that this employee should have access to includes the verifiable evidence of the source and movement of the covered articles.

Industry leaders say the new information from Customs should clear up many of the questions surrounding the Lantos act.

"The guidance created by the Burma Task Force reflects the culmination of a tremendous amount of work and cooperation between jewelry industry representatives and the U.S. government," AGTA Chief Executive Officer Douglas Hucker said in the release. "It will certainly help to clear up a lot of the anxiety we had about complying with the act. We look forward to introducing this guidance at the AGTA GemFair in Tucson. AGTA is eager to communicate this important information to our members and to help them to be in compliance with this important legislation."

JA also praised the clarifications from Customs.

"Jewelers of America welcomes the government's amended Burmese gem regulations, which further clarify importers' obligations and place new responsibilities on exporters," JA President and Chief Executive Officer Matthew Runci said in the release. "We will ensure that our members are fully aware of the new requirements."

For those seeking further information, the JVC, AGTA and JA will present a seminar titled "Burma and Beyond--Operating Your Business in Today's New Regulatory Environment" at the AGTA GemFair in Tucson on Feb. 7. This seminar can help importers and exporters avoid interruptions in international business and will ensure they understand their legal obligations in this seemingly complex area. An international trade specialist from U.S. Customs and Border Protection will be present to answer questions, and written resources will be available.

The AGTA GemFair seminar will take place in the Mohave Room at 11:00 a.m. Registration is not required but space is limited. E-mail AGTA's Adam Graham at adam@agta.org or the JVC's Amy Greenbaum at amy@jvclegal.org with questions.

Visit the JVC's Web site, JVCLegal.org, for an explanation of the Jan. 16 regulations and other important legal-compliance information, products and services.