US sanctions on Myanmar gems target key junta funding source

U.S. sanctions on Myanma Gems Enterprise target an army-controlled business rife with corruption and abuses that is one of the junta’s key sources of revenue

Via AP news wire
Friday 09 April 2021 10:42
Myanmar Gems Trade
Myanmar Gems Trade

The latest U.S. sanctions on Myanmar target an army-controlled gems business rife with corruption and abuses that is one of the junta’s key sources of revenue.

It’s unclear if the sanctions will do much to close the taps of income and royalties from gems sales. Some estimates say more than half of such transactions are not declared, even though it is the country's second biggest export after natural gas and oil.

The rights group Justice for Myanmar on Friday urged the U.S. government to expand penalties to include the Myanmar Oil & Gas Enterprise, which handles the country’s largest share of exports.

“It is imperative that other countries follow suit in sanctioning the key businesses enabling the Myanmar military’s criminal conduct,” said the group's spokesperson, Yadanar Maung.

The most recent report from the Extractive Industries Transparency Initiative for 2016-17, found that gems, pearls and jade accounted for 13% of Myanmar's natural resource revenues, with oil and gas accounting for 87%.

The sanctions announced Thursday freeze any assets the Myanma Gems Enterprise holds in the U.S. or in U.S. jurisdictions and bar American citizens from doing business with it.

The company oversees all gemstone activities in Myanmar, also known as Burma, the Treasury Department said in announcing the latest sanctions against the military leaders who seized power in a Feb. 1 coup.

That includes control of permits for mines, collecting royalties, and oversees marketing and sales.

The gems trade is important enough that coup leader Senior Gen. Min Aung Hlaing and Myanmar’s central bank governor were among the dignitaries who visited the opening of an annual gems, pearls and jade emporium earlier this month in the capital, Naypyitaw.

State media reports showed a uniformed Min Aung Hlaing and other military leaders striding through a hall of the emporium.

The U.S. and other governments have been ramping up sanctions in response to the coup and a deadly crackdown on mass pro-democracy protests. Earlier, the administration of President Joe Biden sanctioned Myanmar Ruby Enterprise, Myanmar Imperial Jade Co., and Cancri (Gems and Jewellery) Co. — other military-controlled traders of gems and other precious stones.

The Treasury announcement noted that the sanctions were not intended to penalize Myanmar citizens, in particular artisanal miners who depend on gem sales to survive.

The state-controlled newspaper Global New Light of Myanmar reported that 405 out of 450 lots of jade had been sold by April 7 for 3.5 billion kyats ($2.4 million).

Separately, it said 317 lots of pearls worth 1.43 billion kyats ($1 million) were sold during the first three days of the gems emporium that runs from April 1-10.

Official statistics on the gems trade in Myanmar, one of the top sources of jade and rubies, are scarce but previous emporiums netted hundreds of millions of dollars in sales. The sales are usually held three times a year.

The U.S. banned imports of jade and other precious stones from 2008-2016, following a previous crackdown on pro-democracy protests. The sanctions were relaxed after military leaders began a transition to a quasi-civilian, popularly elected government in 2011.

Thailand and China both countries that have not imposed sanctions on Myanmar's junta, are the main markets for its rubies and jade. But gems often pass through many hands before reaching markets in Europe and the U.S., making tracing their provenance difficult, according to a report by the Natural Resource Governance Institute, an independent research and advocacy institute that monitors resource-rich countries like Myanmar.

The best rubies, known as pigeon's blood for their deep crimson color, are often sourced in Mogok, a mining region in northern Myanmar. The report said the military controls the mining in both Mogok and in Mong Hsu, another importance source of gems, but an unknown share of the gems is smuggled into China, especially through the border town of Ruili, which has a big jade and gems market.

The trade involves perils, especially for those working on the fringes of the big mines. Jade, especially, is mined with heavy equipment that leaves small pieces in tailings that are piled into huge mounds. Such slopes often collapse, burying people who settle near the mounds to scavenge for the scraps.