Myanmar Declines ASEAN Leadership; Bush Renews Ban on its Products


July 28, 2005

Myanmar Declines ASEAN Leadership; Bush Renews Ban on its Products

After the United States and the European Union put intense political pressure on the Association of Southeast Asian Nations, Myanmar declined its scheduled turn to assume the group's chairmanship on July 26. Myanmar, which has a poor human rights record, is an important source of rubies, sapphires, jadeite jade and other gems. The U.S. banned all products from Myanmar in 2003 to protest its government policies and on July 27, President George W. Bush renewed the law for another year. Under the legislation, the import ban must be renewed each year and expires after three years.

In a rotating chairmanship system, Myanmar was slated to assume leadership of the ASEAN economic block in 2006. The announcement came in the form of a joint statement by the foreign ministers of the nations that make up the ASEAN membership, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. They were in the midst of a six-day meeting in Laos. Myanmar Foreign Minister U. Nyan Win noted his country preferred to focus attention on its internal problems and rededicate itself to a national reconciliation and democratization process.

The U.S. and EU support Myanmar's democracy movement, led by Aung San Suu Kyi, leader of the National League for Democracy in Myanmar. The Myanmar government has kept Suu Kyi under house arrest and in prison for most of the past two decades, despite her election to lead the country in 1990.

The Burmese Freedom & Democracy Act, originally passed by the U.S. Congress in 2003, bans imports of any product of Myanmar. But a December 2004 ruling from U.S. Customs & Border Protection created a loophole in BFDA when it stated rubies mined in Myanmar undergo "substantial transformation" when they are cut and polished in other countries and are, therefore, considered products of the country in which the cutting took place. Since most Myanmar gems are cut elsewhere, this makes many gems exempt from the ban on products from Myanmar.

Some American jewelers, such as Tiffany & Co., have expressed continued support for the U.S. sanctions despite the loophole, and have publicly stated they will not sell gemstones with known Myanmar origins regardless of where they're cut. "We believe the right thing to do is continue our moratorium," says Michael J. Kowalski, Tiffany chairman and CEO. "Despite the Customs ruling, mining of these gems supports the existing Burmese regime. We support democratic reforms and an end to human rights abuses in that country. We believe our customers would agree with that position."

by Peggy Jo Donahue

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