Report to Congressional Committees

United States Government Accountability Office

GAO 

INTERNATIONAL 

TRADE 

U.S. Agencies Have 

Taken Some Steps, 

but Serious 

Impediments Remain 

to Restricting Trade in 

Burmese Rubies and 

Jadeite 

September 2009 

GAO-09-987 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2009

INTERNATIONAL TRADE

U.S. Agencies Have Taken Some Steps, but Serious

Impediments Remain to Restricting Trade in Burmese 

Highlights of GAO-09-987, a report to Rubies and Jadeite 

congressional committees 

Congress passed the Tom Lantos 

Block Burmese JADE Act in 2008 

prohibiting the import of Burmeseorigin jadeite, rubies, and related 

jewelry and calling for certain 

international actions. The act also 

requires GAO to assess the 

effectiveness of the 

implementation of this section of 

the act. 

This report assesses (1) key 

characteristics of the trade of 

Burmese-origin jadeite and rubies; 

(2) progress agencies have made to 

restrict imports of Burmese-origin 

jadeite, rubies, and related jewelry; 

and (3) the progress agencies have 

made in pursuing international 

actions. 

GAO reviewed and analyzed policy 

guidance, reports, and trade data 

and interviewed officials from the 

Departments of State (State), 

Homeland Security (DHS), other 

U.S. agencies, as well as U.S. and 

foreign jewelry industry 

representatives and foreign 

government officials. 

What GAO Recommends

GAO recommends that DHS, in 

consultation with relevant 

agencies, take additional steps to 

issue guidance regarding imports of 

non-Burmese-origin goods, and that 

State, in consultation with DHS and 

the Department of the Treasury, 

analyze JADE Act measures and 

challenges and report to Congress 

how such measures contribute to 

its efforts to exert influence on the 

Burmese regime. 

DHS concurred with our first 

recommendation and State 

concurred with our second 

recommendation. 

The Burmese jadeite and ruby trades are very different from one another and 

significantly involve China and Thailand. Burmese-origin jadeite is primarily 

purchased, processed, and consumed by China. Burmese-origin rubies are 

reportedly largely smuggled into Thailand, yielding little revenue to the 

Burmese regime, and are significantly processed there. 

U.S. agencies have taken some steps but have not shown that they are 

effectively restricting imports of Burmese-origin rubies, jadeite, and related 

jewelry while allowing imports of non-Burmese-origin goods. Some U.S. 

jewelry representatives said import restrictions constrain legitimate ruby 

imports. Agencies published an interim final rule, but DHS has not developed 

specific audit guidance or conducted any postentry reviews of importers’ 

records. In addition, there is little guidance to importers on what constitutes 

verifiable evidence of non-Burmese-origin. Although agencies have begun to 

collect data on ruby and jadeite imports, further efforts could contribute to an 

understanding of whether restrictions are effectively targeting Burmese-origin 

imports. 

Agencies sent a required 60-day report to Congress, but it had little 

information on progress and challenges related to gaining international 

support to prevent trade in Burmese-origin rubies, jadeite, and related jewelry. 

Agencies have made no discernible progress in gaining such international 

support. Strong support and the cooperation of China and Thailand are 

important to restrict trade in these items, but highly unlikely. The Office of the 

United States Trade Representative has not requested a World Trade 

Organization waiver and State has not introduced a United Nations resolution, 

noting a number of countries would likely oppose a resolution. Finally, there 

have been no international meetings to negotiate a global arrangement 

restricting trade in Burmese rubies and jadeite similar to the Kimberley 

Process for restricting trade in conflict diamonds. Agency officials cited 

serious impediments to establishing such a framework. 

Colored Gemstone Jewelry, Including Ruby and Jadeite Jewelry, for Sale in Rangoon, Burma 

Source: GAO.

View GAO-09-987 or key components.

For more information, contact Loren Yager at 

(202) 512-4347 or yagerl@gao.gov. 
 International Trade

Contents 

Letter 1

Background 2

The Burmese Jadeite and Ruby Trades Are Distinctly Different, and 

Significantly Involve China and Thailand 5 

U.S. Agencies Have Taken Steps to Prohibit Imports of BurmeseOrigin Rubies, Jadeite, and Related Jewelry, but Have Not 

Shown That They Are Effectively Targeting These Imports 12 

U.S. Agencies Have Made No Discernible Progress in Gaining 

International Support to Prevent Global Trade in Burmese 

Gemstones 19 

Conclusions 25 

Recommendations for Executive Action 26 

Agency Comments and Our Evaluation 26 

Appendix I Objectives, Scope, and Methodology 29 

Appendix II Modification of Chapter 71 of the Harmonized 

Tariff Schedule of the United States 31 

Appendix III DHS Data on Exporter-Reported Imports of NonBurmese Rubies, Jadeite, and Related Jewelry 33 

Appendix IV United States Geological Survey Estimates of Ruby 

Production 2000-2005 (by Weight Measured in 

Kilograms) 36 

Appendix V Comments from the Department of Homeland 

Security 37 

Appendix VI Comments from the Department of Commerce 39 

Page i GAO-09-987 
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Appendix VII Comments from the Department of State 41 

Appendix VIII GAO Contact and Staff Acknowledgments 43 

Tables 

Table 1: Top 10 Exporters of Reportedly Non-Burmese Rubies, 

Jadeite, and Related Jewelry to the United States from 

October 2008 to May 2009 17 

Table 2: DHS Data on Exporter-Reported Imports of Non-Burmese 

Rubies, Jadeite, and Related Jewelry into the United 

States, October 2008-May 2009 33 

Figures 

Figure 1: Colored Gemstone Jewelry, Including Ruby and Jadeite 

Jewelry, for Sale in Rangoon, Burma 4 

Figure 2: Major Jadeite and Ruby Mining Areas in Burma 6 

Figure 3: White Jadeite Statues, for Sale in Rangoon, Burma 7 

Figure 4: Jadeite Bracelets 8 

Figure 5: Processed and Finished Burmese-Origin Rubies for Sale 

in Thailand 9 

Figure 6: Transformation of Rough Burmese-Origin Ruby into 

Finished Thai Ruby 10 

Figure 7: A “Painting” Composed Primarily of Green Jadeite and 

Other Colored Gemstones Glued to Canvas, for Sale in 

Rangoon, Burma 24 

Page ii GAO-09-987 
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Abbreviations 

CBP U.S. Customs and Border Protection 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

HTS Harmonized Tariff Schedule 

JADE Junta’s Anti-Democratic Efforts 

KPCS Kimberley Process Certification Scheme 

UN United Nations 

USGS United States Geological Survey 

USTR United States Trade Representative 

WTO World Trade Organization 

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Page iii GAO-09-987 
United States Government Accountability Office

Washington, DC 20548 

 

September 30, 2009 

The ruling military regime in Burma routinely restricts freedom of speech, 

religion, and movement, and commits other serious human rights 

violations against the Burmese people. Recently, the Secretary of State 

noted growing concerns about military cooperation between North Korea 

and Burma, which would be destabilizing for the region and pose a direct 

threat to Burma’s neighbors. The Burmese regime and its supporters 

reportedly finance their activities through various financial transactions 

and trade with other countries, including trade in natural resources and 

gemstones such as rubies and jadeite. 

In 2003, Congress passed the Burmese Freedom and Democracy Act, 

which banned the import of Burmese goods into the United States.1

 To 

promote a coordinated international effort to restore civilian democratic 

rule to Burma, in 2008 Congress passed the Tom Lantos Block Burmese 

JADE (Junta’s Anti-Democratic Efforts) Act of 2008 (JADE Act).2

 The act 

affirms that it is the policy of the United States to work with the 

international community—including China and Thailand—to foster 

support for the democratic aspirations of the Burmese people and to 

coordinate efforts to impose sanctions on those directly responsible for 

human rights abuses in Burma. The act has several provisions, one of 

which amends the 2003 law to prohibit the import of jadeite and rubies 

mined or extracted from Burma and jewelry containing such jadeite and 

rubies into the United States and calls on the Administration to pursue 

international actions to prevent the global trade in Burmese gemstones. 

The JADE Act also requires GAO to submit a report to Congress assessing 

the effectiveness of the implementation of this section, including any 

recommendations for improving its administration. 

Based on these provisions of the JADE Act, we examined the progress U.S. 

agencies have made in response to the act. Specifically, this report 

assesses (1) the key characteristics of the trade of Burmese-origin jadeite 

and rubies; (2) the progress U.S. agencies have made to restrict imports of 

Burmese jadeite, rubies, and related jewelry into the U.S. market; and (3) 

the progress U.S. agencies have made in pursuing international actions, 

including (a) seeking a World Trade Organization (WTO) waiver of U.S. 

 International Trade

 

1

Pub. L. No 108-61, July 28, 2003. 

2

Pub. L. No 110-286, July 29, 2008. 

Page 1 GAO-09-987 
 

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WTO obligations regarding import restrictions of the JADE Act; (b) 

securing a United Nations (UN) resolution that expresses the need to 

address trade in Burmese-origin jadeite, rubies, and related jewelry and 

calls for a workable certification scheme to prevent such trade; and (c) 

working to negotiate an international arrangement—-similar to the 

Kimberley Process (which certifies the origins of rough diamonds)–-to 

prevent such trade. 

To address these objectives, we reviewed and analyzed Presidential 

Proclamation 8294—-To Implement Amendments to the Burmese Freedom 

and Democracy Act of 2003; U.S. Customs and Border Protection (CBP) 

guidance, including 19 Code of Federal Regulations (CFR) Parts 12 and 

163—-the interim final rule; and other documents, cables, reports, and 

memos from relevant U.S. agencies. We interviewed officials from the 

Departments of State (State), Homeland Security (DHS), and the Treasury 

(Treasury), and the Office of the United States Trade Representative 

(USTR), and other agencies involved in responding to the JADE Act. We 

also met with representatives of the U.S. jewelry industry in New York. To 

gather information on the Burmese jadeite and ruby trades and the impact 

of the JADE Act on these trades, we traveled to Hong Kong, Thailand, and 

Burma and interviewed U.S. agency officials, foreign government officials, 

and representatives from the foreign jewelry industry. Appendix I provides 

more details on our objectives, scope, and methodology. 

We conducted this performance audit from December 2008 to September 

2009, in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

The military regime in Burma has routinely restricted freedom of speech, 

religion, and movement, and committed other serious human rights 

violations against the Burmese people. Prior to 1990, Burma was ruled by 

a military regime known as the State Law and Order Restoration Council. 

In May 1990, national parliamentary elections were held that resulted in an 

overwhelming victory for the National League for Democracy party, led by 

Aung San Suu Kyi. However, the State Law and Order Restoration Council 

failed to yield power and honor the results of the election and maintained 

its policies of autocratic rule and repression of democratic opposition. 

Since 1990, Burma has continued to suffer under this repressive rule; the 

Background 

Page 2 GAO-09-987 
 

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military regime has since changed its name to the State Peace and 

Development Council. The military regime in Burma has detained or held 

Aung San Suu Kyi under house arrest for the majority of the past 20 years, 

continues to imprison democratic political activists in favor of democracy, 

and commits other serious human rights violations. 

In response to the behavior of the military regime in Burma, the United 

States has taken a number of actions aimed at pressuring the regime and 

promoting democratic reform in the country. Since 1990, the U.S. Mission 

in Burma has been headed by a chargé d’affaires. In 1997, the United 

States prohibited new investment in Burma and later imposed 

countermeasures on Burma due to its inadequate measures to eliminate 

money laundering. In 2003, Congress passed the Burmese Freedom and 

Democracy Act of 2003, which required the President to ban the 

importation of any Burmese product into the United States in order to 

strengthen Burma’s democratic opposition and support the National 

League for Democracy as the legitimate representative of the Burmese 

people.3

However, despite the 2003 law, some Burmese gemstones were being cut, 

polished, and treated in third countries, such as Thailand, and exported as 

products of those third countries to the United States and other countries. 

To increase pressure on the military regime to end its human rights 

violations and restore democracy, Congress passed the JADE Act in 2008. 

Among its provisions are measures (1) imposing a ban against current and 

former leaders of the Burmese regime, their immediate family members, 

and supporters from traveling to the United States; (2) imposing targeted 

financial sanctions against those same persons; and (3) granting authority 

to the Secretary of the Treasury to impose additional banking sanctions 

against those persons. In addition, the JADE Act amends the 2003 law to 

prohibit the importation into the United States of jadeite and rubies mined 

or extracted from Burma and jewelry containing jadeite and rubies mined 

or extracted from Burma (fig. 1). It also calls on the Administration to 

pursue international actions to prevent the global trade in Burmese-origin 

gemstones. 

 

3

On July 28, 2003, the President issued Executive Order 13310, which, among other 

measures, prohibits the importation of products of Burma into the United States. 

Page 3 GAO-09-987 
 

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Figure 1: Colored Gemstone Jewelry, Including Ruby and Jadeite Jewelry, for Sale 

in Rangoon, Burma 

Source: GAO.

The JADE Act also calls on the Administration to develop an international 

arrangement—-similar to the Kimberley Process Certification Scheme 

(KPCS) for conflict diamonds4

—-to prevent global trade in Burmese-origin 

jadeite and rubies and jewelry containing Burmese-origin jadeite and 

rubies. In November 2002, diamond-producing and diamond-trading 

countries launched the KPCS, a voluntary global system to control the 

trade of rough diamonds and to assure consumers that the diamonds they 

purchase have not helped to finance violent conflicts. The United States 

and other KPCS participants are responsible for ensuring that the integrity 

of the certification scheme is upheld and that the Kimberley Process 

works toward preventing conflict diamonds from entering the legitimate 

 

4

The UN General Assembly defines conflict diamonds as rough diamonds used by rebel 

movements to finance their military activities, including attempts to undermine or 

overthrow legitimate governments. UN General Assembly Resolution 55/56 (Jan. 29, 2001). 

Page 4 GAO-09-987 
 

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trade of rough diamonds. In instances of noncompliance, KPCS can expel 

or suspend a participant.5

According to foreign jewelry industry representatives, jadeite generally is 

mined in the northern Kachin state of Burma (fig. 2), where rough jadeite 

rocks can range in size from that of a small egg up to a 1-ton boulder. 

According to agency officials and jewelry industry representatives, 

virtually all of the jadeite exported out of Burma is sold at government 

auctions in Rangoon. Jewelry industry representatives said that the vast 

majority of this jadeite is purchased by buyers from China (both the 

mainland and Hong Kong); a very small amount is bought by buyers from 

the rest of the world. 

The Burmese Jadeite 

and Ruby Trades Are 

Distinctly Different, 

and Significantly 

Involve China and 

Thailand 

Burmese-Origin Jadeite Is 

Primarily Purchased, 

Processed, and Consumed 

by China 

 

5

For example, in July 2004, the chair of KPCS expelled the Republic of Congo from 

participation because it could not account for the origin of large quantities of rough 

diamonds. 

Page 5 GAO-09-987 
 

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Figure 2: Major Jadeite and Ruby Mining Areas in Burma 

Cambodia

Laos

Vietnam

China

Thailand

India

Bangladesh

Bhutan

Rangoon

Shan 

State

Chin 

State

Rakhine 

State

Ayeyarwardy 

Division

Yangon 

Division

Tanintharyi 

Division

Bangkok

Bago Division

Kayah 

State

Mandalay 

Division

Magway 

Division

Mon 

State

Kayin 

State

Sagaing

Division

Kachin 

State

Mogok

Mong Hsu

Chiang Mai

Mae Sot

Mae Sae

Irrawaddy River

National capital

Cities where rubies are mined and extracted

Kachin State, where jadeite is mined and extracted

Mogo

ong Hsu

Naypyidaw

Burma

Burma

Vientiane

Dhaka

Chanthaburi

Sources: GAO and the United Nations.

Page 6 GAO-09-987 
 

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According to agency officials, the flow of jadeite generally goes from 

Burma to South China for processing, cutting, carving, and manufacture 

into finished jadeite products that are consumed domestically in China. 

According to foreign jewelry industry representatives, the price of jadeite 

continues to rise because the consumer demand for articles made of 

jadeite in China continues to grow. 

According to foreign jewelry industry and government officials, the 

Chinese have a long history of buying and using jade for jewelry, 

ornaments, and decorations, including statues. Jadeite, a relatively rare 

and high-quality form of jade that is believed to come mostly from Burma,6

has positive cultural significance to the Chinese. Figure 3 shows examples 

of statues carved out of white jadeite. Foreign jewelry industry 

representatives said that a widely held belief among the Chinese is that 

jadeite, including wearing jewelry made from jadeite, such as the pieces 

shown in figure 4, brings good fortune and health. 

Figure 3: White Jadeite Statues, for Sale in Rangoon, Burma 

 

Source: GAO.

6

 While the highest-quality jadeite in the world is known to come from Burma, smaller 

amounts of lower-quality jadeite can be found in Russia and Guatemala. 

Page 7 GAO-09-987 
 

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Figure 4: Jadeite Bracelets 

Source: GAO.

According to foreign jewelry industry representatives, there are millions of 

consumers of jadeite in China; Burmese jadeite products processed and 

finished in China are consumed directly by China’s internal market. 

According to estimates by these representatives, approximately 100,000 

people carve and polish jadeite in China, and as many as 3 million people 

work in the jade industry overall. 

Burmese-Origin Rubies 

Are Largely Smuggled into 

Thailand, Yielding Little 

Revenue to the Burmese 

Regime, and Are 

Significantly Processed 

There 

In contrast to jadeite, rough Burmese ruby stones are relatively small and 

thus easy to transport and smuggle. They are typically found through 

small-scale mining techniques, such as panning for stones in riverbeds, 

digging small pits or trenches, and locally quarrying ruby-bearing marble. 

The major areas for ruby mining are in Mogok and Mong Hsu in northeast 

Burma. According to U.S. agency officials, small-scale Burmese miners 

generally collect rubies and hope to avoid paying taxes to the Burmese 

government. They sell their stones to small and midlevel mom-and-pop 

operations that sell the stones at the Thailand-Burma border. Burmese 

migrants carry the stones over the border to sell to Thai traders. 

Page 8 GAO-09-987 
 

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Although some of the highest-quality rough rubies might be sold at the 

government auctions, according to foreign government and industry 

officials, most rough Burmese rubies processed in Thailand have been 

smuggled over the border and probably result in little or no revenue for 

the regime in Burma. Figure 5 shows some Burmese-origin rubies that 

have been processed and are for sale in Thailand. The very nature of 

smuggling prevents the Burmese regime from extracting much revenue 

from these stones. U.S. agency officials said that the Burmese regime 

probably derives much more revenue from gemstones (such as jadeite) 

that are almost exclusively sold at government auctions in Rangoon. 

Figure 5: Processed and Finished Burmese-Origin Rubies for Sale in Thailand 

Source: GAO.

Jewelry industry representatives told us that most rough stones found in 

Burma are of uncertain value until they are heat treated and then cut and 

polished in Thailand. Once Burmese rubies in rough form enter Thailand, 

the rubies typically find their way to Chanthaburi or Bangkok for cutting, 

heat treatment, polishing, and setting in jewelry.7

 Thai government officials 

claim that as rough Burmese rubies go through these processes, they 

 

7

Rubies can go through significant treatments before entering the marketplace, such as 

filling and heat treatment, to eliminate any irregularities and produce market-ready stones. 

Page 9 GAO-09-987 
 

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undergo substantial transformation (fig. 6), and become products of 

Thailand. 

Figure 6: Transformation of Rough Burmese-Origin Ruby into Finished Thai Ruby 

Source: GAO.

Thai officials claim that the value of a rough ruby is only 10 percent of the 

value of an average piece of finished Thai ruby jewelry exported to the 

United States. The rest is Thai value-added processing. Generally, a highquality finished Burmese ruby is known for its special character, such as 

its translucent and brilliant color scheme, known as “pigeon-blood” red. 

According to agency officials, rubies of Burmese origin have historically 

commanded a price premium that is recognized in industry price guides. 

This premium has created an incentive for traders to try to pass highquality non-Burmese stones as being of Burmese origin. 

Thai gemstone industry representatives said they are seeking to use rubies 

from non-Burmese sources such as Madagascar, Tanzania, and Kenya, but 

said that there are challenges to using stones from these sources. 

According to these representatives, Madagascar has some high-quality 

rubies, but requires that the value-added processes on these rubies be 

performed within its borders. Working with Burmese rubies is a 

competitive advantage for Thailand because it has easy access to the 

stones, the stones are generally cheaper because they are smuggled, and 

Thai traders have developed social and cultural networks with the 

Burmese ruby traders. 

Page 10 GAO-09-987 
 

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According to Thai government and jewelry industry officials, the United 

States is one of Thailand’s top five overall trading partners, and jewelry 

remains one of the top three Thai exports to the United States.8

 The United 

States and Europe are Thailand’s main export markets for finished ruby 

jewelry. Based on information from Thai jewelry industry representatives, 

in 2008 Thailand’s jewelry exports to the United States were valued at $8 

billion.9

 Also in 2008, according to these representatives, Thailand 

exported approximately $12.6 million (429 million Thai baht) worth of 

rubies to the United States. 

Thai jewelry industry representatives stated that from October to 

December 2008, Thai jewelry exports to the United States, on average, 

declined by 30 percent. Moreover, they stated that roughly 1.2 million 

Thais worked in the jewelry industry in October 2008 and estimated that 

100,000 to 120,000 jewelry industry jobs had been lost by March 2009.10

Thai jewelry industry representatives claim that these declines are due, in 

large part, to the import restrictions under the JADE Act.11

 

8

According to Thai jewelry industry representatives, the volume of Thailand’s gem and 

jewelry exports to the United States has declined due to the U.S. decision to discontinue 

Generalized System of Preferences privileges for Thailand in 2005. Thai export volume of 

gems and jewelry to the United States had negative growth of -6.63 percent and -1.14 

percent in 2006 and 2007, respectively. 

9

There are no official data specifically for ruby jewelry exports to the United States. 

10According to the results of a survey by Thai jewelry industry representatives, 50,000 to 

60,000 people lost jobs or were laid off due to the drop in gemstone sales from October 

2008 through March 2009. Since the survey went out only to association members (and not 

all Thai businesses engaged in the jewelry industry were members), the association 

estimates that the real number of jobs lost was 100,000 to 120,000. 

11Regarding the accuracy and reliability of jewelry trade information, exports to the United 

States, and employment figures provided by Thai government and jewelry industry 

officials, U.S. agency officials said that the numbers are probably on the higher end of 

estimates but give a general picture of the situation. For example, agency officials could 

not definitively say that 50,000 or 100,000 people in Thailand have been laid off in the 

jewelry industry, but they concur that significant cutbacks in the Thai jewelry industry 

have recently taken place. 

Page 11 GAO-09-987 
 

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According to agency officials, the National Security Council convened an 

interagency working group and tasked the Department of Commerce 

(Commerce) with holding meetings with group members and U.S. jewelry 

industry and laboratory representatives to obtain information about the 

trade in jadeite and rubies. In response, Commerce arranged four 

meetings, one with U.S. agency gemstone experts in October 2008, and 

three with U.S. jewelry industry representatives and agency officials in 

October and November 2008. In addition to Commerce, agency officials 

from Treasury, DHS, the United States Geological Survey, the United 

States Trade Representative, State, and the International Trade 

Commission attended. According to agency officials, some industry 

representatives who attended these meetings have spoken broadly in favor 

of U.S. import restrictions on Burmese-origin rubies, jadeite, and related 

jewelry because they believe the restrictions will negatively impact the 

Burmese regime. Other representatives have expressed doubts about the 

government’s ability to impose an import restriction regime that will not 

compromise legitimate non-Burmese ruby imports, noting that the nature 

of the ruby trade is decentralized and informal, which complicates 

definitive certification of country-of-origin determination. 

U.S. Agencies Have 

Taken Steps to 

Prohibit Imports of 

Burmese-Origin 

Rubies, Jadeite, and 

Related Jewelry, but 

Have Not Shown That 

They Are Effectively 

Targeting These 

Imports 

Agencies Held Outreach 

Meetings with U.S. Jewelry 

Representatives; Some 

Representatives Said 

Import Restrictions 

Constrain Legitimate Ruby 

Imports 

Some representatives of the U.S. and foreign jewelry industries we 

interviewed also expressed concern about U.S. import restrictions under 

the JADE Act. They said that U.S. import restrictions have little impact on 

the military regime in Burma and negatively impact small-scale miners and 

traders in Burma and jewelry workers in Thailand. According to jewelry 

industry representatives, as a result of the act, some U.S. dealers have 

become reluctant to deal in rubies, jadeite, and related jewelry whether or 

Page 12 GAO-09-987 
 

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not they were from Burma. Although the import restrictions in the JADE 

Act allow trade in non-Burmese-origin rubies, jadeite, and related jewelry, 

some industry representatives said that the restrictions imposed by the act 

have reduced trade in rubies overall, not just trade in Burmese rubies. For 

example, one gemological lab director noted that since the inception of 

the law, few dealers have submitted rubies for testing, suggesting that 

dealers are less inclined to trade in rubies overall. 

Some representatives of colored gemstone dealers expressed concern that 

CBP agents may not have the ability to differentiate between Burmese and 

non-Burmese rubies, jadeite, or related jewelry and this could lead to 

wrongful seizures. For example, a ruby dealer we met with said he wanted 

to purchase a 5-carat, reportedly non-Burmese, ruby during an overseas 

trip. The dealer paid a gemological laboratory to have the stone tested for 

a country-of-origin determination. However, he decided not to purchase 

the ruby because (1) as a result of testing, the stone was judged as 

originating from one of six possible countries, one of which was Burma, 

and (2) with no way to definitively prove the stone was not from Burma, 

the dealer was concerned CBP officials might mistakenly or arbitrarily 

seize the stone. 

U.S. Agencies Modified the 

Harmonized Tariff 

Schedule Codes and 

Published an Interim Final 

Rule, but Ambiguities in 

the Rule Remain 

The President issued Presidential Proclamation 8294 on September 26, 

2008, implementing prohibitions and conditions in the JADE Act and 

authorizing U.S. agencies to take actions called for in the act.12 Specifically, 

the proclamation modified the Harmonized Tariff Schedule (HTS) of the 

United States to prohibit the importation of certain goods of Burma.13 In 

addition, according to agency officials, in October 2008, the HTS was 

amended to include new HTS subheadings that identify and can be used to 

 

12Prior to the proclamation, U.S. Customs and Border Protection issued an instruction to 

the U.S. jewelry industry in September 2008, requiring importers of non-Burmese ruby, 

jadeite, and related jewelry to produce certification that articles were of non-Burmese 

origin. U.S. jewelry industry officials expressed concern over the certification process, 

including lack of understanding and clarity over standards of evidence needed to certify a 

ruby, jadeite, or related jewelry was of non-Burmese origin. U.S. agencies later withdrew 

this instruction and replaced it with more detailed instructions in the interim final rule. 

13See app. II, Modification of Chapter 71 of the Harmonized Tariff Schedule of the United 

States. The HTS is the primary resource for determining tariff classifications for goods 

imported into the United States. The HTS is used to classify a good (a 10-digit tariff 

classification number), which is based on such characteristics as its name, use, and the 

material used in its construction. 

Page 13 GAO-09-987 
 

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track the import of non-Burmese-origin rubies, jadeite, and related 

jewelry.14

Acting to implement the JADE Act and Presidential Proclamation 8294, in 

January 2009, Treasury and CBP published an interim final rule detailing 

requirements and responsibilities for U.S. importers and foreign exporters 

on imports of non-Burmese-origin rubies, jadeite, and related jewelry into 

the United States. The interim final rule detailed conditions on the 

importation of rubies, jadeite, and related jewelry and offered guidance 

and details about importer and exporter responsibilities, including the 

exporter written certification process, importer certification scheme with 

a verifiable evidence standard, and importer record-keeping requirements. 

According to the amended regulations, if an importer brings rubies, 

jadeite, or related jewelry into the United States, using the non-Burmeseorigin HTS codes serves as a certification by the importer that these goods 

were not mined or extracted from Burma. CBP officers do not verify the 

authenticity of the certification. Agency officials said that to determine 

rubies, jadeite, and related jewelry are not from Burma, CBP officers rely 

on (1) the non-Burmese-origin HTS codes under which the items are 

shipped, and (2) statements on accompanying commercial invoices that 

the items did not originate in Burma. Agency officials stated that CBP 

officers will likely have difficulty authenticating country-of-origin 

statements on commercial invoices. U.S. jewelry industry officials also 

expressed concern over the reliability of statements on foreign invoices 

from exporters, because of the potential for fraud or abuse by exporters 

trying to access the U.S. market, and U.S. agency officials acknowledged 

this possibility. 

Further, agency officials said that there is little CBP officers can do to 

challenge such exporter statements unless there is obvious and clear 

conflicting evidence on the commercial invoice or in the shipment itself. 

Agency officials and U.S. jewelry representatives said that a CBP officer 

has no way to discern where a stone is from, or even if a stone is authentic 

or not. CBP officials could have problems distinguishing one colored 

gemstone, such as garnet, from another, such as ruby. Jadeite jade and 

 

14The Department of the Treasury’s Office of Foreign Assets Control is also preparing to 

amend the Burmese Sanctions Regulations, 31 Code of Federal Regulations part 537, to 

implement provisions of the JADE Act. 

Page 14 GAO-09-987 
 

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nephrite jade also share similar characteristics, including colors and 

texture. 

The interim final rule also mandates that at the time of importation, the 

importer must have in his possession written certification from the 

exporter certifying that the jadeite or rubies were not mined or extracted 

from Burma, with verifiable evidence that tracks the stones from the mine 

to exportation or the place of final finishing. The importer is required to 

maintain these records of certification for at least 5 years. However, U.S. 

jewelry industry representatives have expressed concern that the rule 

does not offer practical instruction on what constitutes verifiable 

evidence. Agency officials stated that there are no set standards to 

evaluate verifiable evidence provided by importers. Agency officials 

acknowledged that currently, CBP officers rely on experience to 

determine what is valid, verifiable evidence. U.S. jewelry representatives 

said that without clear guidance as to what constitutes verifiable evidence, 

the importer would have to rely on whatever documentation the exporter 

can provide as evidence of the articles’ origin. Though the interagency 

working group discussed the option of developing further guidance on 

what constitutes verifiable evidence, this has not yet occurred. As a result, 

there is no further guidance from U.S. agencies to importers as to what 

constitutes acceptable verifiable evidence to maintain records on articles 

of non-Burmese origin. 

Since the implementation of the interim final rule, DHS has not developed 

specific guidance to conduct postentry reviews of importers’ records of 

verifiable evidence nor has it conducted any such postentry reviews. As a 

result, U.S. agencies have no process for validating that Burmese-origin 

rubies, jadeite, or related jewelry have been effectively restricted from 

entering the United States. According to CBP officials, CBP is in the 

process of developing a postentry review operation to verify that the 

recordkeeping requirements laid out in the interim final rule are being met. 

Agency officials acknowledge that it will be difficult to track a ruby’s 

movement from the mine to the final marketplace to properly authenticate 

a gemstone’s country of origin because of the decentralized, informal, and 

fractured nature of the ruby-trading business. CBP officials said that they 

plan to conduct postentry reviews of importer information on rubies, 

jadeite, and related jewelry entering the country in order to verify that a 

certification from the exporter is on file as required by the interim final 

rule. However, to date, CBP has not executed this plan. 

The JADE Act does not require, and the interim final rule does not provide, 

any mechanism to test gemstones for country-of-origin determination, and 

Page 15 GAO-09-987 
 

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there are impediments to accurate and definitive determination of whether 

a ruby is of Burmese origin.15 Specialized gemological laboratories in the 

United States and abroad offer a variety of testing services for gemstones 

such as rubies. According to jewelry industry representatives, country-oforigin testing involves the use of various tests to identify distinguishing 

characteristics of a gemstone and compare those characteristics with 

those of reference stones from other sources around the world. In some 

cases, the tests may identify characteristics that are unique to a particular 

source and provide a high degree of certainty that a stone is from a certain 

location. In other cases, the tests may indicate that the gemstone could 

have originated from multiple sources around the world. In particular, 

rubies from some African countries often have characteristics similar to 

those of rubies from Burma, which reduces the certainty of the results and 

complicates the use of country-of-origin testing for the purposes of the act. 

As a result, making a definitive determination as to the country of origin of 

a particular gemstone or group of gemstones will be challenging for a U.S. 

importer or agencies attempting to enforce U.S. import restrictions. 

In addition, according to agency and jewelry industry officials, for 

relatively low-value jewelry that may include multiple, low-value rubies, 

the cost of testing the rubies could be significantly higher than the value of 

the jewelry. During our visit to the gemstone trading marketplace in 

Chanthaburi, Thailand, we saw fully finished and processed Madagascarorigin rubies being sold for 10 cents apiece. However, a gemological lab 

we visited in New York charged $50 per ruby to produce a country-oforigin determination. Industry representatives and agency officials 

confirmed that testing may be cost-prohibitive. In addition, industry 

representatives said that it can be extremely difficult to test large numbers 

of rubies or jadeite set in jewelry because some stones are too small to test 

or are obscured by their settings. 

 

15According to agency officials, there is no definitive way to determine jadeite’s country of 

origin, but the United States imports very little jadeite. 

Page 16 GAO-09-987 
 

DHS has tracked the imports of reportedly non-Burmese rubies, jadeite, 

and related jewelry into the United States since October 2008, but there 

are insufficient data to fully assess the impact of import restrictions under 

the JADE Act. Our analysis of the limited data from DHS on imports from 

October 2008 to May 2009 shows that ruby, jadeite, and related jewelry, 

reportedly of non-Burmese origin, are continuing to be imported into the 

United States.16 (See table 1.) According to DHS data, Thailand, China, 

Pakistan, and India reportedly exported more than $70 million dollars 

worth of non-Burmese-origin rubies, jadeite, and related jewelry into the 

United States from October 2008 to May 2009.17

U.S. Agencies Have Begun 

to Track Non-BurmeseOrigin Ruby and Jadeite 

Imports, but Lack Data to 

Determine Whether 

Restrictions Are 

Effectively Targeting 

Imports 

Table 1: Top 10 Exporters of Reportedly Non-Burmese Rubies, Jadeite, and Related 

Jewelry to the United States from October 2008 to May 2009 

Country of origin Value of exports

Thailand $23,277,674

China (mainland and Hong Kong) 17,401,152

Pakistan 17,038,923

India 16,815,604

Switzerland 6,617,152

Italy 5,622,562

Dominican Republic 3,229,973

France 2,662,960

United Arab Emirates 1,273,864

Canada 1,256,643

Total $95,196,507

Source: DHS/CBP. 

The data show that the United States imported more rubies, jadeite, and 

related jewelry from Thailand, in terms of value, than from any other 

country. There were also a number of reportedly non-Burmese-origin 

jadeite imports (excluding jewelry), worth approximately $2.6 million, 

although U.S. and foreign jewelry industry officials told us almost all 

 

16This analysis is based on reported imports under the new HTS subheadings. By using 

these subheadings, these imports are categorized as having non-Burmese origin. These data 

rely on information self-declared by foreign exporters of such products to the United 

States. 

17For the full list of exporting countries, see app. III (DHS Data on Exporter Reported 

Imports of Non-Burmese Rubies, Jadeite, and Related Jewelry into the United States, 

October 2008 – May 2009). 

Page 17 GAO-09-987 International Trade
 

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jadeite is of Burmese origin. During this time period, no shipments were 

seized by CBP on the grounds that they were suspected to be of Burmese 

origin. 

However, even with the data generated from the recent tracking of 

reportedly non-Burmese-origin imports, it is still difficult to determine 

whether or not the import restrictions imposed under the JADE Act are 

effectively targeting Burmese-origin items. First, DHS did not track data on 

the import of non-Burmese-origin rubies, jadeite, and related jewelry prior 

to September 2008. As a result, it is not possible to compare the amount of 

rubies, jadeite, or related jewelry that entered the United States prior to 

the implementation of the law, in order to analyze the effect of the law. 

Second, using current HTS codes, CBP does not separately track imports 

of ruby jewelry and jadeite jewelry because both are currently categorized 

under the same HTS codes. Without this information, CBP cannot 

determine the amount of (1) rubies, plus ruby jewelry, and (2) jadeite, plus 

jadeite jewelry, imported over time and cannot analyze the effect of the 

law on U.S. importation of these distinct gemstone products. Third, less 

than 2 percent of shipments (41 out of more than 2,500) had quantities of 

rubies, jadeite, or related jewelry listed. Without accurate data on the 

quantity of products imported, and the corresponding per unit value of 

items in such shipments, CBP cannot assess the total quantity of 

reportedly non-Burmese-origin rubies, jadeite, and related jewelry 

imported into the United States. Without this information or the 

corresponding per unit value of items in such shipments, CBP cannot 

analyze patterns of trade, such as whether higher- or lower-value items are 

coming from particular countries, exporters, and so forth. Such 

information could be useful in the event that CBP considers testing on 

some subset of the stones, such as those with a high per unit value. 

In addition, agencies lack accurate and reliable data on gemstone exports 

from Burma to other countries, which hinders efforts to analyze the 

impact U.S. import restrictions are having on Burmese production and 

supply of gemstones.18 According to agency officials, the Burmese regime’s 

records on ruby and jadeite production and exports cannot be verified. 

Agency officials stated that data on Burmese ruby and jadeite production 

 

18The United States Geological Survey tracks worldwide mineral production figures, 

including ruby production in Burma. However, officials said that because of the 

unsubstantiated nature of the Burmese government reports and because the Burmese 

government may lack full control over mining areas, the ruby production numbers may not 

be accurate. 

Page 18 GAO-09-987 
 

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is limited to official Burmese government sources and may be unreliable. 

A leading economic scholar on Burma noted that Burma’s official 

economic statistics are incomplete, internally contradictory, and 

frequently subject to dramatic revision. 

China’s support and cooperation are critical if the United States 

government hopes to prohibit international trade in Burmese jadeite and 

jadeite jewelry. However, according to U.S. agency officials and foreign 

jewelry industry representatives, it is nearly impossible to secure Chinese 

cooperation to stop the trade in Burmese jadeite because of the strong 

demand for jadeite in China and because finishing and processing it is a 

source of employment. According to U.S. agency officials and foreign 

jewelry industry representatives, because almost all Burmese jadeite is 

imported by China and the Chinese have a very strong internal demand for 

it and economic interests in processing it, as discussed earlier, the United 

States has very little leverage in attempting to gain China’s active support 

and cooperation in order to stem the international trade of Burmese 

jadeite. In addition, agency officials said China would not support 

implementing a ban on Burmese jadeite because they oppose all sanctions 

against Burma; China fundamentally opposes the concept of sanctions 

against Burma as a policy tool. 

U.S. Agencies Have 

Made No Discernible 

Progress in Gaining 

International Support 

to Prevent Global 

Trade in Burmese 

Gemstones 

Strong Support and 

Cooperation of China and 

Thailand Are Important to 

Restrict Global Trade in 

Burmese-Origin Jadeite, 

Rubies, and Related 

Jewelry, but Highly 

Unlikely 

Thailand’s support and cooperation are also critical if the United States 

hopes to effectively prohibit international trade in Burmese rubies and 

ruby jewelry. However, it is highly unlikely that Thailand will support 

measures under the JADE Act given the act’s impact on Thailand’s 

economy. In addition, U.S. agency officials, foreign government officials, 

and Thai jewelry industry representatives told us that import controls 

under the JADE Act are hurting small-scale miners and traders in Burma 

and dealers and laborers in Thailand, not the military regime in Burma. 

Page 19 GAO-09-987 
 

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Thai government officials also said they are concerned that European 

governments could follow the United States and adopt JADE Act-style 

restrictions on Burmese-origin rubies and ruby jewelry. 

According to U.S. agency officials, the fact that Thai government officials 

are willing to publicly voice their concerns about the import restrictions in 

the JADE Act can be taken as evidence that the act is having a negative 

impact on the Thai jewelry industry. Agency officials said, however, that it 

is difficult to determine whether this impact is caused by the global 

economic downturn, the JADE Act, or some combination of both. U.S. 

agency officials stated that Thailand already felt challenged by the United 

States on other trade issues, such as intellectual property rights and 

accusations of questionable labor practices regarding shrimp production. 

Required 60-Day JADE Act 

Report Was Sent to 

Congress, but Has Little 

Information on Progress 

Made in Gaining 

International Support 

The JADE Act required the President to transmit a report to Congress 

describing actions the United States has taken during the first 60 days after 

the enactment of the act to seek (1) the issuance of a draft WTO waiver, 

(2) the adoption of a UN resolution, and (3) the negotiation of an 

international arrangement—-similar to the Kimberley Process Certification 

Scheme for conflict diamonds. Presidential Proclamation 8294 authorized 

the Secretary of State, in consultation with the United States Trade 

Representative, to transmit the report to Congress. According to State, this 

report was sent to Congress on February 23, 2009. 

The report states that during the 60-day period following enactment of the 

act, the Administration was engaged in developing regulations to 

implement the act’s provisions. However, the report submitted is just a 

page and a half long and only provides basic statements on actions taken, 

such as a Presidential Proclamation being issued and the HTS being 

amended. According to the report, State informed two countries engaged 

in processing and trading rubies and jadeite of the new import restrictions 

under the JADE Act. The report also states that State engaged European 

Union counterparts to discuss the act and how to best harmonize 

respective sanctions against Burma. Beyond these basic statements 

covering actions taken during the first 60 days, the report has little 

information on the overall progress agencies have made or the challenges 

they face in gaining international support. 

Page 20 GAO-09-987 
 

According to the President’s Proclamation, USTR is responsible for taking 

all appropriate actions to seek the issuance of a draft waiver decision by 

the WTO Council for Trade in Goods waiving applicable WTO obligations 

with respect to the import restrictions of the JADE Act. However, USTR 

officials said that they have taken no formal steps to initiate a waiver 

request at the WTO. The Administration has not indicated that it considers 

U.S. import restrictions under the JADE Act to be inconsistent with U.S. 

WTO obligations. 

USTR Officials Have Not 

Taken Steps to Request a 

WTO Waiver 

According to USTR officials, a WTO member requests a waiver when it 

implements a measure that it acknowledges is inconsistent with its WTO 

obligations but believes that other WTO members would not be opposed 

to the measure’s continued application. Thus, requesting a waiver for the 

JADE Act would represent an acknowledgment that the import 

restrictions on Burmese articles are inconsistent with U.S. WTO 

obligations. 

According to agency officials, if the Administration decides that a WTO 

waiver is necessary, USTR would submit a waiver request to the WTO 

Council for Trade in Goods, which would then consider the request. 

Agency officials also said if the council approves the waiver request, it 

would submit a report to the WTO General Council, which would then 

formally endorse the Council for Trade in Goods’ report, and the waiver 

would be approved. The Council for Trade in Goods and the General 

Council would make these decisions based on a consensus of the entire 

WTO membership. An approved WTO waiver would allow the United 

States to apply import restrictions on Burmese jadeite, rubies, and related 

jewelry entering the United States without running afoul of its WTO 

obligations. If consensus is not reached in the Council for Trade in Goods, 

the waiver request does not move forward and the continued use of the 

measure by the United States or other country may be challenged by a 

WTO member under the WTO dispute settlement mechanism. 

Because of the WTO’s consensus decision-making process, any WTO 

member—-including Thailand, Burma, or any country that feels directly or 

indirectly negatively affected by the law—-could effectively veto a WTO 

waiver request by the United States. Agency officials said WTO members 

rarely initiate a waiver request unless they believe that a consensus exists 

for its approval. In addition, agency officials said the process of seeking 

and acquiring a WTO waiver request may take a long time because the 

decision to get a waiver is predicated on a consensus decision. USTR 

officials noted that past WTO waiver requests submitted by the United 

Page 21 GAO-09-987 International Trade
 

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States were held up for a number of years; even very small countries have 

held up waiver requests. 

State Has Not Introduced a 

UN Resolution against 

Burma, Noting That a 

Number of Countries 

Would Likely Oppose It 

State has not introduced a UN resolution, noting that a number of 

countries at the UN are generally opposed to resolutions against Burma. 

Officials said that the Administration is currently undertaking a review of 

the U.S. government’s Burma policy that, when completed, would enable it 

to determine how to best integrate the objectives of the JADE Act into its 

overall diplomatic strategy. State has also taken some basic steps to gather 

information about ruby markets in certain countries. For example, 

according to agency officials, as the JADE Act was being developed, the 

embassy in Bangkok produced several reporting cables on the ruby 

industry in Thailand. Agency officials said these cables provided 

background information on topics such as where the rubies were from, the 

process of finishing rubies, the sales of rubies and ruby jewelry to the 

United States and Europe, and the extent of Burmese ruby smuggling into 

Thailand. 

In December 2008, State headquarters sent a cable to posts in response to 

the JADE Act. According to State officials, State headquarters sought 

information on the import and processing of Burmese rubies in countries 

thought to be involved in the ruby trade, including Thailand and China. In 

response, State staff at overseas posts met with jewelry industry 

representatives or government officials in their respective countries to 

discuss the ruby trade. However, State headquarters did not ask posts 

about the importation or processing of Burmese jadeite. According to 

agency officials, posts were not asked about the importation or processing 

of Burmese jadeite because the United States is not an export market for 

jadeite. In addition, the cable did not explicitly ask staff to conduct 

diplomatic outreach to secure their host governments’ support for the 

JADE Act. According to agency officials, the cable was intended to solicit 

information on the trade in rubies rather than to seek to secure host 

government support for the JADE Act. On their own, officials at some 

posts we visited reported that they conducted outreach, particularly with 

those governments that wished to discuss their positions on U.S. import 

restrictions under the JADE Act with State officials. 

According to State officials, a number of countries at the UN are generally 

opposed to resolutions targeted at Burma. State has approached a couple 

of other countries about the feasibility of a UN resolution, but has not yet 

introduced one. Agency officials said a proposal calling for the creation of 

a workable certification scheme for Burmese rubies and jadeite will likely 

Page 22 GAO-09-987 
 

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be challenged by some countries at the UN on the basis of its technical 

feasibility. According to these officials, even with a reliable technical 

process to establish which rubies, jadeite, and related jewelry are of 

Burmese origin, it is doubtful such a resolution would pass. 

There Have Been No 

International Meetings 

Convened to Negotiate a 

Kimberley-like 

Framework, and Agency 

Officials Cite Serious 

Impediments to 

Establishing a Framework 

State officials said they have had working-level discussions with likeminded countries about the possibility of negotiating a Kimberley-like 

framework to prevent the global trade in Burmese-origin rubies, jadeite, 

and related jewelry. State officials said they would, to the extent possible, 

continue discussions with like-minded states to develop a framework that 

could win sufficient international support to trace and document the 

origin of these products. However, to date, there have been no 

international meetings convened among relevant countries, private 

industry, and nongovernmental organizations to negotiate a Kimberley-like 

framework, as occurred for conflict diamonds. Agency officials said there 

are serious impediments to achieving this objective, such as lack of 

international support and the inherent difficulty in identifying the country 

of origin for rubies and ruby jewelry, as discussed earlier. In addition, 

agency officials said there are key differences between the global diamond 

and Burmese ruby industries that could complicate establishing a 

Kimberley-like framework. 

According to agency officials, the Burmese ruby industry mostly consists 

of decentralized small-scale operations, is subject to significant smuggling, 

lacks documentation, and is often carried out through cash exchanges. In 

contrast, while some diamonds are extracted using small-scale mining 

techniques, the deep diamond mining industry tends to be more 

centralized, with large, highly capitalized resource extractors like DeBeers 

that can more effectively control and track mining through all stages of 

production.19 Further, according to agency officials, low-quality rubies are 

much more common than low-quality diamonds. There are very large 

quantities of small, low-value rubies; much smaller quantities of large, 

high-value rubies; and a tremendous variety of rubies in between. 

For example, based on our analysis of DHS’s data on ruby shipments (that 

had a declared quantity) coming into the United States between October 

2008 and May 2009, the average value of a ruby article was less than 1 

 

19Due to the substantial capital required for deep mining, just four companies mine a large 

majority of the world’s supply of rough diamonds. 

Page 23 GAO-09-987 
 

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cent.20 Moreover, according to these same data, a single shipment of rough 

rubies arrived in Charleston, South Carolina, in October 2008 that included 

89 million rubies worth a total of only $35,600 (on average, each ruby was 

worth less than 1/10 cent). Rubies and jadeite can be used in products 

unimaginable in the diamond context; while conducting our audit in 

Rangoon, we saw numerous examples of “paintings” composed entirely of 

various colors of ruby, jadeite, and other colored gemstones glued to 

canvases (fig. 7). Such products are composed of literally thousands or 

tens of thousands of stones; each stone could have come from one of any 

number of sources. 

Figure 7: A “Painting” Composed Primarily of Green Jadeite and Other Colored 

Gemstones Glued to Canvas, for Sale in Rangoon, Burma 

Source: GAO.

In addition, according to agency officials, the effort to restrict the trade of 

Burmese-origin rubies and jadeite has, thus far, been a unilateral effort by 

the U.S. government led by Congress. In contrast, the effort to develop the 

 

20This calculation is based on a limited, nonrepresentative sample of shipments (41 out of 

more than 2,500 shipments) where there are data on the shipment value and quantity of 

rubies, jadeite, and related jewelry. DHS reports value and quantity based on what is 

declared on each shipment. We sorted the declared value and quantity of ruby shipments 

(35 out of the 41 shipments), calculated their total quantity and value, and calculated the 

average value of a ruby article in these 35 shipments. 

Page 24 GAO-09-987 
 

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Kimberley Process for conflict diamonds was a multilateral effort. For 

conflict diamonds, the diamond-producing countries and the international 

diamond industry supported efforts to restrict trade in conflict diamonds. 

Because of this broad international support, other countries, the 

international diamond industry, and nongovernmental organizations have 

worked to establish and maintain the Kimberley Process and its 

mechanisms to restrict the flow of conflict diamonds. 

One of the purposes of the JADE Act is to promote a coordinated 

international effort to restore civilian democratic rule to Burma, and 

recent events further demonstrate the human rights violations of the 

regime. U.S. measures to exert pressure on the regime include two types 

of trade measures: one designed to restrict U.S. imports of jadeite and 

ruby originating from Burma and the other to utilize mechanisms such as 

the UN to restrict worldwide trade in Burmese jadeite and rubies. 

However, as the evidence in this report indicates, U.S. agencies have not 

shown that they are effectively targeting imports of Burmese-origin rubies, 

jadeite, and related jewelry while allowing imports of non-Burmese-origin 

goods. While agencies have published an interim final rule, they have not 

developed specific audit guidance or initiated any postentry reviews of 

importers’ records. In addition, there is little guidance to importers on 

what constitutes verifiable evidence. Additional steps to implement this 

rule, along with further improvements in the data collected on imported 

rubies and jadeite, could contribute to an understanding of whether import 

restrictions are effectively targeting Burmese-origin goods. 

Conclusions 

With regard to the goal of restricting worldwide trade, the Department of 

State submitted a required 60-day report to Congress, but the report had 

little information on progress or the challenges involved in gaining 

international support. Since that report, USTR has not requested a WTO 

waiver and State has made no discernible progress in introducing a UN 

resolution or negotiating a Kimberley-like process. Although agencies cite 

a number of factors that could impede progress, the current status has not 

been communicated to Congress. In order for Congress to provide 

oversight and assist in the design of an effective set of policies to exert 

pressure on the regime in Burma, it needs accurate and complete 

information about the effectiveness of existing policies and challenges in 

implementing those policies, and our review demonstrates that this 

information has not been provided. 

Page 25 GAO-09-987 
 

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In order to effectively implement the sections of the JADE Act prohibiting 

the importation of Burmese-origin rubies, jadeite, and related jewelry 

while allowing imports of non-Burmese-origin goods, we recommend that 

DHS, in consultation with relevant agencies, develop and implement 

guidance to conduct postentry reviews of importers’ records and provide 

improved guidance to importers on the standards of verifiable evidence 

needed to certify articles are of non-Burmese origin. 

To enhance the effectiveness of U.S. policy against the military regime in 

Burma, we recommend that State, in consultation with DHS and Treasury, 

analyze the efficacy, challenges, and difficulties faced in implementing 

measures to restrict trade in Burmese-origin rubies, jadeite, and related 

jewelry in the context of the broader U.S. sanctions provisions in the 

JADE Act, and report to Congress how these measures will contribute to 

its efforts to influence the military regime in Burma. 

We provided a draft of this report to USTR and the Secretaries of State, 

Homeland Security, the Treasury, and Commerce for their review and 

comment. We received written comments from DHS, Commerce, and State 

that are reprinted in appendixes V, VI, and VII; we also received technical 

comments from USTR, DHS, and the Treasury, which we incorporated as 

appropriate. DHS concurred with our first recommendation and State 

concurred with our second recommendation. 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

DHS concurred with our first recommendation and noted in its comments 

that its work to implement the recommendation will rely on consultation 

with other relevant agencies of the U.S. government. DHS also stated that 

it believes a U.S. governmentwide effort to establish international 

agreement and standards to restrict trade in Burmese rubies, jadeite, and 

related jewelry will offer a more comprehensive and realistic solution to 

achieving the goals of the JADE Act, beyond DHS’s enforcement of U.S. 

import restrictions. We acknowledge that the Kimberley Process for 

conflict diamonds could offer a model for establishing such an 

international agreement but, as we have noted in this report, there are 

serious challenges that could make the establishment of such a process 

difficult for preventing international trade in Burmese rubies, jadeite, and 

related jewelry. In its comments, Commerce expressed concern about 

language in our report characterizing its involvement in the interagency 

working group to develop further guidance on what constitutes verifiable 

evidence. In response, we modified this sentence in our report to more 

accurately portray the entities involved. 

Page 26 GAO-09-987 
 

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State concurred with our second recommendation, to analyze the 

efficacies, challenges, and difficulties in implementing measures under the 

JADE Act. State noted that it would include the findings from this analysis 

in its Semi-Annual Report on Conditions in Burma, due to Congress on 

November 15, 2009. State also noted it would include our second 

recommendation in the Administration’s overall policy review of Burma. 

We are sending copies of this report to interested congressional 

committees. In addition, this report will be available on the GAO Web site 

at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

at (202) 512-4347 or yagerl@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Key contributors to this report are listed in appendix VIII. 

Loren Yager, Director 

International Affairs and Trade 

Page 27 GAO-09-987 
 

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List of Congressional Committees 

The Honorable Max Baucus

Chairman 

The Honorable Charles E. Grassley

Ranking Member 

Committee on Finance 

United States Senate 

The Honorable John F. Kerry 

Chairman 

The Honorable Richard G. Lugar 

Ranking Member 

Committee on Foreign Relations 

United States Senate 

The Honorable Howard L. Berman 

Chairman 

The Honorable Ileana Ros-Lehtinen 

Ranking Member 

Committee on Foreign Affairs 

House of Representatives 

The Honorable Charles B. Rangel 

Chairman 

The Honorable Dave Camp 

Ranking Member 

Committee on Ways and Means 

House of Representatives 

Page 28 GAO-09-987 
Appendix I: Objectives, Scope, and 

Methodology 

Page 29 GAO-09-987 

Appendix I: Objectives, Scope, and 

Methodology 

To examine U.S. agencies’ efforts in response to the Tom Lantos Block 

Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008 (JADE Act) 

(Pub. L. No. 110-286), we assessed (1) the key characteristics of the trade 

of Burmese-origin jadeite and Burmese-origin rubies; (2) the progress U.S. 

agencies have made to restrict imports of Burmese-origin jadeite, rubies, 

and related jewelry into the U.S. market; and (3) the progress U.S. 

agencies have made in pursuing international actions, including (a) 

seeking a World Trade Organization (WTO) waiver, (b) securing a United 

Nations (UN) resolution, and (c) working to negotiate an international 

arrangement—similar to the Kimberley Process—to prevent global trade 

in Burmese-origin jadeite, rubies, and related jewelry. To address these 

objectives, we reviewed and analyzed documents, memos, reports, 

guidance, papers, and cables from the Department of State in Washington, 

D.C.; embassies in Rangoon and Bangkok; consulates in Chiang Mai and 

Hong Kong; the United States Geological Survey (USGS); the Office of the 

United States Trade Representative; the Departments of Homeland 

Security, the Treasury, and Commerce; U.S. and foreign jewelry industries; 

nongovernmental organizations; and academics. 

We reviewed the JADE Act; Presidential Proclamation 8294—To 

Implement Amendments to the Burmese Freedom and Democracy Act of 

2003; U.S. Customs and Border Protection (CBP) guidance, including 19 

Code of Federal Regulations (CFR) Parts 12 and 163—the interim final 

rule; other documents, cables, reports, and memos from relevant U.S. 

agencies; and documents from gemological laboratories, such as countryof-origin reports. In addition, we reviewed and analyzed Department of 

Homeland Security/U.S. Customs and Border Protection data on the 

source and value of reportedly non-Burmese-origin rubies, jadeite, and 

related jewelry entering the United States from October 2008 to May 2009. 

During the course of our review, we interviewed officials from the 

Department of State in Washington, D.C.; embassies in Rangoon and 

Bangkok; consulates in Chiang Mai and Hong Kong; USGS; the Office of 

the United States Trade Representative; and the Departments of Homeland 

Security, the Treasury, and Commerce, as well as foreign government 

officials in Thailand and Burma to gather information on the Burmese 

jadeite and ruby trades and the impact of the JADE Act on these trades. To 

understand the perspectives of ruby and jadeite industry traders, dealers, 

and association members, we interviewed U.S. jewelry industry officials in 

New York City and foreign jewelry industry officials in Hong Kong, 

Thailand, and Burma. In addition, to assess the validity of and collect 

information on gemstone testing processes, we interviewed gemologists 

and gemstone testing experts at three major U.S. laboratories in New York 

 International Trade
Appendix I: Objectives, Scope, and 

Methodology 

 International Trade

City, and interviewed foreign gemstone testing experts at laboratories in 

Bangkok. To collect detailed qualitative and contextual information about 

Burma, including economic, political, social, and geopolitical variables, we 

interviewed academic scholars from Harvard University, Georgetown 

University, Macquarie University (Sydney, Australia), and the Brookings 

Institution. We selected officials with a wide range of views and 

experiences on the subject, including scholars with a range of expertise on 

Burma’s economy and political situation. 

The scope of our review was set by the JADE Act. The act has several 

provisions, one part of which amends the Burmese Freedom and 

Democracy Act of 2003 to prohibit the import of Burmese-origin jadeite 

and rubies and jewelry containing Burmese-origin jadeite and rubies into 

the United States and calls on the Administration to pursue certain 

international actions to prevent the global trade in Burmese gemstones. 

The JADE Act also requires GAO to submit a report to Congress assessing 

the effectiveness of the implementation of this section of the act, including 

any recommendations for improving its administration. We conducted this 

performance audit from December 2008 to September 2009, in accordance 

with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our 

audit objectives. 

Page 30 GAO-09-987 
Ap

the

St

pendix II: Modification of Chapter 71 of

 Harmonized Tariff Schedule of the United

ates 

Page 31 GAO-09-987 

Appendix II: Modification of Chapter 71 of 

the Harmonized Tariff Schedule of the United 

States 

Effective with respect to goods entered, or withdrawn from warehouse for 

consumption, on or after September 27, 2008, chapter 71 of the 

Harmonized Tariff Schedule is modified by inserting in numerical 

sequence the following new Additional U.S. Note: 

Prohibition on the 

importation of certain 

goods of Burma: 

(a) Pursuant to section 3A of the Burmese Freedom and Democracy Act of 

2003 (Public Law 108-61; 50 U.S.C. 1701 note), as amended by the Tom 

Lantos Block Burmese JADE Act of 2008 (Public Law 110-286), for 

purposes of goods provided for in headings 7103, 7113, and 7116, except as 

set forth in subdivisions (c) and (d) of this note, the importation of any of 

the following goods shall be prohibited: 

i) jadeite mined or extracted from Burma and classifiable in 

heading 7103 of the tariff schedule, 

ii) rubies mined in or extracted from Burma and classifiable in 

heading 7103 of the tariff schedule, 

iii) articles of jewelry containing jadeite described in subdivision 

(a)(i) of this note, whether classifiable in heading 7113 or 7116 of 

the tariff schedule; and 

iv) articles of jewelry containing rubies described in subdivision 

(a)(ii) of this note, whether classifiable in heading 7113 or 7116 of 

the tariff schedule. 

With respect to goods entered or withdrawn from warehouse for 

consumption, on or after September 27, 2008, should an importer 

choose to enter any good under heading 7103, 7113 or 7116, the 

presentation of such entry shall be deemed to be a certification by 

the importer that any jadeite or rubies contained in such good were 

not mined in or extracted from Burma. 

(b) Notwithstanding the deemed certification under subdivision (a) above, 

the importation of the following goodsi) jadeite mined in or extracted from a country other than Burma 

and classifiable in heading 7103 of the tariff schedule, 

ii) rubies mined in or extracted from a country other than Burma 

and classifiable in heading 7103 of the tariff schedule, 

 International Trade
Appendix II: Modification of Chapter 71 of 

the Harmonized Tariff Schedule of the United 

States 

 International Trade

iii) articles of jewelry containing jadeite described in subdivision 

(b)(i) or rubies described in subdivision (b)(ii) of this note, 

whether classifiable in heading 7113 or 7116 of the tariff schedule, 

is not permitted unless such goods comply with the terms of any 

regulations issued by the Secretary of the Treasury to implement 

section 3A(c)(1) of the Burmese Freedom and Democracy Act of 

2003, as amended, or are covered by any waiver or certification 

scheme that may be established pursuant to the provisions of 

sections 3(b) and 3A of the act, as amended. 

(c) The provisions of this note shall not apply to Burmese covered articles 

and non-Burmese covered articles that were previously exported from the 

United States, including those that accompanied an individual outside the 

United States for personal use, if they are reimported into the United 

States by the same person, without having been advanced in value or 

improved in condition by any process or other means while outside the 

United States. 

(d) The certification established under subdivision (a) of this note shall 

not apply to the importation of non-Burmese covered articles by or on 

behalf of an individual for personal use and accompanying an individual 

upon entry into the United States, with a proper claim under subheading 

9804.00.20, 9804.00.45 or other appropriate provision of chapter 98 of the 

tariff schedule. 

Page 32 GAO-09-987 
Appendix III: DHS Data on ExporterReported Imports of Non-Burmese Rubies, 

Jadeite, and Related Jewelry 

The following table shows Department of Homeland Security (DHS) data 

on exporter-reported imports of non-Burmese rubies, jadeite, and related 

jewelry into the United States from October 2008 to May 2009 (ranked 

according to U.S. dollar value). 

Table 2: DHS Data on Exporter-Reported Imports of Non-Burmese Rubies, Jadeite, 

and Related Jewelry into the United States, October 2008-May 2009 

Country of origin Value of exports

Thailand $23,277,674

China (mainland and Hong Kong) 17,401,152

Pakistan 17,038,923

India 16,815,604

Switzerland 6,617,152

Italy 5,622,562

Dominican Republic 3,229,973

France 2,662,960

United Arab Emirates 1,273,864

Canada 1,256,643

Brazil 1,147,167

Tanzania 1,036,624

United Kingdom 952,618

Australia 824,065

Republic of South Africa 793,445

Turkey 725,982

Sri Lanka 687,601

Indonesia 558,386

Colombia 471,735

Costa Rica 457,512

Mexico 403,089

Federal Republic of Germany 390,883

Vietnam 347,350

Spain 337,052

Israel 314,668

Greece 255,587

Denmark 221,740

United States 215,643

Croatia 209,361

Kenya 188,930

Appendix III: DHS Data on ExporterReported Imports of Non-Burmese Rubies, 

Jadeite, and Related Jewelry 

Page 33 GAO-09-987 International Trade
Appendix III: DHS Data on ExporterReported Imports of Non-Burmese Rubies, 

Jadeite, and Related Jewelry 

 International Trade

Country of origin Value of exports

Madagascar (Malagasy) 156,950

Japan 150,685

Republic of Korea 137,383

Singapore 134,770

Nicaragua 106,965

Oman 103,278

Poland 86,098

China (Taiwan) 84,252

Guatemala 81,605

Belgium 62,593

Peru 42,657

Argentina 37,705

Lebanon 36,682

Bolivia 32,421

Mozambique 28,548

Austria 26,759

Nepal 25,832

Chile 23,678

Congo (Brazzaville) 19,353

Mauritius 15,384

Netherlands 14,083

Portugal 9,908

Nigeria 8,385

Malaysia 7,166

Ireland 7,138

New Zealand 5,859

Venezuela 5,590

Philippines 5,551

Laos 4,935

Uruguay 2,500

Afghanistan 2,090

Morocco 765

El Salvador 698

Paraguay 473

Niger 472

Sweden 417

Honduras 316

Page 34 GAO-09-987 
Appendix III: DHS Data on ExporterReported Imports of Non-Burmese Rubies, 

Jadeite, and Related Jewelry 

 International Trade

Country of origin Value of exports

Russia 254

Lithuania 237

Norway 223

Egypt 161

Saudi Arabia 65

Cambodia 65

Zambia 50

Moldova 47

Mali 10

Ethiopia 10

Tunisia 4

Total $107,207,015

Source: GAO analysis of DHS data. 

Page 35 GAO-09-987 
A

Est

W

ppendix IV: United States Geological Survey 

imates of Ruby Production 2000-2005 (by 

eight Measured in Kilograms)

Page 36 GAO-09-987 

Appendix IV: United States Geological Survey 

Estimates of Ruby Production 2000-2005 (by 

Weight Measured in Kilograms) 

Sources: GAO analysis of USGS data; Map Resources (map).

Rank 1 2 3 4 5 6 7 8 9 10

 Kenya Tanzania Madagascar Burma Nepal Malawi Vietnam Afghanistan Thailand Pakistan

2000 5,896 1,070 8 633 150 0 70 70 20 5

2001 5,862 1,174 941 393 150 12 70 55 20 8

2002 3,043 1,800 889 402 150 0 70 55 30 21

2003 2,310 2,675 800 286 150 120 70 55 15 9

2004 4,758 2,800 741 386 150 120 30 30 20 16

2005 5,100 2,800 920 669 150 180 30 0 20 46

Total 26,969 12,319 4,299 2,769 900 432 340 265 125 105

Nepal

Thailand

Pakistan

Burma

Vietnam

Tanzania

Afghanistan

Madagascar

Kenya

Malawi

Note: USGS collects data on the international mineral production of various commodities from 

different sources, often using foreign publications to produce such data. To estimate Burma’s figures, 

USGS uses information from the Foreign Broadcast Information Service, which collects and 

translates data produced by foreign governments. In the case of Burma, the Central Statistical 

Organization of Burma produces annual mineral production data. However, it should be noted that 

Burmese government data may be incomplete or inaccurate. 

 International T
Appendix V: Comments from the Department Appendix V: Comments from the Department of Homeland Security 

of Homeland Security 

Page 37 GAO-09-987 International Trade
Appendix V: Comments from the Department 

of Homeland Security 

Page 38 GAO-09-987 International Trade
Appendix VI: Comments from the Department Appendix VI: Comments from the of Commerce 

Department of Commerce 

Page 39 GAO-09-987 International Trade
Appendix VI: Comments from the Department 

of Commerce 

Page 40 GAO-09-987 International Trade
Appendix VII: Comments from the Appendix VII: Comments from the Department of State 

Department of State 

Page 41 GAO-09-987 International Trade
Appendix VII: Comments from the 

Department of State 

Page 42 GAO-09-987 International Trade
A

Ac

ppendix VIII: GAO Contact and Staff 

knowledgments

Page 43 GAO-09-987 

Appendix VIII: GAO Contact and Staff 

Acknowledgments 

Loren Yager, (202) 512-4347, or yagerl@gao.gov

In addition to the individual named above, Godwin Agbara, Assistant 

Director; Ian Ferguson; Rajneesh Verma; Mary Moutsos; Etana Finkler; 

and Karen Deans made key contributions to this report. 

 International Trade

GAO Contact 

Staff 

Acknowledgments 

(320644) 
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