VOL. 39, #2, SUMMER 2021

Burma Gemstones Ban Back Again, 13.02 Burma Ruby sells for over $2.5 million , Burma News, Gem Dealer on Netflix

  Jun 20, 2021   admin


Burma Gemstones Ban Back Again
by Robert Genis

On July 28, 2003 President Bush signed the Burmese Freedom and Democracy Act, closing the U.S. market to gem imports from Burma (Myanmar). Gem dealers found a loophole in the law and they began to import Burma rubies and other gems from other source countries, such as Thailand and Hong Kong. The Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of 2008 prohibited United States imports of jadeite and ruby from Burma, even if the gems were processed in, and exported from, another country. The ban was lifted in 2016. It took 13 years to reverse this policy under the Obama Administration.  During the recent February coup, the Biden administration signed an executive order, again placing heavy restrictions on Burma gems.   

It targets the Myanmar Gems Corporation, which is theoretically responsible for all gem activity in Burma.  Does it really control all the gem activity in Burma?  Definitely not because many small miners look for stones off the grid. Many anti-government groups are also heavily involved in the gem trade. The supply chain in Burma is not transparent.  Many stones are smuggled to China or Thailand.  These people don't want the Burmese Government to know what they are doing nor pay export taxes.

During the first ban, the small Burmese miners and gem sellers were hurt financially by these bans.  Sanctions often hurt the poor people most.  The US Government is aware of this.  This time they specifically targeted the major gem companies and the military that controls the country.  How do you know new goods are not from these large organizations or the Burmese Government?  This is the million dollar dilemma.  How do you prove the stones are not from Myanmar Gems Corporation?  Since this is practically impossible, the effect is the same as a pure Burma ban.  US Gem organizations' advice is not to buy any new goods, just to be safe.

Importantly, Burma gemstones that are already in the United States have always been totally legal to buy and sell. Even during the 2003-2016 Burma Ban. This has not changed today.                                                               

The only way we know to prove you are not violating the ban is to prove you have old (imported pre-ban) Burma goods.  The best way to do this? Have an older lab report, preferably AGL.  The older pre-ban goods are becoming more valuable and desired because they pass the new Burma ban test.   Most of the best stones already sit in portfolios of collectors.  Now they have the best paper, too.

13.02 Burma Ruby sells for over $2.5 million
by Robert Genis

On June 9, 2021 at Sotheby's Magnificent Jewels, a 13.02 cushion Burma Ruby sold for $2,500,500.  The pre-sale estimate was between $1 and $2 million.  This comes to over $190,000 per carat.  Remember, at Christie's last winter, a 6.40 Burma Ruby sold for $2.8 million or $432,000 per carat.  The difference in value despite the size difference?  The 6.41 is a 2.5 Color or 70% red and the 13.02 is a 4 color or 60% red.  The market values the reddest gems higher.

What does all this mean visually? Here are some broad generalizations of Burma ruby with older AGL Grading Reports:

  • Stones that grade with an ECA1 of 4.0 or numerically lower on the top line are red.
  • Stones that grade with an ECA1 of 4.5 on the top line look pinkish red or electric magenta.
  • Stones that grade with an ECA1 of 5.0, 5.5, or 6.0 on the top line look pink.

What this means is the 13.02 is considered a red Burma.  Not as red as the 6.41 but still red.  It's only when you get to the ECA1 of 5 do Burma rubies look pink. Past the ECA1 6 color, you are now talking about pink sapphires, not rubies.


Let's briefly look at the AGL document.  The color/tone is 4/70.  The color scan is Red 60% Pink/Purple 25% and Orange 15.  What this means is your eyes will see red and pink.  You will not see the orange. Perfect 70 tone means the 13.02 looks good in all lights.  The stone is MI1-MI2, so you will see inclusions with your eyes.  This is not considered as negative as inclusions in diamonds because these inclusions prove Burma and no heat. The cutting is typical native Burma cutting at good (5).  The depth is a little shallow at 62.3%, so that affects the brilliancy but the stone does look larger than 13 carats. The finish is really high at (3-4).  The TQIR is a rare Exceptional to Excellent, probably due to the large size.

20210620-1302sothebys.jpg(Credit: Sotheby's)

See photo (above) from the Sotheby's catalog.  We can see the stone has been remounted since the 2006 AGL Colored Stone Grading Report.  The new mounting also shows up in the 2021 AGL Prestige Gemstone Report (See below).  This is a perfect example of how to properly mount a gemstone to close the window, making the stone appear more brilliant.  The window in the 2006 AGL photo of the mounting is gone.  Excellent job Carvin French.  Take note of this critical information if you are considering mounting these stones.

Regretfully, the auction house or previous owner did not request a full Prestige Gem Report.  It would have been interesting to compare.  Generally speaking, Chris Smith of AGL only gives one number on the top line of the color grade.  For example, he would probably have called the 13.02 a 4/70.  The old ECA1 exponent is now gone.  The new AGL document does state the stone is a red Burma with no heat and no clarity enhancement, just like the 2006 AGL document.  The 2006 AGL document states the stone is Classic Burma and the 2021 AGL does not.  Seems Chris Smith is tougher with this comment compared to Cap Beesley.  So don't expect to see this comment as frequently from Chris Smith. 

These sales clearly show the absolute strength of the current no heat Burma ruby market.  This makes sense if you think about the February coup and last year's Covid.  Travel to Burma has been impossible for over a year and a half. Production has been declining for decades and the only way to get stones out of Burma is to smuggle them. Because of the Western countries' Burma ban, we probably won't see any new goods anytime soon.

We presently have an old 3 carat ruby, and the grading is very similar to the 13.02. Check it out at https://www.preciousgemstones.com/inventory-for-sale/ruby-thai-and-burma/301-classic-mogok-unheated-burma-ruby


Burma News

Burmese Gem Smuggling is Part of Border Life
Recently Heard
by raj0540 
May 25, 2021

This article has some errors, for example, the author states the last Burmese ban didn't work because it didn't have time.  We would argue the Burma ban did work over its 13 years, helping Aung San Suu Kyi get elected.  More importantly, the author seems unaware of the new 2021 Burmese gem ban.  Finally, Mozambique rubies now make up the majority of the ruby production, not Burma.  Despite these inaccuracies, the article has some good info on smuggling gems.  Edited for space.  ED

MAE SOT, Thailand – The futility of stopping smuggled goods coming into Thailand hits you like the proverbial two-by-four in the face when you look across the Moi River into Myanmar.

The Friendship Bridge has a constant stream of pedestrian traffic, and at least as many people are crossing the river on inner tubes or in small boats. And in the dry season the two months both sides of New Years many just wade through the knee-deep water.

The Thai military keeps an eye on the movement but makes no effort to stop the traffic. The Thai immigration net starts with a check point nearly 10 kilometers (six miles) inside the country. And at that point they are more concerned with people entering illegally than the movement of goods.

And the crossing into Mae Sot is only one spot along the 2,107-kilometer (1,309.8-mile) border.

Thai law requires import duty on precious stones, and police have on occasion arrested people for breaking the law. But it’s rare and when people are charged it is usually in Bangkok.

The laws are old – Sections 27 of the Customs Act of 1926, and Sections 16 and  17 of the Customs Act of 1939 – and pre-date Thailand becoming a global cutting and polish center for colored stones. Now most stones are imported for value-added work then exported again, so Thailand makes money from the business and the duty charge doesn’t help encourage bringing stones to Thailand. For some time when Thailand produced its own rough from mines near Cambodia and Myanmar, they didn’t need the imported goods. Now though, with their own mines dried up, the rough has to come from outside Thailand.

In America it is legal to import loose stones and not pay duty, as long as you declare their value. Even stones illegally taken from their country of origin can be imported without duties to the United States.

But, Thailand has not changed their laws to accommodate their gems and jewelry industry; so the duty charges remain. And duties add cost, and smuggling is easy and cheap, but adds one more obstacle in an arduous and risky business.

That is the smuggling on the Thai side, in Myanmar it’s more difficult.

An indication of how spread out the industry is in Thailand, it was in Chanthaburi in the east of the country near Cambodia, that a man who smuggled colored stones out of Myanmar explained part of the game.

He said the trickiest part is in Myanmar itself where the over-bearing military government wants their take and imposes an export tax on all stones. The generals have made efforts to increase gem sales within the country so more of the money stays in Myanmar.

On September 29, 1995, they enacted the Myanmar Gems Law to foster a free market for gems. The law allowed dealers to sell the stones mined, cut and polished in Myanmar on the open market in Myanmar.

But the seller in Chanthaburi said vast amounts of stones continue to be smuggled out of Myanmar, with a lot of people involved carrying small amounts.
Some deliver to buyers at the border, and others bring the stones to market in Thailand themselves.

It’s hard to get details of how things are moved within Myanmar, with most smugglers seeing little benefit in telling, and suspicious when people ask too many questions.

But, as some say in Mae Sot, stones travel by all means. Even the soldiers smuggle stones. And some of the ethnic armies that have signed peace deals with the Yangon generals are involved, too. In fact smuggling occurs at virtually every level.

Those who don’t want to smuggle the goods themselves can find people who will.

The route from the mines at Mogok and Mong Hsu for colored stones, and Hpakan for jade is by far more dangerous and difficult in Myanmar. It is generally a two-day journey to Mae Sot, often much of it on foot, and there are a host of potential dangers passing through areas controlled by various groups and fees paid along the way.

But, the smuggling routes are decades, even centuries, old so well established with their own accepted rules. They are so entrenched that many consider it carrying goods along a trade route not smuggling.

Once in Thailand, moving stones in small amounts is pretty easy and requires few precautions. But if someone wants to move a lot of valuable stones it is wise to make arrangements. And it can be cheaper to pay the right people a small sum of a few thousand baht (a hundred or so dollars) before moving the stones, than having to pay them a lot after being discovered with them.

Stones sometimes piggyback with other goods coming into Thailand from Myanmar.

The Myanmar vegetables and perishable produce go little further than the border towns, but teak goods, old and antique furniture and ornaments from a desperately poor country selling its heritage to survive, are pretty common.

And then there are the drugs.

The movement of metamphetamine the Thais call “ya ba” (crazy drug) started changing the border dynamics about 2000 when the drug started being manufactured in large quantities along the border regions.

Crackdowns on the drug seen as destroying the fabric of Thai life were severe and common. More than 2,500 drug dealers were killed in 2002 during the government’s effort to ride Thailand of the drug. Government authorities were quick to point out most of the killing was between drug dealers.

The result for the gem trade was the more thorough searches for drugs could also turn up stones, which would drive the price up with the carrier having to pay a “fine” to continue with their wares. But, the authorities look for big shipments of drugs, so the impact on caring small amounts of stones has been minimal.

Still, the drug trade is widespread along the border regions, and sometimes linked to the gem trade. The United Wa State Army (UWSA), one of Myanmar’s numerous ethnic armies, is one group involved in the drug trade, and using the gem trade to hide their drug dealings, according to Thai government sources.

The military government in Yangon signed a deal with the UWSA in June 2001, which included the condition they stopped dealing in drugs and turn to gems.
But according to Thai government sources, the UWSA decided the two businesses were better than one. And they reportedly used the bi-annual gem auctions hosted by the Myanmar Gems Enterprise to launder drug money. At past auctions, Wa traders bid on their own gems paying more than the original costs to launder the money.

But a lot of gem dealers say the drug connection is overblown. They point out that it’s too risky to transport gems with drugs. Carrying them alone is safer and there are many willing to do so.

Finding “mules” to carry stones is easy enough with much of Myanmar in dire economic straights. Migrants come to Thailand in the hundreds of thousands looking for work. An Amnesty International report released in June (2005) states migrants from Myanmar take the dangerous, dirty jobs that Thais don’t want.

The report says they are “paid well below the Thai minimum wage, work long hours in unhealthy conditions and are at risk of arbitrary arrest and deportation.”

Some add it’s a long border and gem rough can be carried in small amounts. Some Bangkok gem dealers, in fact, say many stones are “smuggled” into Thailand in coat pockets.

The gems are getting in, have been for centuries, and will continue to do so.

In Mae Sot the number of gem dealers hawking stones during the daily street market has increased in recent years. Now Prasatwithi Road is often crowded between 11 am and 2 pm. And you’re as likely to hear Burmese spoken as Thai.

The stones are from everywhere, including Africa, but most are from Myanmar. But some of them go from Myanmar to Chanthaburi, then back to Mae Sot. Cutting and polishing is much better in Chanthaburi, it’s pretty mediocre in Mae Sot, many say.

Jade has become more abundant, but the more precious stones generate more interest, and rubies remain the biggest draw.

But buyers say more sellers does not necessarily mean more sales. Noi said she had 20 years in the business in Mae Sot, and the quantity of stones is not much more than before, there are just more people selling smaller amounts.

The American embargo of everything from Myanmar had little impact on gems because it didn’t have time to. And now rough from the pariah state is legal again. That might be a good thing considering the futility of a world ruby market without rough from Myanmar, where most dealers estimate about 80 per cent of the original content coming from. And, it’s the better of the lot in the world, too.

During the time when even rough was considered banned from Myanmar, high quality rubies started appearing from Vietnam, Sri Lanka and elsewhere. Now with rough from Myanmar legal – as long as it is significantly improved else where – those same stones are back to being from Myanmar.

American customs agents would be hard pressed to know a Mogok ruby from a Vietnam ruby, anyway, so enforcing the ban would have proven difficult at best.
And those same customs officials have more pressing items to search for such as weapons and drugs.

But its not just rubies and other colored stones that were getting around the embargo. Garment factories reportedly sew on labels that say made in Thailand, China other another country, and through middlemen there sell the clothing in the U.S. and EU countries.

Embargoes are difficult to sustain, and it the case of something as valuable and easily transportable as colored stones, next to impossible.

American companies stopped buying rubies and everything else from Myanmar in 2003 when the United States banned imports of all Myanmar products with the Burmese Freedom and Democracy act enacted on August 28. The ban was in protest of the ruling generals’ human rights abuses.

Then in December 2004 the US Customs department changed the rule on colored stones. The new rules stated that gems mined in Myanmar, but cut and polished in other countries, are not classified as from Myanmar. So rubies and other stones were effectively exempted from the ban.

Most colored stones from Myanmar are cut and polished in Canthaburi, a global center for heat treatment. Even stones already cut and polished in Myanmar, are often done so again because the skill level there is inferior to Thai workmanship.

Still, some American companies have stuck with the ban, reportedly including Tiffany & Co, which in March 2005 said it would not buy stones from Myanmar.
Chairman and CEO Michael Kowalski said in a state: “We support democratic reforms and an end to human rights abuses in that country and we believe our customers would agree with that position.”

According to Myanmar government figures, they earned $22 million at the second of the two official auctions in 2004, an event held twice a year since 1992.

The Myanmar Gems Emporium as it is called dates back to 1964 when it was an informal gathering. Then in 1992 in an effort to earn more from the gems, the generals had the Myanmar Gems Enterprise, under the Ministry of Mines, hold two a year.

But, that was for official sales. The Myanmar government gets nothing from stones smuggled into Thailand.

“There are two ways to get stones from Burma. One is to deal with the Burmese government at their auctions. The other is to deal with people who smuggle it across the border into Thailand. What they are smuggling the government in Burma doesn’t get anything,” a Bangkok gem dealer said.

Jade is another matter. A lot comes into Thailand, but more is going straight to China, with a growing market for the stone in the expanding economy there.

And the jade mines in northern Myanmar are conveniently close to the 2,204-kilometer (1,370-mile) border between the two countries.

It doesn’t seem how tight the generals in Yangon tighten the net; colored stones will continue to travel their well plod routes out of the country and into the world market.

Gem Dealer on Netflix

Where Is Charles Sobhraj, Who Calls Himself 'Alain Gautier' in Netflix's The Serpent, Now? 
Men's Health
By Josh St. Clair 
Apr 8, 2021 

Although not what I consider a real gem dealer, Charles Sobhraj is actually a serial killer and simple thief.  Sure glad I never met him when I was in Bangkok.  Fascinating series worth watching on Netflix, anyway. ED

In Netflix’s BBC pick-up, The Serpent, Tahar Rahim brings to cinematic life once again the story of Charles Sobhraj (alias for much of the series: “Alain Gautier”), the so-called “Bikini Killer,” who preyed on tourists traveling through southeast Asia’s “Hippie Trail” during the 1970s. 

The celebrity of Sobhraj has persisted for some time.  After his release from jail in India in 1997, Sobhraj reportedly sold the rights to his exploits to a French producer for $15 million. His story is one of deception and mass murder. Between 1972 and 1976, Sobhraj is believed to be responsible for between 12 and 24 killings. The victims were all Western travelers visiting Thailand and the Indian subcontinent. 

The BBC/Netflix series likely takes inspiration from the many accounts of Sobhraj’s killings, including Thomas Thompson’s Serpentine, which chronicles not just Sobhraj, partner Marie‐Andrée Leclerc, and apparent henchman Ajay Chowdhury's crimes, but also the harrowing investigation by Dutch diplomat Herman Knippenberg, who is, by all accounts, the hero of the story.

While The Serpent fictionalizes some aspects of the history—mainly the dialogue, which, the series points out, is entirely made up—the underlying tale and its players are all very real. Knippenberg has even said in a recent interview that, at times, the series felt "dangerously close" to the real thing.

Who is Charles Sobhraj?

Sobhraj was born in Japanese-occupied Saigon in 1944. As a child, Sobhraj was reportedly a chronic bed wetter, liar, and thief. In 1962, he was arrested in Paris for stealing a car. After another robbery charge, he served a three-year jail sentence soon after. In prison, he learned karate and Italian. Sobhraj later married and, in 1970, moved with his wife and infant daughter to Greece, then to Hong Kong, then to Macao, where he abandoned them. 

He later met Marie‐Andrée Leclerc who became his mistress and partner. By this time, in the early '70s, he had begun drugging, robbing, and reportedly killing travelers. The drugs would cause dysentery and incapacitate them. Sobhraj was eventually arrested in India in 1971, but he escaped jail by faking an appendicitis. In 1975, Sobhraj was operating as a gem dealer in Bangkok. Sobhraj would later say, “As long as I can talk to people, I can manipulate them.”

One French woman, however, did go to the British Embassy with the story. She was turned away. During this time, Dutch diplomat Herman Knippenberg began independently investigating the death of two Dutch citizens, despite pressure from his superiors to stop. 

“It was all so easy for [Sobhraj],” Knippenberg would say later. “The murders, the deception, everything. He had got away with so much for so long that he believed he was invincible. Personally, I think he might have killed many more. Inside his Bangkok apartment, we found a stack of passports and driver's permits. They could have easily belonged to others.” 

Knippenberg’s investigation led to Sobhraj and Leclerc’s arrest by Thai police. The couple, however, later escaped.

Their freedom was short lived. In New Delhi, they were set upon by a French tour group after the couple had tried to drug them. The Indian government found Sobhraj guilty of only one murder, and he was given a seven-year prison sentence. He escaped several years later by drugging prison guards, but was later arrested. Some speculate the escape was designed to add to his prison sentence and, therefore, avoid extradition to Thailand where he could be executed for his crimes.

Leclerc had denied any knowledge of Sobhraj’s murders. (It is believed that she did help Sobhraj drug at least one of his victims.) One victim later claimed that Leclerc “had to know about it. Anyone with eyes and ears could see what was going on in this apartment.” However, the same Indian court that sentenced Sobhraj overturned Leclerc’s conviction. She had been diagnosed with cancer and was allowed her to return to Canada. She died there in 1984.

By the time Sobhraj left Indian prison in 1997, the time frame needed for him to be tried in Thailand had lapsed. He was free. He immediately moved to Paris, embracing his public infamy. 

Where is Charles Sobhraj now?

In 2003, Sobhraj was arrested in Kathmandu for murder and traveling with a false passport. The murders—American backpacker Connie Jo Boronzich and Canadian tourist Laurent Carrière—had occurred in 1975. He was given a life sentence.

As in the Netflix series, it was Knippenberg's documentation that would help convict Sobhraj. “He wanted to move from the shadows into the limelight by showing up in the one place where he knew he had committed murders but they would not have the evidence anymore,” Knippenberg told the Daily Mail in an interview. “But he forgot I still had the documents. He was a gambler. It was like he always did with casinos, putting everything on black. But then it landed on red.”  With Sobhraj's arrest, Knippenberg's nearly 30-year pursuit of the man had finally, it appeared, come to an end. “It took a long time to get Sobhraj, many years,” he said. “But I had to do it. He got inside me like some sort of tropical malaria. He wouldn't go away. This is not over until Sobhraj and I are in different worlds. If there is a Hell, I am sure he is a candidate.”

Sobhraj is still currently serving out his life sentence in Nepal. He is 76 and has reportedly received several heart surgeries while in prison.