A major gem auction is underway in Burma despite tightening Western sanctions that include calls for a boycott of Burmese gems. The sanctions follow the Burmese government's crackdown on pro-democracy protests and are aimed at stopping the trade in so-called "blood rubies" and other Burmese gems. VOA's Bill Rodgers reports.

Buyers inspect raw gemstones at an auction in Burma (file photo, 2004)

Dealers from more than 20 countries are registered for the auction, where – as images from 2004 show – blocks of raw, uncut jade and gems are on sale. 

The gem auctions are a lucrative source of foreign exchange for Burma's military government.  And the auctions are being held just weeks after Burmese security forces violently crushed pro-democracy demonstrations spearheaded by Buddhist monks. The crackdown has triggered efforts in the United States, Europe and elsewhere to tighten already existing sanctions against Burma. 

Congressman Tom Lantos

On Capitol Hill, House Foreign Affairs Committee chairman Tom Lantos has introduced a bill that would strengthen the ban on Burmese gem sales to include those that come from third countries.  "It will make it impossible for the junta to sell their gems by pretending that they come from China and Thailand,” said the congressman. “These are Burmese gems and I think our legislation will put an end to the generals enriching themselves by using subterfuge in selling their precious stones."

More than 90 percent of the world's rubies and fine-quality jade comes from Burma.  And gemstones are Burma's third-largest export, earning several hundred million dollars over the past year.

A cut and polished ruby undergoes inspection

Most of this money goes to Burma's military leaders, says American jeweler Brian Leber who is lobbying Congress to stop the trade.

"The regime has unprecedented control over the gem industry.  They have a majority share in every mine, they issue the licenses and permits.  To become a partner in a mine usually requires being a senior government official or a crony of the government," said Mr. Leber, the representative from the Jewelers' Burma Relief Project.

Sold as uncut stones – many of Burma's rubies end up in Thailand where they are cut, polished and sold in jewelry stores or exported.  Highly prized for their deep red color, they evade U.S. import restrictions because a loophole in American law considers them "Thai" or third-country rubies.

Pornchai Chuenchomlada heads a Thai jewelers association. He acknowledges there is international pressure to stop the practice, but doubts it will work. "Some of us are not happy with the things that happened to this country. And some of us also don't want to buy any gems from the Burmese.  But a lot of people who are buying these gemstones from the Burmese are still buying. So we have two sides."

Rubies are prized gemstones for jewelry

Some American jewelry stores continue to sell Burmese gems cut in third countries, but the 11,000-member Jewelers of America trade organization has come out in support of the Lantos bill.  Peggy Jo Donahue is the organization's public affairs director. "That would change the law in a way that would no longer allow Burmese gemstones to come into the country and it was the feeling of our membership that that would be the right thing to do under the circumstances," she said.

With the threat of sanctions, there are conflicting media reports on this year's auction attendance, though deals are still being made.  That prompts this warning from Congressman Lantos: "Many people have absolutely no moral compunctions in dealing with a totalitarian state.  This is not unique to Burma -- we've had this experience through the decades.  Nevertheless, we will have sufficiently tight legislation that will make it impossible for people to make money on these blood jewels."

Lantos's bill has passed two House committees and is expected to be voted on later this year.