Burmese Gem Smuggling is Part of Border Life

MAE SOT, Thailand – The futility of stoppingauctions, Wa traders bid on their own gems
smuggled goods coming into Thailand hits you likepaying more than the original costs to launder the
the proverbial two-by-four in the face when youmoney.
look across the Moi River into MyanmarBut a lot of gem dealers say the drug connection
The Friendship Bridge has a constant stream ofis overblown. They point out that it’s too
pedestrian traffic, and at least as many peoplerisky to transport gems with drugs. Carrying
are crossing the river on inner tubes or in smallthem alone is safer and there are many willing to
boats. And in the dry season the two monthsdo so.
both sides of New Years many just wadeFinding “mules” to carry stones is
through the knee-deep water.easy enough with much of Myanmar in dire
The Thai military keeps an eye on the movementeconomic straights. Migrants come to Thailand in
but makes no effort to stop the traffic. The Thaithe hundreds of thousands looking for work. An
immigration net starts with a check point nearlyAmnesty International report released in June
10 kilometers (six miles) inside the country. And at(2005) states migrants from Myanmar take the
that point they are more concerned with peopledangerous, dirty jobs that Thais don’t
entering illegally than the movement of goods.want.
And the crossing into Mae Sot is only one spotThe report says they are “paid well below
along the 2,107-kilometerthe Thai minimum wage, work long hours in
(1,309.8-mile) border.unhealthy conditions and are at risk of arbitrary
Thai law requires import duty on precious stones,arrest and deportation.”
and police have on occasion arrested people forSome add it’s a long border and gem
breaking the law. But it’s rare and whenrough can be carried in small amounts. Some
people are charged it is usually in Bangkok.Bangkok gem dealers, in fact, say many stones
The laws are old - Sections 27 of the Customsare “smuggled” into Thailand in coat
Act of 1926, and Sections 16 andpockets.
17 of the Customs Act of 1939 – andThe gems are getting in, have been for centuries,
pre-date Thailand becoming a global cutting andand will continue to do so.
polish center for colored stones. Now mostIn Mae Sot the number of gem dealers hawking
stones are imported for value-added work thenstones during the daily street market has
exported again, so Thailand makes money fromincreased in recent years. Now Prasatwithi Road is
the business and the duty charge doesn’toften crowded between 11 am and 2 pm. And
help encourage bringing stones to Thailand. Foryou’re as likely to hear Burmese spoken as
some time when Thailand produced its own roughThai.
from mines near Cambodia and Myanmar, theyThe stones are from everywhere, including Africa,
didn’t need the imported goods. Nowbut most are from Myanmar. But some of them
though, with their own mines dried up, the roughgo from Myanmar to Chanthaburi, then back to
has to come from outside Thailand.Mae Sot. Cutting and polishing is much better in
In America it is legal to import loose stones andChanthaburi, it's pretty mediocre in Mae Sot,
not pay duty, as long as you declare their value.many say.
Even stones illegally taken from their country ofJade has become more abundant, but the more
origin can be imported without duties to theprecious stones generate more interest, and
United States.rubies remain the biggest draw.
But, Thailand has not changed their laws toBut buyers say more sellers does not necessarily
accommodate their gems and jewelry industry;mean more sales. Noi said she had 20 years in the
so the duty charges remain. And duties add cost,business in Mae Sot, and the quantity of stones is
and smuggling is easy and cheap, but adds onenot much more than before, there are just more
more obstacle in an arduous and risky business.people selling smaller amounts.
That is the smuggling on the Thai side, inThe American embargo of everything from
Myanmar it’s more difficult.Myanmar had little impact on gems because it
An indication of how spread out the industry is indidn’t have time to. And now rough from
Thailand, it was in Chanthaburi in the east of thethe pariah state is legal again. That might be a
country near Cambodia, that a man whogood thing considering the futility of a world ruby
smuggled colored stones out of Myanmarmarket without rough from Myanmar, where
explained part of the game.most dealers estimate about 80 per cent of the
He said the trickiest part is in Myanmar itselforiginal content coming from. And, it’s the
where the over-bearing military governmentbetter of the lot in the world, too.
wants their take and imposes an export tax on allDuring the time when even rough was considered
stones. The generals have made efforts tobanned from Myanmar, high quality rubies started
increase gem sales within the country so more ofappearing from Vietnam, Sri Lanka and elsewhere.
the money stays in Myanmar.Now with rough from Myanmar legal – as
On September 29, 1995, they enacted thelong as it is significantly improved else where
Myanmar Gems Law to foster a free market for– those same stones are back to being
gems. The law allowed dealers to sell the stonesfrom Myanmar.
mined, cut and polished in Myanmar on the openAmerican customs agents would be hard pressed
market in Myanmar.to know a Mogok ruby from a Vietnam ruby,
But the seller in Chanthaburi said vast amounts ofanyway, so enforcing the ban would have proven
stones continue to be smuggled out of Myanmar,difficult at best.
with a lot of people involved carrying smallAnd those same customs officials have more
amounts.pressing items to search for such as weapons
Some deliver to buyers at the border, and othersand drugs.
bring the stones to market in ThailandBut its not just rubies and other colored stones
themselves.that were getting around the embargo. Garment
It’s hard to get details of how things arefactories reportedly sew on labels that say made
moved within Myanmar, with most smugglersin Thailand, China other another country, and
seeing little benefit in telling, and suspicious whenthrough middlemen there sell the clothing in the
people ask too many questions.U.S. and EU countries.
But, as some say in Mae Sot, stones travel by allEmbargoes are difficult to sustain, and it the case
means. Even the soldiers smuggle stones. Andof something as valuable and easily transportable
some of the ethnic armies that have signedas colored stones, next to impossible.
peace deals with the Yangon generals areAmerican companies stopped buying rubies and
involved, too. In fact smuggling occurs at virtuallyeverything else from Myanmar in
every level.2003 when the United States banned imports of
Those who don’t want to smuggle theall Myanmar products with the Burmese Freedom
goods themselves can find people who will.and Democracy act enacted on August 28. The
The route from the mines at Mogok and Mongban was in protest of the ruling generals’
Hsu for colored stones, and Hpakan for jade is byhuman rights abuses.
far more dangerous and difficult in Myanmar. It isThen in December 2004 the US Customs
generally a two-day journey to Mae Sot, oftendepartment changed the rule on colored stones.
much of it on foot, and there are a host ofThe new rules stated that gems mined in
potential dangers passing through areas controlledMyanmar, but cut and polished in other countries,
by various groups and fees paid along the way.are not classified as from Myanmar. So rubies and
But, the smuggling routes are decades, evenother stones were effectively exempted from
centuries, old so well established with their ownthe ban.
accepted rules. They are so entrenched thatMost colored stones from Myanmar are cut and
many consider it carrying goods along a tradepolished in Canthaburi, a global center for heat
route not smuggling.treatment. Even stones already cut and polished in
Once in Thailand, moving stones in small amountsMyanmar, are often done so again because the
is pretty easy and requires few precautions. But ifskill level there is inferior to Thai workmanship.
someone wants to move a lot of valuable stonesStill, some American companies have stuck with
it is wise to make arrangements. And it can bethe ban, reportedly including Tiffany & Co,
cheaper to pay the right people a small sum of awhich in March 2005 said it would not buy stones
few thousand baht (a hundred or so dollars)from Myanmar.
before moving the stones, than having to payChairman and CEO Michael Kowalski said in a
them a lot after being discovered with them.state: “We support democratic reforms
Stones sometimes piggyback with other goodsand an end to human rights abuses in that
coming into Thailand from Myanmar.country and we believe our customers would
The Myanmar vegetables and perishable produceagree with that position.”
go little further than the border towns, but teakAung Din, a Burmese co-founder of the US
goods, old and antique furniture and ornamentsCampaign for Burma called it a good policy.
from a desperately poor country selling its“Mining in Burma (Myanmar) supports the
heritage to survive, are pretty common.ruling dictator while bleeding the Burmese people,
And then there are the drugs.which is why no one should buy these
The movement of metamphetamine the Thais‘blood gems’,” he told
call “ya ba” (crazy drug) startedThai-based Irrawaddy magazine.
changing the border dynamics about 2000 whenGems are currently a main source of income for
the drug started being manufactured in largethe military government.
quantities along the border regions.According to Myanmar government figures, they
Crackdowns on the drug seen as destroying theearned $22 million at the second of the two
fabric of Thai life were severe and common. Moreofficial auctions in 2004, an event held twice a
than 2,500 drug dealers were killed in 2002 duringyear since 1992.
the government’s effort to ride Thailand ofThe Myanmar Gems Emporium as it is called
the drug. Government authorities were quick todates back to 1964 when it was an informal
point out most of the killing was between druggathering. Then in 1992 in an effort to earn more
dealers.from the gems, the generals had the Myanmar
The result for the gem trade was the moreGems Enterprise, under the Ministry of Mines, hold
thorough searches for drugs could also turn uptwo a year.
stones, which would drive the price up with theBut, that was for official sales. The Myanmar
carrier having to pay a “fine” togovernment gets nothing from stones smuggled
continue with their wares. But, the authorities lookinto Thailand.
for big shipments of drugs, so the impact on“There are two ways to get stones from
caring small amounts of stones has been minimal.Burma. One is to deal with the Burmese
Still, the drug trade is widespread along the bordergovernment at their auctions. The other is to deal
regions, and sometimes linked to the gem trade.with people who smuggle it across the border into
The United Wa State Army (UWSA), one ofThailand. What they are smuggling the
Myanmar’s numerous ethnic armies, is onegovernment in Burma doesn’t get
group involved in the drug trade, and using theanything,” a Bangkok gem dealer said.
gem trade to hide their drug dealings, according toJade is another matter. A lot comes into Thailand,
Thai government sources.but more is going straight to China, with a growing
The military government in Yangon signed a dealmarket for the stone in the expanding economy
with the UWSA in June 2001, which included thethere.
condition they stopped dealing in drugs and turn toAnd the jade mines in northern Myanmar are
gems.conveniently close to the 2,204-kilometer
But according to Thai government sources, the(1,370-mile) border between the two countries.
UWSA decided the two businesses were betterIt doesn’t seem how tight the generals in
than one. And they reportedly used the bi-annualYangon tighten the net; colored stones will
gem auctions hosted by the Myanmar Gemscontinue to travel their well plod routes out of the
Enterprise to launder drug money. At pastcountry and into the world market.