Sec. 1293. Guidance relating to the mining sector of Burma
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Congress finds the following: In 2015, the nongovernmental organization Global Witness estimated that the value of total production of jade in Burma in 2014 was $31,000,000,000, almost 48 percent of the official gross domestic product of Burma. As much as 80 percent of that jade sold is smuggled out of Burma. Burma’s military and associated entities, including companies owned or controlled by Myanmar Economic Corporation and Myanmar Economic Holding Limited, their affiliated companies, and companies owned or controlled by current and former senior military officers or their family members, are linked to the mining sector, including the gemstone industry, and benefit financially from widespread illegal smuggling of jade and rubies from Burma.
Illegal trafficking in precious and semiprecious stones from Burma, including the trade in high-value jade and rubies, deprives the people of Burma and the civilian government of critical revenue and instead benefits military-linked entities, non-state armed groups, and transnational organized criminal networks. In 2016, the Government of Burma began to take steps to reform aspects of the mining sector, but the Gemstone Law adopted in January 2019 does not adequately address corruption and tax avoidance, conflicts of interest, or the factors fueling conflict in Kachin State and other gemstone mining areas.
The lifting in October 2016 of United States sanctions on the importation of jade and jadeite and rubies from Burma allowed such gemstones to legally enter the United States market, but some retailers have refrained from sourcing gemstones of Burmese origin due to governance and reputational concerns. It is the sense of Congress that— notwithstanding Burma’s Trafficking in Persons ranking, the President should continue to provide assistance to Burma, pursuant to the waiver authority under section 110(d)(4) of the Trafficking Victims Protection Act of 2000 ( 22 U.S.C. 7107(d)(4) ), in order to re-engage with the Government of Burma with respect to the mining sector and should make available technical, capacity-building and other assistance through the Department of State or the United States Agency for International Development to support the Government of Burma in efforts to reform the gemstone industry; and companies that seek to import to the United States gemstones or minerals that may be of Burmese origin or articles of jewelry containing such gemstones should— obtain such materials exclusively from entities that satisfy the transparency criteria described in subsection (d)(2) or from third parties that can demonstrate that they sourced the materials from entities that meet such criteria; and undertake robust due diligence procedures in line with the Due Diligence Guidance for Responsible Business Conduct and Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas promulgated by the Organization for Economic Cooperation and Development.
Not later than 120 days after the date of the enactment of this subtitle, and annually thereafter until the date described in subsection (e), the Secretary of State shall submit to the appropriate congressional committees, and publish on a publicly available website, a list of each entity described in subsection (d)(1) that— participates in Burma's mining sector; publicly discloses beneficial ownership, as such term is defined for purposes of the Myanmar Extractive Industry Transparency Initiative ( Myanmar EITI ); is not owned or controlled, either directly or indirectly, by the Burmese military or security forces, any current or former senior Burmese military officer, or any person sanctioned by the United States pursuant to any relevant sanctions authority; and is making significant progress toward meeting the criteria described in subsection (d)(2) .
The entities described in this subsection are the following: Entities that produce or process precious and semiprecious gemstones. Entities that sell or export precious and semiprecious gemstones from Burma or articles of jewelry containing such gemstones. The criteria described in this subsection are the following: The entity publicly discloses any politically exposed persons, officers, directors or beneficial owners, as defined under the Myanmar EITI. The entity publicly discloses valid authorization, license, or permit to produce, process, sell, or export minerals or gemstones, as applicable.
The entity publicly discloses payments to the Government of Burma, including tax and non-tax, license, or royalty payments, and other payments or contract terms as may be required under Myanmar EITI standards. The entity undertakes due diligence, in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, including public reporting. The Secretary shall periodically update the publicly available version of the list described in subsection
(c)as appropriate. The Secretary shall issue guidance for entities in the United States private sector with respect to the best practices for supply-chain due diligence that are applicable to importation of gemstones or minerals that may be of Burmese origin or articles of jewelry containing such gemstones, including with respect to transactions with entities approved for inclusion in the list published pursuant subsection
(c), in order to mitigate potential risks and legal liabilities associated with the importation of such items. The date described in this section is the date on which the President certifies to the appropriate congressional committees that the Government of Burma has taken substantial measures to reform the mining sector in Burma, including the following: Require the mandatory disclosure of payments, permit and license allocations, project revenues, contracts, and beneficial ownership, including the identification any politically exposed persons who are beneficial owners, consistent with the approach agreed under the Myanmar EITI and with due regard for civil society participation. Separate the commercial, regulatory, and revenue collection responsibilities within the Myanmar Gems Enterprise and other key state-owned enterprises to remove existing conflicts of interest. Monitor and undertake enforcement actions, as warranted, to ensure that entities— adhere to environmental and social impact assessment and management standards in accordance with international responsible mining practices, the country's environmental conservation law, and other applicable laws and regulations; and uphold occupational health and safety standards and codes of conduct that are aligned with the core labor standards of the International Labour Organisation and with domestic law. Address the transparent and fair distribution of benefits from natural resources, including through local benefit-sharing. Reform the process for valuation of gemstones at the mine-site, including developing an independent valuation system to prevent undervaluation and tax evasion. Require companies bidding for jade and ruby mining, finishing, or export permits to be independently audited upon the request of the Government of Burma and making the results of all such audits public. Establish credible and transparent procedures for permit allocations that are independent from external influence, including scrutiny of applicants that prevents unscrupulous entities from gaining access to concessions or the right to trade in minerals or gemstones. Establish effective oversight of state-owned enterprises operating in such sector, including through parliamentary oversight or requirements for independent financial auditing.
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Sec. 1293
Guidance relating to the mining sector of Burma
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