A Seinfeld Holiday, Episode 2

January 12th, 2010 by James L. Sweaney, CGA, FGA. GG
Fine Burma Rubies, Loose and Mounted

Fine Burma Rubies, Loose and Mounted

As promised, here's a story that should get some chuckles– it's an episode that turned out to be a long and winding road, so typical of the gemstone and jewelry business.

Several months ago, I was contacted by a gentleman residing in London, England. He was impressed by my series of blogs about Pigeon's Blood Rubies and wanted to know if I could help him find an unheated ruby from Burma that would qualify as “pigeon's blood” color. The gem would be used as the center of an engagement ring.

We offer gem brokering services for high end gemstones, so even though this person was overseas, I decided to give it a try– we are always looking to innovate and build our business, so why not go for the global market!

Right off, we knew it would be a real challenge for three big reasons. First, importing Burma rubies and jade is severely limited in the USA by the Tom Lantos Act, a well intentioned law intended to punish the current government/junta of Myanmar/Burma for among other things, its dismal record on human rights.

Of course, the law of unintended consequences applies– the junta is doing just fine, still raping the country of its treasure and oppressing its people, while many of the miners, gem cutters, dealers and jewelers of Burma and neighboring Thailand who were able to eke out a living from this natural resource have had to go back to work in the rice fields.

We are still allowed to work with Burma rubies imported into the US prior to the enactment of the Lantos Act, Sept. 28, 2009, and to export Burma rubies from the US. The type of stones we work with normally have laboratory documentation that shows their presence in the country prior to the embargo, so I figured we had that problem solved. As I was to learn later, silly me!

Next, our client's criteria really limited the choices available. He wanted a round unheated “pigeon's blood red” stone from Burma, 1 1/2 to 2 carats. Of course, the current embargo has severely limited the supply of Burma goods. Most rubies are cut into ovals and most are heated to enhance clarity and color. And, rubies from 1 1/2 carats up are quite rare.

He was firm about no heat, Burma origin and pigeon's blood color, so my first bit of expert advice was to expand the parameters and at least consider other shapes, so as not to limit his choices for this ultra rare gem.

The next issue was to solve the price question. I knew his budget was at the low end of the market for good to fine unheated Burma rubies, but wanted to see if we could meet the challenge. We work with a small group of elite gem dealers who can supply high quality gems–from a previous sale, I had a general idea of the market and knew this call would be tough.

We contacted our ruby specialists and were able to locate a number of unheated Burma rubies in the general shape and size range, but even with our very modest brokering commission, most were out of his price range. Being British, he had to research the idiom “sticker shock” when I told him what most stones were selling for in his category.

After much research, I was able to find several excellent stones, loose and mounted that would fit most of his criteria– see the picture at the beginning of this article– the two loose stones in that photo, left and center are shown below.

TwoBurmas,crown

These two unheated Burma rubies were very close to the size and shape he preferred, fit his budget, were of fine “pigeon's blood” color, and were documented “no evidence of heat treatment,” the left one by GIA, the other by the Swiss GRS lab.  The two stones were within .o4 ct of each other, but the left one, cut a bit deeper, is more brilliant and of better color even though it faced up smaller. I much preferred the smaller looking stone because of its vivid color and good cut– typical for a gemologist.

My client was delighted with the choices I presented to him. He chose to see the two loose ones and agreed to buy, intimating that he would probably buy both–it had been such a struggle for him to find good stones that would meet his criteria and he had plans for the second stone. Yay!

Now the fun began. The problem was not only how to get these expensive gems to London, but also how to allow my client to see the gems before he paid for them. We didn't expect him to buy ” a pig in the poke!” but we had to make sure our firm was protected as well.

We have an account with a specialty company that acts as a courier for the jewelry trade, specializing in transporting high value shipments both nationally and internationally. As part of their services, they have offices around the world where such shipments can be viewed for approval in a secure environment. The recipient/consignee examines the package in the presence of the courier staff– if he likes the goods, he pays the shipper who then instructs the courier to release the goods to the consignee.

It was the perfect solution– the courier had an office in London that was only a few blocks from where my client worked– all we had to do was to pay for the service!

Here is where the twists and turns in the road really began.

First twist– Because of the Lantos embargo, we had to document the origin and date of import of the rubies into the US– so long as they were in this country before the embargo went into effect, it is legal to ship them. We had lab documents that proved these stones to be exempt from the embargo, so we filled out the appropriate export/import forms. No Problemo!

Our shipper was impressed with the amount and quality of documentation we provided. Even with all the issues surrounding Burma rubies, because we were in compliance with the law, they assured us there would be no problem. Into the package they went, off to London.

Bump in the road #2–The next day, the courier rep. called me and said the package had arrived at the London office and had been rejected– their explanation was that a new customs regulation had just been put into effect in Britain that prohibited the import of Burma rubies into the United Kingdom. The Los Angeles office knew nothing about this new regulation and were just as surprised as we were. The package was being returned, after having been a few hundred yards from my client!

We asked the courier to hold the stones till we figured out something–my client still wanted the stones. We worked on alternate solutions over the next few days. Emails flew back and forth–His fiance would be visiting family in Washington DC shortly after Christmas–could she view the stones in DC? No, but the closest office was Manhattan–could she fly or drive to New York? Yes, that would work, she would be available the week after Christmas.

Long and short, we sent the stones to the New York office, consigned to the fiance– all she had to do was show up, provide identification, view the stones, and call us with a credit card to buy the stones. Once we had approval of the charge, we would instruct the courier to release the stones to her.

Twist #3– The morning the viewing was scheduled, we get a phone call from the client– he's in New York, would like to view the stones, but because the package was consigned to his fiance (per his instructions), the courier wouldn't allow him access, could we do something about it? A couple of hurried calls to the Los Angeles office, emailing specific instructions and waivers, the client is allowed into the viewing room.

Turn #4– My client calls, loves the stones, but had decided to purchase one stone, not both.  A disappointment but not a surprise– glad to sell something in these hard times, so we would ring it up and release his stone.

Bump #5–Based on prior experience with large payments via credit cards, we had previously advised the client to make sure his bank was aware of the impending charge, so it would clear when we input the transaction. Sure enough, when we run the charge thru our credit card system, it is declined.

Our frustrated client, not to be denied, calls his bank in England, reads them the riot act, and tells us to try again. With the help of a customer service person from our credit card processor and the perseverance of my wife Kaye, the charge goes through, so all I have to do is instruct the courier to give the chosen stone to my client.

Twist #6– The courier informs me that they can only deliver the entire package or return the package to me. Under their business model, they aren't allowed to open a package themselves– they can't give him the one stone he wants. All or nothing!

The finish line–My client and I worked out a creative solution (which I won't disclose) and all's well that ends well. My client and fiance are happily back in England. We referred them to the Worshipful Company of Goldsmiths for a good local goldsmith who can make their ring. We hope to see photo's of the finished work and of course, of the wedding.  We'll post these as soon they're available.

The moral of the story is that we at Mardon go the extra mile for our clients. Our gemological credentials and many years of experience buying and selling colored gemstones and diamonds, our extensive network of contacts within the gem industry, and our commitment to doing the job the right way are our commercial capital. In today's difficult economy, hard assets like rare gems are appreciating strongly as investors look to protect the value of their dollars. Give us a call or email if you are seriously looking for the exotic, the unusual, the rare gemstone.

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