CLA-2-71:RR:NC:SP:233 R03219
Mr. Vincent Hughes
Kuwayama USA
1200 Avenue of the Americas
New York, NY 10036
RE: The tariff classification and eligibility for duty-free treatment under the GSP of 14kt yellow gold box chain from Thailand; double substantial transformation.
Dear Mr. Hughes:
In your letter dated February 3, 2006, you requested a tariff classification ruling.
The product is 14kt yellow gold box chain BX001, measuring 18 inches in length, 0.5 mm in width and weighing 1 gram. The chain body and the catch ring will be made in Thailand and represent 75% of overall value. The spring ring and the logo plate representing 25% of overall value will be imported from either Japan or Italy into Thailand. 14 kt grain composed of 58.5% gold, 10% copper, and 31.5% silver will be imported from Japan.
The manufacturing procedure conducted in Thailand will be as follows:
The grain will be melted down and the alloy will be checked for the correct proportion of gold, copper and silver.
If necessary, the alloy will be adjusted to the correct levels with alloys bought locally in Thailand.
Wire will then be drawn from the gold bars.
The wire will then be fed into a machine whereby chain will be made.
The chain will be dipped in a soldering powder to strengthen the metal and links.
The chain will then be diamond cut.
The spool of chain will then be cut into the desired lengths i.e. 18 inches, 10 inches, etc.
The catch loop, logo plate and spring ring are added to the chain.
The chain is dipped in an acid bath to remove any soldering residue during the attachment of the spring ring, catch loop and logo plate.
The chain will be plated.
The pendant chain will be shipped directly from Thailand to the United States and resold to either jewelry retail stores or to other jewelry manufacturers. You have submitted a photograph of a sample chain with your request.
The applicable subheading for the 14kt yellow gold box chain will be 7113.19.2900, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal: Of precious metal whether or not plated or clad with precious metal: Other: Other.” The rate of duty will be 5.5% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.\
Articles classifiable under subheading 7113.19.2900, HTSUS, which are products of Thailand, are entitled to duty free treatment under the Generalized System of Preferences (GSP), if the direct cost of processing operations performed in Thailand equals or exceeds 35% of the appraised value of the merchandise at the time of entry into the U.S. The grain, which is melted to form gold bars and subsequently manufactured into wire to produce gold box chains, undergoes a double substantial transformation, and, as a result, the cost or value of the gold may be included in the 35% value-content calculation. Accordingly, if the sum of the cost or value of the gold plus the direct costs of processing operations performed in Thailand equals or exceeds 35% of the appraised value of the merchandise at the time of entry into the U.S., the articles will qualify for duty-free treatment under the GSP.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Lawrence Mushinske at 646-733-3036.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division