The tariff classification and GSP treatment of gold jewelry from Cambodia; double substantial transformation.

NY I85447 September 6, 2002 CLA-2-71:RR:NC:SP:233 I85447 CATEGORY: Classification TARIFF NO.: 7113.19.5000 Ms. Laura Denny CBT International, Inc. 110 West Ocean Blvd., Suite 728 Long Beach, CA 90802 RE: The tariff classification and GSP treatment of gold jewelry from Cambodia; double substantial transformation. Dear Ms. Denny: In your letter dated August 22, 2002, on behalf of MLS Diamond Importers, you requested a ruling on the tariff classification and GSP treatment of gold jewelry. The product is gold jewelry from Cambodia. The jewelry is manufactured from 24 karat gold, which is imported into Cambodia from various sources. In Cambodia, a new product is created by melting the 24k gold with an alloy of silver, copper and zinc from various sources to form 18 karat or 14 karat pellets. The pellets are a salable commodity. After the formation of the gold pellets, the jewelry is then manufactured by the casting process or the hand made process (for chains). The applicable subheading for the gold jewelry will be 7113.19.5000, Harmonized Tariff Schedule of the United States (HTS), which provides for articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal… of other precious metal, whether or not plated or clad with precious metal: other: other. The rate of duty will be 5.5% ad valorem. The 24 karat gold which is melted with an alloy of silver, copper and zinc to form 18 karat and 14 karat pellets and subsequently manufactured into gold jewelry 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 Cambodia 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