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NY N004375

December 27, 2006



TARIFF NO.: 7113.19.2900; 7113.19.5000

Mr. Kevin W. Leonard
Grunfeld, Desiderio, Lebowitz, Silverman and Klestadt LLP 399 Park Avenue
25th Floor
New York, New York 10022-4877

RE: The tariff classification of jewelry from Israel.

Dear Mr. Leonard:

In your letter dated December 13, 2006, on behalf of Naphi Trading Limited, you requested a tariff classification ruling.

Naphi Trading Limited, an Israeli vendor, plans to produce gold jewelry. Naphi will import either 24 or 14 karat gold bars into Israel. The 24k will be alloyed to 14k and then drawn into 6mm wire. The wire will be drawn out to wire sticks measuring 1mm or less. The wire sticks will be inserted into a machine that converts them into unclosed links of 50 to 100 meters in length. The dimensions are specifically designed for bracelets or necklaces. The unclosed chain links will be shipped to Italy where they will be closed, flattened, polished and cut to shorter lengths. Clasps will be added to complete the necklaces and bracelets. The articles will be returned to Israel where they will be cleaned, polished, packaged and shipped directly to the United States.

The applicable subheading for the 14k gold necklaces 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 metal clad with precious metal, Other, Necklaces and neck chains, of gold, Other”. The rate of duty will be 5.5 percent ad valorem. The applicable subheading for the 14k gold bracelets will be 7113.19.5000, HTSUS, which provides for “Articles of jewelry and parts thereof, of precious metal or metal clad with precious metal, Other, Other”. The rate of duty will be 5.5 percent ad valorem.

You also inquire as to whether the Israel Free Trade Agreement is applicable. Eligible articles which are the growth, product or manufacture of Israel and are imported directly into the U.S. from Israel qualify for duty-free treatment provided the sum of 1) the cost or value of materials produced in Israel, plus 2) the direct costs of processing operations performed in Israel is not less than 35 percent of the appraised value of the article at the time it is entered.

The processing of the gold bars into wire is considered a substantial transformation. It has become an intermediate article of commerce. The wire sticks formed into unclosed chain links is also a substantial transformation. Since a double transformation has taken place, the cost of the gold may be included in calculating the 35 percent value-content requirement. The operations performed in Italy constitute finishing operations and therefore do not result in a substantial transformation into a new and different article of commerce. Since the bracelets and necklaces will be returned to Israel for finishing operations, they have re-entered the commerce of Israel and upon shipment to the U.S., will be considered “imported directly” to the U.S.

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/.

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.


Robert B. Swierupski

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