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Initially the oxime behaves like an enol and reacts with chlorine on carbon. Subsequent loss of a proton leads to the chloroxime. This is an example of γ-elimination. There are two key steps in the formation of the nitrile oxide: the removal of the OH proton by base and the loss of chloride.
An alternative synthesis of nitrile oxides is dehydration of nitroalkanes.
Nitrile oxides are used in the formation of isoxazoles via cycloaddition.