Sec. 146.42  Nonprivileged foreign status.

    All of the following will have the status of nonprivileged foreign 
merchandise:
    (a) Foreign merchandise. Foreign merchandise properly in a zone 
which does not have the status of privileged foreign merchandise or of 
zone-restricted merchandise;
    (b) Waste. Waste recovered from any manipulation or manufacture of 
privileged foreign merchandise in a zone; and
    (c) Certain domestic merchandise. Domestic merchandise in a zone, 
which by reason of noncompliance with the regulations in this part has 
lost its identity as domestic merchandise, will be treated as foreign 
merchandise. Any domestic merchandise will be considered to have lost 
its identity if the port director determines that it cannot be 
identified positively by a Customs officer as domestic merchandise on 
the basis of an examination of the articles or consideration of any 
proof that may be submitted promptly by a party-in-interest.