All of the following will have the status of nonprivileged foreign merchandise:
Foreign merchandise. Foreign merchandise properly in a zone which does not have the status of privileged foreign merchandise or of zone-restricted merchandise;
Waste. Waste recovered from any manipulation or manufacture of privileged foreign merchandise in a zone; and
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.
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