Subpart D--Status of Merchandise in a Zone

Sec. 146.41  Privileged foreign status.

    (a) General. Foreign merchandise which has not been manipulated or 
manufactured so as to effect a change in tariff classification will be 
given status as privileged foreign merchandise on proper application to 
the port director.
    (b) Application. Each application for this status will be made on 
Customs Form 214 at the time of filing the application for admission of 
the merchandise into a zone or at any time thereafter before the 
merchandise has been manipulated or manufactured in the zone in a manner 
which has effected a change in tariff classification.
    (c) Supporting documentation. Each applicant for this status shall 
submit to the port director, with the application, an invoice notated as 
provided for in Sec. 141.90 of this chapter.
    (d) Determination of duties and taxes. Upon receipt of the 
application and accompanying invoice, the port director may examine the 
merchandise to determine whether to approve the application. The 
merchandise will be subject to classification and valuation as provided 
in Sec. 146.65.
    (e) Status as privileged foreign merchandise binding. A status as 
privileged foreign merchandise cannot be abandoned and remains 
applicable to the merchandise even if changed in form by manipulation or 
manufacture, except in the case of recoverable waste (see 
Sec. 146.42(b)), as long as the merchandise remains within the purview 
of the Act. However, privileged foreign merchandise may be exported or 
withdrawn for supplies, equipment, or repair material of vessels or 
aircraft without the payment of taxes and duties, in accordance with 
Secs. 146.67 and 146.69.