Insights

On June 3, 2026, President Trump issued an Executive Order titled Strengthening Customs Enforcement, directing the Department of Homeland Security (“DHS”) and U.S. Customs and Border Protection (“CBP”) to undertake a broad set of customs enforcement reforms. The Executive Order focuses on importer of record (“IOR”) eligibility, foreign IORs, customs bonds, supply-chain disclosures, broker due diligence, penalties, seizure procedures, and enforcement transparency.

The Executive Order directs DHS and CBP to revise regulations, policies, and guidance on timelines of 45 days, 90 days, 180 days, and one year. Practically, the Executive Order signals that the administration wants CBP to make it harder for noncompliant or hard-to-reach importers to enter goods into the United States without meaningful financial responsibility, documentation, or enforcement exposure.

Importer of Record Eligibility and Foreign Importers of Record

The Executive Order's central focus is the importer of record ("IOR"). The IOR is responsible for making entry, using reasonable care, providing accurate information to CBP, and paying duties, taxes, and fees. Within 180 days, CBP must revise IOR eligibility regulations, guidance, and policies to:

• Require an IOR to maintain a minimum level of domestic assets and/or bond coverage
• Increase the minimum required bond coverage for an IOR.
• Require an IOR to be designated and reported to CBP for formal and informal entries.
• Require additional IOR information, including anticipated import volumes, year organized, ownership disclosures, and any other information CBP considers necessary.

Additionally, the Executive Order places heightened scrutiny on foreign IORs. DHS must take steps to prohibit foreign IORs from filing informal entries. For formal entries the Executive Order directs CBP to impose additional requirements on foreign IORs:

• A foreign IOR may not rely on a continuous bond unless CBP determines that revenue will be fully protected and compliance will be assured.
• A foreign IOR may need to be validated in the Customs Trade Partnership Against Terrorism (“CTPAT”), if eligible, or use a CTPAT-validated and licensed customs broker to file entries with CBP.

U.S. IOR Status and Shell Company Concerns

The Executive Order directs DHS to issue guidance on what it means to be “located in the United States” and to focus on preventing companies from using shell companies, sham transactions, or artificial corporate structures to qualify a foreign-based IOR as a U.S. IOR. At a minimum, an entity must have its principal place of business in the United States, a physical presence where significant business activity occurs, and sufficient tangible U.S. assets.

This language suggests that CBP may scrutinize U.S. entities that exist mainly to serve as importers for foreign manufacturers or sellers. Moving forward, a nominal U.S. address or paper entity may not be enough if the company lacks meaningful U.S. operations, assets, or business activity.

Good Standing and IOR Registry Updates

Within the next 180 days, DHS will require all IORs to maintain good standing with CBP. Critically, CBP must define “good standing” based on an IOR’s and its affiliates’ compliance history, payment of customs liabilities, and other relevant factors. IORs that do not remain in good standing may lose the ability to import into the United States or conduct activities related to importation. The Executive Order states that an IOR not in good standing may not designate a customs broker to act as IOR on its behalf.

Moreover, within the next 180 days, DHS is expected to reorganize the IOR registry and create risk-based tiers to classify IORs based on previous compliance history, audits, and other factors. CBP’s potential incoming formal risk-ranking system means importers should address prior penalties, unpaid duties, unresolved audits, weak documentation, affiliate compliance issues, or repeat violations to avoid future compliance scrutiny.

Other Major Measures

Within the next 180 days, the Memo orders DHS and CBP to:

• Establish enhanced vetting procedures, including recurring vetting, for foreign IORs, affiliates of IORs, customs brokers, custodians of bonded merchandise, and freight forwarders. Given this, CBP may increase scrutiny of brokers, freight forwarders, bonded warehouses, and related parties that support high-risk trade.
• Establish heightened import disclosure and certification requirements related to critical supply-chain laws and enforcement priorities, including the Countering America's Adversaries Through Sanctions Act, and other requirements identified by CBP, in consultation with other agencies.
• Require U.S. importers and foreign exporters to provide timely access to export-side records at CBP request.
• Reduce or eliminate regulatory burdens on voluntary abandonment and increase bond requirements for high-risk shipments.

Enforcement, Penalties, and Recommended Steps for Businesses

The Executive Order directs DHS to increase customs enforcement through audits, bond claims, in-bond restrictions, and maximum penalties for compliance failures. Moreover, following this memo, companies may have fewer chances of reducing penalties after a violation, especially for repeat offenses.

Finally, the DHS and DOJ will prioritize forced labor, misclassification, undervaluation, illegal transshipment, and Enforce and Protect Act (“EAPA”) investigations moving forward. Companies with antidumping or countervailing duty exposure, forced labor concerns, or China-related supply chains should treat this as a significant enforcement warning.

Importantly, this memo serves as an order to direct CBP to issue its own regulations in the coming months. In the interim, companies should take the following steps:

1. Review IOR structures and determine whether any IOR may be treated as a foreign IOR. For U.S. entities acting as IOR, review principal place of business, physical presence, significant business activity, tangible U.S. assets, ownership, and beneficial ownership.
2. Collect more accurate and detailed information from trade partners. Since foreign exporters may treat some of this information as confidential or internal, companies should consider revising supplier agreements, purchase orders, and vendor onboarding documents to permit reasonable access at request.
3. Review bond coverage. Importers should evaluate continuous bonds, single transaction bonds, duty exposure, import volume, and whether current bond levels may become insufficient under future CBP rules.
4. Prepare ownership and affiliate information. CBP may require additional information on beneficial ownership, business affiliations, year of organization, anticipated import volumes, and domestic assets.
5. Strengthen supplier documentation. Importers should collect product specifications, manufacturer identifiers, model or style numbers, composition details, origin support, valuation records, and production-method information before entry.
6. Request foreign export records. U.S. importers should consider contract terms requiring foreign suppliers to provide export-side documentation submitted to foreign customs authorities.
7. Review broker procedures. Importers should confirm that brokers receive accurate written instructions. Brokers should document client due diligence, entry communications, escalation steps, and responses to CBP requests.
8. Monitor CBP implementation. Companies should track Federal Register notices, CBP guidance, CSMS messages, CTPAT developments, bond guidance, and any legislative proposals resulting from the Executive Order.

We regularly assist clients with customs compliance, importer-of-record issues, customs valuation, classification, country of origin, forced labor compliance, prior disclosures, penalty mitigation, and CBP enforcement matters. If you have questions about how this Executive Order may affect your import operations or customs compliance program, please feel free to contact us for assistance.