New Executive Order Targets Importer Responsibilities, Obligations and CBP Enforcement of Same

 President Trump Signs Executive Order to Strengthen CBP Enforcement and Importer Responsibilities 

Earlier today, June 3rd, President Trump signed an Executive Order aimed at fortifying the enforcement capabilities of Customs and Border Protection (CBP). This directive specifically targets the evasion of customs duties and places a renewed emphasis on the responsibilities of the importer of record (IOR).

The Secretary of Homeland Security is directed by the Executive Order to modify importer eligibility policies, guidance, and regulations within 180 days of the order's issuance. To ensure alignment with the directive, these updates will incorporate the following requirements, among others:

• • • • Requiring that an IOR maintain at all times a minimum level of tangible domestic assets, bonding, or both, as determined by CBP to be necessary to ensure compliance with U.S. customs and trade laws, and increasing the minimum required bond coverage for an IOR.
      • Requiring that an IOR be designated and reported to CBP, and that a bond, or sufficient tangible domestic assets, or both, be required, for all formal entries under 19 U.S.C. 1484 and informal entries under regulations promulgated pursuant to 19 U.S.C. 1498.
      • Requiring that an IOR provide to CBP additional data and identification information, including anticipated import volumes, year organized, ownership and beneficial ownership disclosures, business affiliation disclosures, and domestic asset disclosures, and any other data that CBP deems necessary.
      • Implementing more rigorous certification and import disclosure protocols. These measures include, but are not limited to:

• • • • • Mandatory certification of compliance regarding vital supply chain regulations, such as 18 U.S.C. 545 and the Countering America's Adversaries through Sanctions Act (Public Law 115-44), alongside other requirements established by CBP in coordination with relevant executive agencies.
        • The disclosure of specific global business identifiers and foreign tax information.
        • Submission of comprehensive data regarding production methods and the supply chain of imported goods, including key specifications like size, grade, or composition, and manufacturer product identifiers such as style or model numbers.

• • • • Enhancing CBP enforcement and penalties for wrongdoing including enforcing liquidated damages claims against bonds for noncompliance, restricting in-bond utilization, increasing audits, and imposing maximum penalties for customs brokers who fail to conduct due diligence, repeatedly represent noncompliant clients, or fail to cooperate in a timely manner with requests for information by CBP.
      • Heightening enforcement action by CBP against imports involving products produced by forced labor, misclassification, undervaluation, and illegal transshipment, including investigations conducted pursuant to the Enforce and Protect Act (Public Law 114-125).

Further, according to the Executive Order, foreign IORs will be prohibited from filing informal entries, which the administration states ensures all parties operate on an "equal footing." This measure is deemed essential for treating IORs equitably according to their specific situations, while simultaneously safeguarding U.S. revenue, domestic industries, and American consumers, and bolstering national security and international relations.

Additionally, the directive outlines specific stipulations for foreign IORs:

• • • • They are generally prohibited from using continuous bonds to satisfy entry requirements. Exceptions may be granted by CBP only if the foreign IOR proves that revenue is fully protected and compliance with all applicable laws and regulations is guaranteed.
      • They must undergo validation within the Customs Trade Partnership Against Terrorism (CTPAT), provided they are deemed eligible by CBP.

The order further specified that IORs failing to maintain "good standing" with CBP will be prohibited from importing into the United States or engaging in any activities directly associated with the importation of merchandise, such as appointing a customs broker to represent them as the IOR.

The Executive Order emphasizes that comprehensive customs reform is essential and overdue to address systemic inefficiencies and noncompliance, such as undervaluation and duty evasion, which threaten national security and the economy. To resolve these issues, the order calls for strengthening enforcement through agency actions and legislation, with a focus on modernizing processes, increasing transparency, and protecting domestic interests.

A new era in Customs enforcement and penalty issuance is coming soon for importers and Customs brokers alike. For those that are not prepared to operate in a highly Customs-compliant manner, it is going to be an unpleasant experience over the next couple of years. We have long been committed to ensuring the highest level of regulatory compliance in all the work we do and our CBP compliance records reflects that posture. We will continue to conduct our business with that same commitment to compliance as we always have and we look forward to doing so with all of our clients.