Trump Administration Releases New Customs Enforcement Strategy
On June 3, 2026, President Donald Trump issued an Executive Order (the “EO”), Strengthening Customs Enforcement, directing the Department of Homeland Security (“DHS”) and US Customs and Border Protection (“CBP”) to implement sweeping changes to the US customs regulatory framework. The EO targets what the Administration characterizes as “[s]ystemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes” that have “created opportunities for malign actors to evade Federal law.” In response, the EO calls for “comprehensive reform” of customs enforcement, with a focus on “protecting national security, promoting lawful trade, ensuring the timely collection of duties, modernizing systems and processes, bolstering compliance mechanisms, increasing transparency, and protecting Americans and the domestic economy.” It specifically identifies undervaluing imports, withholding critical information about importers of record (“IORs”) and imported goods, and avoiding payment of duties through “various arrangements and schemes” as issues to address through several actions, described further below.
Heightened Requirements for Importers of Record
The EO directs significant changes to IOR eligibility and compliance requirements within 180 days (i.e., by November 30, 2026). These revisions include:
- Requiring all IORs to maintain a “minimum level of tangible domestic assets, bonding, or both, as determined by [CBP].”
- Increasing the minimum required bond coverage for IORs.
- Requiring IORs to provide CBP with “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.”
- Establishing a “good standing” requirement, based on an IOR’s and its affiliates’ history of compliance with US customs and trade laws and payment of required customs liabilities. Critically, IORs not in “good standing” will not be allowed to import into the United States or conduct activities directly related to importation, including designating a customs broker to act as IOR on their behalf. IORs found to have illegally imported fentanyl, nitazene, or other illicit substances will not be in “good standing.”
- Enhancing vetting procedures for all importers, including “foreign IORs, affiliates of IORs, customs brokers, custodians of bonded merchandise, and freight forwarders.”
New Restrictions on Foreign IORs
Also within 180 days of the EO, the Secretary of Homeland Security is required to prohibit all Foreign IORs from filing informal entries pursuant to 19 U.S.C. § 1498, which outlines rules and regulations for the simplified declaration and entry of certain types of imported merchandise, such as low-value shipments, without requiring formal entry. And, under formal entries, a foreign IOR will no longer be able to rely on a continuous bond (except where CBP determines revenue would be fully protected and compliance assured) and must either be validated in CBP’s Customs Trade Partnership Against Terrorism (“CTPAT”) program or use a CTPAT-validated and licensed customs broker to file entries with CBP.
Significantly, the EO draws a sharp distinction between “U.S. IORs” and “foreign IORs.” The EO defines a “U.S. IOR” as an individual who is a US citizen or lawful permanent resident, or an entity organized under US law, located in the United States, with controlling beneficial owners who are US citizens or lawful permanent residents at all times (or that owns a significant amount of US real property). A “foreign IOR” is any IOR that does not meet this definition. The EO also instructs DHS to issue guidance to prevent entities from using shell companies, sham transactions, or artificial corporate structuring to qualify as a US IOR.
Enhanced Import Disclosure and Certification Requirements
The EO directs CBP to establish heightened import disclosure and certification requirements, including certifying compliance with critical supply chain requirements such as the Countering America’s Adversaries through Sanctions Act. Importers will also be required to disclose foreign tax and global business identifiers and provide detailed supply chain and production method information, such as the manufacturer’s product identifier or key specifications (e.g., composition, grade, or size). Within 90 days of the EO (i.e., by September 1, 2026), CBP is also required to mandate submission of any documentation that the foreign exporter was required to submit to its home customs administration prior to export to the United States.
Increased Enforcements and Penalties
Finally, the EO directs CBP to enforce liquidated damages claims against bonds, restrict in-bond utilization, increase audits, and impose maximum penalties on brokers who fail to conduct due diligence, repeatedly represent noncompliant clients, or fail to cooperate with CBP information requests “to the maximum extent permitted by applicable law.”
CBP, with the Attorney General, is directed to prioritize enforcement against forced labor imports, misclassification, undervaluation, and illegal transshipment. Indeed, also within 90 days of the EO, CBP must revise mitigation standards, including through establishing a minimum penalty floor of not less than 50% of the assessed penalty, “absent exceptional circumstances that materially impact national security”; establishing a minimum liquidated damages floor; and eliminating mitigation for repeat offenders. Separately, CBP must expedite and enhance the seizure and disposal of non-compliant imports within the same time frame.
Key Implications and Recommended Actions
Through this EO, the Trump Administration has signaled a significant escalation of customs enforcement and compliance expectations. Importers and related stakeholders should consider the following steps:
First, importers should assess their IOR status under the new definitions. Entities that rely on foreign-based IOR arrangements will need to evaluate whether they qualify as a “U.S. IOR” or whether they must restructure their import operations.
Second, companies should prepare for expanded disclosure requirements, including beneficial ownership information, supply-chain data, manufacturer identifiers, and foreign export documentation.
Third, customs brokers should evaluate their client portfolios for compliance risk. The EO’s imposition of maximum penalties on brokers who represent noncompliant clients or fail to perform due diligence represents a material increase in broker liability.
The Department of Homeland Security has been tasked with taking several steps to implement the updated policies set forth in the EO All importer-related parties should continue to monitor updates regarding customs enforcement under the current Administration.
