CBP Issues Interim Final Rule Restricting Foreign Importers of Record and Expanding Customs Broker Liability

On November 6, 2026, U.S. Customs and Border Protection (“CBP”) published an interim final rule establishing new restrictions and requirements for foreign importers of record (the “IFR”).¹ The IFR implements part of Executive Order 14411, Strengthening Customs Enforcement, which we discussed in our June Legal Update.

The IFR takes effect on January 5, 2027. Comments are due the same day (Docket No. USCBP-2026-1387). Customs brokers may request delayed compliance with the new client-verification requirement, but all brokers are expected to be fully compliant by May 6, 2027.

A Narrow Definition of “US IOR”

CBP will now define a US importer of record (“IOR”) as a US citizen or lawful permanent resident, or an entity that is organized and located in the United States and, at all times, either (i) has at least 51% US-person “beneficial owner(s)” who control it, or (ii) directly owns a significant amount of unencumbered US real property by value. Of note, “beneficial owner” is defined in the regulation to prevent a shell company ownership loophole, and “significant amount” is not defined. Every other IOR is a “foreign IOR.”

However, if there is uncertainty about whether an entity qualifies as a US IOR, CBP may verify status based on other factors such as US principal place of business and physical presence, US physical assets (which exclude receivables), profitability, and capitalization. As a result, for example, a US-incorporated subsidiary of a foreign parent that has an extensive sales and marketing operation but only a limited US physical presence may be a foreign IOR.

New Entry Restrictions for Foreign IORs

A foreign IOR may enter goods for consumption only if it is Customs Trade Partnership Against Terrorism (“CTPAT”) validated or designates a CTPAT-validated licensed broker to file the entry or act as IOR. If the foreign principal is not the owner or purchaser of the goods, the broker must act as IOR, not merely make the entry. Currently, only Canadian IORs are eligible for CTPAT validation as foreign IORs, so most foreign importers will need a third-party CTPAT-validated broker to make entry or act as the IOR. A current list of validated brokers is published by CBP.

CTPAT is a voluntary CBP program that allows entities to certify the security of their supply chains to facilitate faster border crossings and reduced scrutiny.

A Status Declaration on Entries by Every IOR

All IORs must check a new box on CBP Forms 3461 and 7501 declaring their status as either a US or foreign IOR on every entry and entry summary filed on or after January 5, 2027. An inaccurate declaration allows CBP to require live entry and to suspend immediate delivery privileges.

Broker Liability Increased to Facilitate Compliance

Before declaring that a client is a US IOR, a broker must review records establishing that status and keep them for at least five years. A broker that is not CTPAT-validated must stop filing for a client that fails the test. CBP has also changed its penalty guidelines so that brokers may face penalties under 19 U.S.C. § 1592, which can reach the domestic value of the merchandise, rather than the $30,000 cap under 19 U.S.C. § 1641. While the risk of compliance will fall first on brokers, operational risk—higher bonding requirements, supply chain delays, etc.—ultimately falls on the importer if it fails to provide sufficient information to support a US IOR classification.

New Regulations Do Not Alter Existing Nonresident Importer Regulations

One reason behind these regulations is to mitigate the duty evasion risk caused by nonresident IORs, which are not normally subject to jurisdiction in the United States when they violate trade laws. These new foreign IOR regulations do not supercede existing “nonresident importer” regulations. That said, in practical terms, nonresident IORs will become a kind of foreign IOR under the new regulations.   

Key Takeaways

First, companies involved in the importation of goods should evaluate immediately whether they are currently using a US IOR or a foreign IOR.

• If a company is acting as its own IOR, it should scrutinize its standing and status under new regulations.

• If a company determines it is a US IOR, it should ensure its status can be sufficiently evidenced and documented with its broker.

• If a company determines it is a foreign IOR, it should confirm that its broker is CTPAT-validated and plan any switch well before January 5, 2027.

Second, brokers will need to build verification procedures, consider requesting delayed compliance by January 5, 2027, and reassess client portfolios given their expanded penalty exposure under § 1592.

Finally, interested parties should consider submitting comments by January 5, 2027. This is an interim final rule and is subject to change.

 

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¹ See Heightened Requirements for Foreign Importers of Record, 91 Fed. Reg. 69,977 (Nov. 6, 2026)