A practitioner’s guide to the new importer-of-record rules, penalty floors, and disclosure obligations, and how to prepare before the rulemaking lands.

President Trump signed an executive order titled Strengthening Customs Enforcement, directing the Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP) to undertake what the administration describes as comprehensive customs reform. For importers, customs brokers, freight forwarders, and the trade-compliance professionals who advise them, this is one of the most consequential customs documents in years. It does not change a single duty rate. Instead, it reaches into the plumbing of the entry process: who is allowed to be an importer of record, what they must put on the line financially, what they must disclose, and what happens when they get it wrong.

The order arrives at a moment when the stakes of getting an entry right have rarely been higher. Tariff levels across most trading partners sit well above where they were two years ago, the duty-free de minimis channel has been closed, and CBP’s revenue exposure on each shipment has grown accordingly. The administration’s framing is straightforward: when duties are high and the incentive to evade them is correspondingly large, the enforcement architecture has to be strong enough to hold. This article walks through what the order actually requires, the mechanics that matter most for day-to-day operations, the timeline on which the changes will arrive, and the practical steps importers should be taking now.

The order at a glance

The executive order is structured as a series of directives to the Secretary of Homeland Security, most of them carrying deadlines of 45, 90, or 180 days, plus a one-year reporting requirement. None of the substantive changes take effect on signing. Almost everything must run through the standard notice-and-comment rulemaking process under the Administrative Procedure Act, which means affected parties will get a chance to weigh in and to adjust operations before the rules bite. With that caveat firmly in mind, the order directs DHS and CBP to do the following:

Overhaul importer-of-record (IOR) eligibility: imposing minimum domestic asset and bonding requirements, heightened conditions on foreign IORs, a “good standing” standard, a cleaned-up registry, and recurrent vetting.
Expand disclosure and certification: requiring importers to certify compliance with supply-chain statutes and to hand over far more detail about goods, supply chains, and the data already filed with foreign customs authorities.
Toughen penalties: establishing a minimum penalty floor of at least 50 percent of the assessed amount, a liquidated-damages floor, and an end to mitigation for repeat offenders.
Speed up disposal: making it easier to seize and dispose of non-compliant goods, including through third-party disposal and streamlined voluntary abandonment.
Increase transparency: publishing annual enforcement reports and putting expiration dates on confidentiality requests.
Recommend legislation: delivering proposals to Congress within 45 days to give these reforms a statutory backbone.

Why now: the enforcement gap behind the order

To understand the order, it helps to understand the problem it claims to solve. The administration’s stated rationale, echoed in the accompanying fact sheet, is that customs reform is “long overdue” and that “systemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes” have created openings for what the order calls “malign actors” to evade federal law. The specific behaviors it names are familiar to anyone who works in trade compliance: undervaluing imports, concealing who the real importer of record is, misclassifying merchandise, and routing goods through third countries to disguise their true origin, which is illegal transshipment.

These concerns did not appear out of nowhere. The order sits at the end of a line of policy moves the administration has made since January 2025. The de minimis exemption, the provision that historically let shipments valued under $800 enter duty-free with minimal data, was suspended for China-origin goods in early 2025 over its role in the synthetic opioid supply chain, then suspended globally for commercial shipments. The One Big Beautiful Bill Act went further, permanently repealing the statutory basis for de minimis worldwide effective July 1, 2027. As that low-friction, low-data channel closes, hundreds of millions of shipments that once flowed through it are being pushed into the formal and informal entry systems, which were built for a different era and a different volume. The new order is, in effect, an attempt to harden those systems before the wave fully arrives.

There is also a revenue logic. Every percentage point of tariff increase raises the financial reward for evasion. When a foreign seller can undervalue a shipment, misdeclare its contents, or simply never pay an assessed duty because its assets sit overseas and beyond practical reach of U.S. collection, the honest domestic importer competing against that seller is disadvantaged and the Treasury is shortchanged. Much of the order is animated by that asymmetry between domestic and foreign importers, and by the difficulty CBP faces enforcing U.S. law against parties whose people, money, and operations are all abroad.

The heart of the order: a new regime for importers of record

Section 2 is where the order will hit operations hardest. The importer of record is the party legally responsible for ensuring imported goods comply with U.S. law and that duties are paid. Today, becoming an IOR is comparatively easy, and the order treats that ease as a vulnerability. It directs the Secretary, within 180 days, to revise importer eligibility regulations, guidance, and policies across several dimensions.

Minimum assets, bigger bonds

The order requires that every IOR maintain, at all times, a minimum level of tangible domestic assets, bonding, or both, at a level CBP determines is necessary to ensure compliance. It also directs CBP to increase the minimum required bond coverage for IORs. The practical effect is to make the IOR a financially substantial, reachable party. Today a thinly capitalized entity can act as importer of record with a modest bond; under the new approach, CBP wants real assets on U.S. soil, or a meaningfully larger bond, standing behind every entry. Importers operating on thin bonds should expect bond sufficiency reviews and the prospect of materially higher surety costs.

A bright line between U.S. and foreign importers

The most structurally significant change is the formal distinction the order draws between a “U.S. IOR” and a “foreign IOR,” and the different rules that attach to each. The definitions matter enormously, so they are worth stating plainly. A U.S. IOR is, for an individual, a U.S. citizen or lawful permanent resident; for an entity, one organized under U.S. law, located in the United States, with controlling beneficial owners who are U.S. citizens or LPRs at all times, or, alternatively, an entity that owns a significant amount of U.S. real property. A foreign IOR is anyone who does not meet that definition.

Crucially, the order tells CBP to define “located in the United States” in a way that prevents gaming through shell companies, sham transactions, or artificial corporate structuring. At a minimum, an entity must have its principal place of business in the United States, a physical presence where significant business activity actually occurs, and sufficient tangible U.S. assets given the scale of its operations, with explicit attention to whether the entity is merely an instrumentality of a foreign manufacturer without a substantial U.S. presence. In other words, standing up a token U.S. LLC will not, by itself, confer U.S. IOR status.

Foreign importers lose informal entry

For foreign IORs, the order does two specific things. First, it directs CBP to prohibit foreign IORs from filing informal entry, the simplified, lower-cost process generally used for low-value shipments. The administration’s reasoning is that foreign importers ship low-value goods in vastly higher volumes, are less familiar with U.S. customs law, and face smaller penalties because penalties are often tied to value. Combined with the difficulty of enforcing against parties abroad, the administration concludes that foreign and domestic importers are not “similarly situated” in the informal-entry environment, and that only U.S. IORs should be permitted to use it.

Foreign importers face heightened formal-entry conditions

Second, where a foreign IOR uses formal entry, the order imposes two new conditions. The foreign IOR generally may not rely on a continuous bond to satisfy bonding requirements (unless CBP is satisfied that revenue is fully protected and compliance assured), and it must either be validated in CBP’s Customs Trade Partnership Against Terrorism (CTPAT) program, if eligible, or use a CTPAT-validated and licensed customs broker to file its entries. The order leans on the “revenue rule,” the long-standing principle that one country’s courts will not enforce another’s tax and customs debts, to justify treating foreign importers, who can more easily walk away from a customs debt, more stringently. The administration also notes that this brings U.S. practice closer to that of many trading partners, which commonly bar foreign entities from acting as importer of record or require them to partner with a verified domestic party.

The “good standing” requirement

Within 180 days, every IOR must maintain “good standing” with CBP, a status the agency will define based on the importer’s and its affiliates’ compliance history and payment of customs liabilities, among other factors. The order gives a pointed example: an importer found to have illegally imported fentanyl, nitazenes, other illicit substances, or precursor chemicals will not be in good standing. An IOR that loses good standing may not import at all, and, importantly, may not sidestep the bar by designating a customs broker to act as IOR on its behalf. This ties enforcement consequences directly to the privilege of importing and closes a common workaround.

A cleaned-up registry, risk tiers, and recurrent vetting

The order directs CBP to update the IOR registry within 180 days: removing inactive IORs, confirming that active ones are compliant with all applicable regulations and disclosures, and creating risk-based tiers keyed to compliance history, enforcement actions, and audit results. Separately, it requires enhanced vetting procedures, including recurrent vetting rather than just a one-time check, for everyone involved in importing: foreign IORs, IOR affiliates, customs brokers, custodians of bonded merchandise, and freight forwarders. The takeaway for the trade is that vetting becomes continuous, and that an importer’s risk tier, and therefore its scrutiny at the border, will be shaped by its track record.

More to disclose, and a certification you sign at your peril

Section 3 expands what importers must tell the government and what they must certify is true. The heightened disclosure and certification requirements include certifying compliance with critical supply-chain statutes. The order names the Countering America’s Adversaries Through Sanctions Act and 18 U.S.C. 545 (the criminal smuggling statute), with more to be specified by CBP. Importers will also have to disclose certain foreign tax and global business identifiers and provide detailed supply-chain and production information: the manufacturer’s product identifier such as a model or style number, and key specifications like composition, grade, or size.

One requirement deserves particular attention. Within 90 days, CBP is directed to require importers to submit any documentation or information that the foreign exporter was required to file with the foreign customs administration before exporting to the United States. This effectively imports a second country’s export paperwork into the U.S. entry record, giving CBP a cross-check against the values and descriptions declared on entry. For importers, it raises the bar on documentary consistency: the story told to the export country and the story told to CBP now need to match. And the order is explicit that criminal fines and civil penalties will be enforced for noncompliance with these heightened requirements.

Penalties with a floor, and the end of easy mitigation

Section 4 is the enforcement engine. It instructs the Secretary to take any action available under law to bolster enforcement, including enforcing liquidated-damages claims against bonds for noncompliance, restricting in-bond movements, increasing audits, and imposing maximum penalties on brokers who fail to exercise due diligence, repeatedly represent noncompliant clients, or drag their feet on CBP information requests.

It also directs the Secretary and the Attorney General to prioritize enforcement against imports made with forced labor and against misclassification, undervaluation, and illegal transshipment, including investigations under the Enforce and Protect Act (EAPA), the statute used to police antidumping and countervailing duty evasion.

The change that compliance teams will feel most directly is the mitigation overhaul. Within 90 days, CBP must revise its mitigation standards to establish a minimum penalty floor of not less than 50 percent of the assessed penalty (absent exceptional circumstances that materially affect national security), set a minimum liquidated-damages floor, and eliminate mitigation entirely for repeat offenders. In practice, CBP’s penalty mitigation guidelines have given importers substantial room to negotiate assessed penalties down, often well below half. A 50 percent floor sharply narrows that discretion. The cost of a violation goes up, the predictability of a steep penalty goes up, and the value of being a clean, first-time, cooperative party, rather than a repeat offender, goes up with it.

Faster seizure and disposal of non-compliant goods

Section 5 targets the back end of the process. Within 90 days, CBP is directed to expedite and enhance the seizure and disposal of non-compliant imports by reducing or eliminating the regulatory burdens around voluntary abandonment, increasing bond requirements for high-risk shipments, authorizing third-party disposal, and using its forfeiture-and-sale authority under 19 U.S.C. 1612. For importers, the practical risk is that goods flagged as non-compliant can be removed from commerce and destroyed more quickly and with fewer procedural off-ramps than before. Getting the entry right the first time, rather than counting on a slow remediation process, becomes more important.

Transparency: annual reports and sunset on secrecy

Section 6 directs CBP, within 90 days, to enhance transparency, including by requiring periodic review and expiration of confidentiality requests and by publishing annual enforcement transparency reports, all consistent with national security and other legal limits on disclosing sensitive information. For the trade community, the annual reports promise a clearer public picture of where and how CBP is enforcing, which over time should help importers benchmark their own risk. The sunset on confidentiality requests is a smaller but real change for parties that have relied on indefinite confidential treatment of certain filings.

Legislation and the one-year report

Two provisions look beyond the regulatory toolkit. Section 8 requires the Secretary, within 45 days and in consultation with the Office of Management and Budget, to send the President recommendations for legislation to strengthen customs enforcement. This signals that the administration sees parts of its agenda, likely the most aggressive elements such as hard statutory limits on who can serve as IOR, as needing congressional backing to be durable and litigation-proof. Section 9 requires a report within one year, routed through the U.S. Trade Representative and senior economic advisors, on how effective the order’s measures have been. Together they frame this order as the opening move in a longer reform effort, not the final word.

The timeline that matters

Because the order works through deadlines rather than immediate effect, the calendar is the most useful planning tool. Counting from the June 3, 2026 signing date:

Within ~45 days (mid-July 2026): legislative recommendations go to the President.
Within ~90 days (early September 2026): the disclosure mandate on foreign export documentation (Sec. 3(b)), the revised mitigation standards and 50 percent penalty floor (Sec. 4(c)), streamlined disposal (Sec. 5), and the transparency measures (Sec. 6).
Within ~180 days (late November / early December 2026): the core IOR eligibility revisions, the good-standing requirement, the registry overhaul and risk tiers, and enhanced recurrent vetting (Sec. 2).
Within one year (June 2027): the effectiveness report.
July 1, 2027: the statutory repeal of de minimis takes effect worldwide under the One Big Beautiful Bill Act, a separate measure, but one that compounds the volume pressure these reforms are designed to handle.

These are deadlines for the agency to propose or take steps, not dates on which finished rules bind importers. Notice-and-comment rulemaking typically takes many months, and the order expressly commits DHS and CBP to engage stakeholders so that affected parties “will have a meaningful opportunity to adjust operations.” Expect proposed rules to surface across late 2026 and into 2027, with comment windows that the trade should use.

What importers and brokers should do now

None of this is binding yet, but the direction of travel is unmistakable, and several preparatory steps carry no downside even if the final rules shift at the margins.

Confirm your IOR status. Determine whether your importing entity qualifies as a U.S. IOR under the order’s definition, meaning U.S. organization, real U.S. presence, and U.S. beneficial ownership or significant U.S. real property. Foreign-owned importers, and U.S. shells fronting for foreign manufacturers, should assess their exposure to the foreign-IOR restrictions now.
Review bond adequacy and capitalization. With minimum-asset and higher-bond requirements coming, talk to your surety about likely increases and confirm your bond will be deemed sufficient under a tighter standard.
Audit your compliance record. Good standing and risk tiers will be built on history. Resolve open penalty cases, clean up classification and valuation practices, and document corrective actions before scrutiny intensifies.
Tighten documentary consistency. Begin reconciling the data you declare to CBP with what your suppliers file with foreign customs authorities, since CBP will soon want both and will compare them.
Pressure-test your supply chain. Forced-labor and transshipment enforcement is being prioritized. Map origins, retain production records, and be ready to certify and substantiate supply-chain compliance.
Re-price the cost of a mistake. With a 50 percent penalty floor and no mitigation for repeat offenders, the expected cost of a violation rises. Compliance investment that looked marginal under the old mitigation regime may now pay for itself.
Engage in the rulemaking. These rules are not yet written. Comment periods are the trade community’s chance to shape definitions, thresholds, and timelines. Track the proposed rules and participate, individually or through trade associations.

The Conclusion

Strengthening Customs Enforcement does not raise a single tariff, but it may reshape the mechanics of importing more than any rate change. It treats the identity, financial substance, and track record of the importer of record as the front line of enforcement; it draws a hard line between domestic and foreign importers; it raises the floor on penalties; and it speeds the removal of non-compliant goods. For well-capitalized, well-documented, compliance-minded importers, much of this formalizes practices they already follow and may even level the playing field against less scrupulous competitors. For thinly capitalized importers, foreign-controlled entities, and anyone who has relied on the soft edges of the old system, it signals a markedly harder environment ahead. The smartest response is neither to panic nor to wait. The rules will take months to finalize and will move through a process built for input. But the policy direction is clear, the deadlines are short by regulatory standards, and the importers who treat the next year as preparation time, rather than as a reprieve, will be the ones who adapt smoothly when the rules arrive.

Strengthening Customs Enforcement: What the June 2026 Executive Order Means for Importers