Get Prepared… From Executive Order to Action: CBP Launches Sweeping IOR, Supply Chain Disclosure, and Enforcement Initiatives

The EO set a series of staggered implementation deadlines, the most significant at 90 and 180 days. Those deadlines are now arriving, and US Customs and Border Protection (CBP) is taking action.

In our June 4 alert, we analyzed these directives in detail. This alert provides a follow-up, summarizing three significant implementation actions CBP has taken in recent weeks. 

Those actions include: (1) publication of an Advance Notice of Proposed Rulemaking (ANPRM) seeking comment on sweeping new supply chain disclosure requirements; (2) guidance outlining expanded vetting responsibilities for CTPAT-validated customs brokers (CVCBs); and (3) enhanced enforcement of IOR data accuracy on CBP Form 5106. Together, these developments show that the enforcement architecture outlined in EO 14411 is taking concrete shape and that importers, brokers, and other supply chain participants should prepare now.

ANPRM: Heightened Import Disclosures for Supply Chain Visibility

On September 2, CBP published an ANPRM, Heightened Import Disclosures for Supply Chain Visibility. The ANPRM initiates the rulemaking process for significant portions of Section 3 of EO 14411 and proposes amendments to 19 CFR Parts 141, 142, 143, and 163. It is the most significant of the three developments in scope and potential impact on importers.

The ANPRM seeks comment across three broad areas that could reshape the information importers must collect, maintain, and submit to CBP. Comments are due by December 1. 

Foreign Export Documentation

CBP is considering requiring IORs to obtain and submit documentation that foreign exporters must file with their customs authorities before exporting goods to the United States, including export declarations, commercial invoices, packing lists, certificates of origin, export licenses or permits, and transport documents.

CBP is requesting comments about how such a requirement would work in practice, including:

• Whether CBP should require the importer of record to submit foreign export documentation for all goods imported into the United States. 

• Whether CBP should randomize the submission requirement to ensure compliance with any general records retention requirement and assess the extent of non-compliance with other US laws.

• Whether IORs should transmit foreign export documents to CBP at entry, maintain them for inspection, or both.

• How CBP should address discrepancies between foreign export documents and US entry data, and what internal controls and reconciliation processes should be implemented by importers to identify such discrepancies.

• Whether different requirements should apply to CTPAT-validated and non-CTPAT importers.

• Whether CBP should designate certain imports as high-risk, triggering mandatory submission on national security grounds.

The proposal responds to various CBP enforcement concerns, with a particular focus on dual invoicing. Dual invoicing has become a particularly heightened concern, forming the basis of recent False Claims Act (FCA) customs fraud claims typically involving undervaluation of goods. Requiring IORs to produce the exporter’s filings would give CBP a cross-referencing tool to detect undervaluation, misclassification, and illegal transshipment.

Reforming Manufacturer and Supply Chain Identification

The ANPRM addresses two initiatives to improve CBP’s identification of parties in the import supply chain.

Manufacturer Identification Code (MID) Reform: CBP acknowledges that the current abbreviated MID provides limited information and is not always consistent or unique across entries. The ANPRM asks whether to replace it with identifying data such as the manufacturer’s full company name, physical address, and other business identifiers, when the MID or replacement should be provided, and how inaccurate data should be addressed.

Global Business Identifiers (GBIs): Since 2022, CBP has conducted a voluntary National Customs Automation Program test allowing importers to submit GBIs, including D-U-N-S numbers, Global Location Numbers, Legal Entity Identifiers, and Altana IDs, with traditional entry data. The ANPRM asks whether GBIs should become mandatory, supplement or replace the MID, and how a transition could be implemented. It also asks whether to identify additional supply chain parties, such as online marketplaces, not currently tracked through entry data.

The Use of Technology in Supply Chain Tracing

The ANPRM seeks input on technologies that could give CBP greater visibility into import supply chains. Questions include:

• What technologies the private sector uses to identify transshipment risk, verify origin, and trace raw materials through multi-tier supply chains. 

• The role of artificial intelligence in driving these technologies.

• Whether the available technologies are scalable to suit both small and large businesses.

• How emerging technologies could be integrated with the Automated Commercial Environment.

• Whether technology could be used to certify required entry data elements.

This reflects CBP’s interest in moving from document-based enforcement toward data-driven, technology-enabled supply chain oversight, signaling a potential shift in enforcement approaches and techniques.

The ANPRM also addresses expanding CTPAT program requirements as part of its technology and supply chain tracing proposals, asking whether the CTPAT program should:

• Require all CTPAT partners to adopt enhanced supply chain tracing technologies as a condition of participation.

• Expand CTPAT minimum security criteria to include cybersecurity requirements.

• Prohibit CTPAT partners from using logistics platforms identified as national security risks (e.g., China’s LOGINK platform).

• Provide additional trade facilitation benefits to CTPAT members that proactively share supply chain visibility data with CBP.

Taken together, these questions suggest CBP envisions CTPAT not only as a trusted trader initiative but also as a central compliance mechanism under EO 14411’s enforcement framework. The importance of CTPAT participation was also emphasized during the CBP Trade and Cargo Security Summit (TCSS) in early September.

Key Takeaway: The proposed rules could significantly increase importer information and document collection, submission, and recordkeeping requirements. The ANPRM contains more than 60 questions across these areas. Importers, customs brokers, freight forwarders, technology providers, and trade associations should identify the questions most relevant to their operations and consider submitting substantive comments by December 1.

CTPAT Broker Vetting Requirements

In August, CBP published a CTPAT alert outlining expanded responsibilities for CTPAT-validated customs brokers under EO 14411. Section 2(c)(i) of the EO requires foreign IORs either to be CTPAT-validated or to use a CVCB to file entries using a continuous bond, and CBP’s alert provides initial guidance on that role. While the EO directive creates a business opportunity and competitive advantage for CVCBs, it also imposes significant foreign IOR due diligence obligations. 

Comprehensive Vetting Obligations: Before conducting customs business for a foreign IOR, CVCBs will need to vet the IOR’s legal identity, ownership, business affiliations, US assets, compliance and import history, ability to pay duties, taxes, and fees, and supply chain, product classification, valuation, and country-of-origin information. They must retain records of the vetting, POAs, and relevant communications to demonstrate due diligence. 

Penalties and Competitive Advantage: Brokers that fail to conduct due diligence, repeatedly represent non-compliant or unverifiable clients, or fail to cooperate with CBP may face financial penalties, increased audits, or suspension or removal from CTPAT; a 50% minimum penalty floor applies, with no mitigation for repeat offenders. 

Key Takeaway: For CVCBs, questions remain as to the extent and breadth of the vetting that must be performed to be compliant with these obligations. While CBP has not yet defined the criteria to be considered a foreign IOR, importers that do not have significant US presence or assets should be prepared to collect and provide significant corporate, financial, and import information to their CVCB soon.

Enhanced Enforcement of CBP Form 5106

On August 19, CBP published a Federal Register Notice announcing enhanced enforcement of IOR information on CBP Form 5106 pursuant to Section 2(e) of EO 14411.

Effective September 18, CBP will review Form 5106 data for all IORs. CBP Form 5106, also known as the Create/Update Importer Identity Form, is an official document required by CBP to collect and register identification information for individuals and businesses importing commercial goods into the United States. 

Physical addresses, email addresses, and phone numbers must be accurate and belong directly to the IOR, and brokers submitting the form must hold a valid POA executed directly with the IOR. Inaccurate or incomplete information will result in immediate voiding of the IOR number and may trigger other enforcement, including broker sanctions and potential liability under the FCA (31 U.S.C. § 3729). 

Key Takeaway: For many companies, the CBP Form 5106 was a form submitted once to CBP and rarely revisited, leading to outdated information when the company moved offices, changed corporate information, or key contacts left the company. Importers and brokers should review their CBP Form 5106 submissions and make any necessary corrections to avoid import delays or penalties. 

What This Means and Next Steps

These actions show that CBP is moving swiftly to operationalize EO 14411. Accordingly, CBPs recent TCSS emphasized enforcement, the importer of record program, C-TPAT, and supply chain visibility, including the prevention of transshipment. The 90-day implementation window flagged in our June alert is now here, and the first regulatory framework is taking shape. Companies across the import supply chain should consider:

• Evaluating the ANPRM and Consider Submitting Comments. Identify proposals most likely to affect your operations, particularly foreign export documentation, MID reform, and CTPAT requirements, and submit substantive comments by December 1.

• Auditing CBP Form 5106 Data. Verify that all Form 5106 information on file is accurate and belongs directly to the IOR and confirm that brokers hold valid POAs executed directly with each IOR.

• Assessing CTPAT Strategy. Importers and brokers should evaluate their CTPAT status; foreign IORs should obtain validation or use a CVCB, and brokers should assess whether validation is a business necessity.

• Reviewing Supply Chain Documentation. Evaluate access to the foreign export documents CBP may require and identify gaps before requirements are finalized. Ensure that you know your supply chain and have documentation to evidence origin. This will become even more critical given the White House and CBP’s focus on transshipment and forced labor.

• Strengthening Compliance Programs. Ensure compliance teams are prepared for the 50% penalty floor, enhanced IOR verification, and expanded broker due diligence obligations. We are assisting many importers with conducting internal audits to ensure compliance before Customs issues an inquiry or takes action.

• Preparing for Customs Inquiries and Enforcement. Our team is already seeing a significant uptick in CBP Requests for Information and Notices of Action. CBP is requesting far more information and documentation to validate import information than in the past. Ensure that documentation to support import declarations is readily available.

While the ANPRM begins implementing EO 14411’s supply-chain disclosure directives, many significant requirements remain outstanding. These include restrictions on foreign IORs, revised importer eligibility and bonding requirements, a new “good standing” framework, risk-based IOR tiering and enhanced vetting, revised penalty-mitigation standards, streamlined disposal procedures, and additional transparency measures.

CBP and the US Department of Homeland Security are expected to address these directives through additional rulemakings, guidance, and policy changes in the coming weeks and months. Importers and other supply-chain participants should continue preparing for significant changes to IOR eligibility, compliance obligations, and enforcement exposure.

The ArentFox Schiff Customs & Import Compliance team continues to monitor developments under EO 14411 and is well positioned to assist clients with ANPRM comment preparation, compliance audits, CTPAT strategy, and other trade enforcement matters. In this environment where the stakes continue to increase, importers must take a proactive role in import compliance.

For more information, please contact the authors of this article or your ArentFox Schiff relationship attorney.