The White House Rewrites the Rulebook for Importers of Record With the Most Consequential EO on Customs Enforcement to Date

Rather than adjusting duty rates, the EO overhauls who is permitted to import goods into the United States and on what terms, directing US Customs and Border Protection (CBP) and the US Department of Homeland Security (DHS) to rebuild the importer of record (IOR) framework, sharply restrict foreign IORs, raise penalty floors, and impose heightened disclosure and certification requirements. 

The EO arrives against a backdrop of intensifying trade enforcement activity. In recent days, the US Trade Representative (USTR) has proposed Section 301 tariffs on approximately 60 economies for failing to prohibit forced-labor imports, a separate Section 301 investigation into global excess capacity remains pending, and a Section 301 investigation into Brazil’s trading practices has been announced, all while numerous Section 232 actions remain active or in the pipeline. Read in that context, this EO supplies the enforcement architecture meant to ensure those duties are actually collected. While none of its requirements take effect immediately, expect action soon — the EO sets forth a series of implementation deadlines, the most significant of which fall at 90 and 180 days. This alert summarizes the key changes and their practical implications for importers.

The Bottom Line

The EO’s center of gravity is the importer of record. For years, foreign entities with little or no meaningful US presence have been permitted to serve as IORs, with a few additional requirements compared to domestic IORs. This structure made it difficult for CBP to reach overseas parties that undervalued goods, misclassified merchandise, or otherwise evaded duties and then disappeared. This EO is best understood as a direct response to that enforcement gap: it tightens IOR eligibility across the board and effectively pushes foreign IORs out of the low-oversight lanes they have historically used. Both domestic and foreign importers should expect higher bonding costs, far more extensive disclosure obligations, and materially greater penalty exposure once these measures are implemented.

Restrictions on Foreign IORs

The EO directs the most significant changes at foreign IORs. CBP and DHS are instructed to prohibit a foreign IOR from filing informal entries altogether. For formal entries, a foreign IOR may no longer rely on a continuous bond to satisfy bonding requirements unless CBP specifically permits it after the foreign IOR demonstrates that the revenue would be fully protected and compliance assured, and must either be validated under CBP’s Customs Trade Partnership Against Terrorism (CTPAT) program or use a CTPAT-validated and licensed customs broker to file entries. The EO does not eliminate the ability of foreign IORs to file formal entries, but it makes doing so considerably more expensive and operationally burdensome. 

Importantly, the order defines who counts as a “foreign IOR” in the first place, and the distinction is not strictly about the location. The definition is not fully fleshed out, but the order provides the following initial parameters. A “U.S. IOR” includes an individual who is a US citizen or lawful permanent resident, and an entity that is organized under US law, is located in the United States, and at all times has controlling beneficial owner(s) who are US citizens or lawful permanent residents — or, alternatively, an entity that owns a significant amount of US real property, as determined by the secretary. A “foreign IOR” is any IOR that does not meet that definition. The order further directs the secretary to issue guidance on what it means to be “located in the United States,” with the express goal of preventing entities from using shell companies, sham transactions, or artificial corporate structuring to qualify as a US IOR. At a minimum, to be “located in the United States,” an entity must have its principal place of business in the United States, a physical presence where significant business activity is conducted in the United States, and sufficient tangible US assets, taking into account the scale of the company’s overall operations and whether the entity is an instrumentality of a foreign manufacturer without a substantial US presence.

These definitions carry real consequences: an importer that considers itself “foreign” could qualify as a US IOR — and thereby avoid the most onerous restrictions — based on its US presence, ownership, and assets, while a nominally US entity that is in substance an instrumentality of a foreign manufacturer may not.

Notably, the EO contains no country-specific carveouts from these foreign-IOR restrictions. There is no exemption for IORs based in Canada or Mexico, nor any accommodation tied to the United States-Mexico-Canada Agreement or other trusted-trading-partner status. That is a significant contrast with the pending Securing Accountability in Foreign Entries (SAFE) Act, the bicameral bill introduced in March of this year by Senator Bill Cassidy and Representative Jodey Arrington, which would amend the Tariff Act of 1930 to require IORs to maintain a meaningful US nexus but expressly exempts Canadian and Australian companies (with a mechanism to add other reciprocating jurisdictions). The SAFE Act remains in committee and has not been enacted. By proceeding through executive action rather than waiting on legislation, the Administration is positioned to accomplish much of the same objective — reining in non-resident importers as a tariff-evasion vector — without the country exemptions and statutory guardrails the bill would have built in. 

Tightening of IOR Requirements Generally

Beyond foreign IORs, the EO rebuilds the eligibility framework for all importers of record. Within 180 days, DHS must revise importer eligibility regulations to require that every IOR maintain a minimum level of tangible domestic assets, bonding, or both, and to increase minimum required bond coverage. IORs will also have to provide substantially more information to CBP including anticipated import volumes, year organized, ownership and beneficial-ownership disclosures, business-affiliation disclosures, and domestic-asset disclosures. 

The increased bonding requirements, in particular, raise the cost and bar for importing goods. Many importers have already been receiving bond insufficiency notices from CBP as a result of the increased tariffs, and this new requirement raises the financial stakes even further for IORs. 

The EO further requires that all IORs maintain “good standing” with CBP — a status CBP will define based on the IOR’s and its affiliates’ history of compliance and payment of customs liabilities. An IOR found to have illegally imported fentanyl, nitazenes, or other illicit substances or precursor chemicals will not be in good standing, and IORs that lose good standing will be barred from importing entirely, including from designating a customs broker to act as an IOR on their behalf. CBP must also update the IOR registry to remove inactive IORs and create risk-based tiers keyed to compliance history, enforcement actions, and audit results, and must establish enhanced, recurrent vetting of IORs, their affiliates, customs brokers, bonded-merchandise custodians, and freight forwarders, all within 180 days of the date of the EO. 

Heightened Import Disclosure and Certification Requirements

The EO directs CBP to establish heightened disclosure and certification requirements that go well beyond current practice. Importers will be required to certify compliance with critical supply-chain requirements, including the Countering America’s Adversaries Through Sanctions Act and 18 U.S.C. § 545, to disclose certain foreign tax and global business identifiers, and to provide detailed information about an imported good’s supply chain and production methods, such as the manufacturer’s product identifier or key specifications like composition, grade, or size. The secretary is directed to enforce all applicable criminal fines and civil penalties for noncompliance with these requirements. 

Of particular note, within 90 days CBP must establish a requirement that importers submit any documentation or information that the foreign exporter was required to provide to its own foreign customs administration before exporting to the United States. This cross-border documentation mandate has significant implications for supply-chain transparency and for the evidentiary record available to CBP in any subsequent enforcement action.

A Significantly Higher Penalty Floor

Among the EO’s most consequential provisions for compliance professionals is its overhaul of CBP’s mitigation framework. Within 90 days, DHS must revise all mitigation standards to establish a minimum penalty floor of not less than 50% of the assessed penalty — absent exceptional circumstances that materially impact national security — to establish a minimum liquidated-damages floor, and to eliminate mitigation entirely for repeat offenders. The EO also 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. For example, liquidated damages are routine for certain common violations such as late filed reconciliations, which are frequently mitigated to a few hundred dollars, but now may come with a much higher cost. DHS and the attorney general are separately directed to prioritize enforcement against forced-labor imports, misclassification, undervaluation, and illegal transshipment, including through Enforce and Protect Act investigations. 

This change materially alters the risk calculus around voluntary disclosures. Under current practice, importers who self-report violations can often mitigate penalties down to a fraction of the assessed amount. If mitigation now begins at a 50% floor, the relative benefit of making a prior disclosure increases in light of the significantly higher financial exposure that would be expected from this change. Importers weighing on whether to come forward should factor this compressed mitigation landscape into their decision making once the revised standards take effect.

Implementation Timeline

Because none of these measures are self-executing, the implementation calendar is central to assessing exposure. The EO sets the following principal deadlines.

The heightened disclosure and certification requirements in Section 3(a) are directed without a specific deadline, but importers should anticipate movement on a similar near-term track given the 90-day clock on the related documentation mandate. 

What This Means for Importers

The practical message is that the cost and complexity of being an importer — not merely the cost of the goods — is about to rise. Foreign IORs should begin evaluating now whether to establish a qualifying US presence, secure CTPAT validation, or restructure entries through a CTPAT-validated broker, because the informal-entry lane will close and the formal-entry path will carry new bonding and validation hurdles. All importers should review their bonding arrangements, prepare for expanded beneficial-ownership and supply-chain disclosures, and assess whether their compliance history would satisfy a forthcoming “good standing” standard. Given the new 50% penalty floor and the elimination of mitigation for repeat offenders, companies should revisit their internal compliance programs and reassess their approach to prior disclosures before the revised mitigation standards take effect. Because the EO’s deadlines are staggered between 45 days and one year, there is a limited — but real — window to prepare. 

What This Means for Brokers 

Customs brokers are also expressly in the crosshairs. Section 4(a) directs CBP to impose maximum penalties on brokers who fail to conduct due diligence, repeatedly represent noncompliant clients, or fail to cooperate with CBP information requests — language that is unusually specific for an EO. 

The EO simultaneously creates commercial opportunity and heightened risk for CTPAT-validated brokers. Because foreign IORs without their own CTPAT validation must now use a CTPAT-validated broker to file formal entries, these brokers become essential gatekeepers. A broker, however, that facilitates entries for a foreign IOR that proves noncompliant faces maximum penalties under the very provisions the EO creates.

The practical upshot is that the new 50% penalty floor and elimination of mitigation for repeat offenders fundamentally recalibrates the cost of silence. Brokers who identify compliance issues among their clients now have a materially stronger incentive to disclose violations to CBP proactively rather than risk being characterized as having “repeatedly represent[ed] noncompliant clients.” And brokers cannot serve as a workaround for debarred importers: an IOR that loses “good standing” is barred from designating a broker to act as an IOR on its behalf.

Final Takeaways

The EO is the latest in a series of aggressive trade and customs enforcement actions taken by the Trump Administration since the start of the president’s second term. Beginning on Day One with the “America First Trade Policy – The White House” directive, the Administration has pursued a sustained campaign to tighten customs compliance and crack down on duty evasion. Key prior actions include suspending duty-free de minimis treatment for all countries (July 2025), which was subsequently continued in February; issuing an EO targeting transshipment schemes (July 2025); and the creation of the US Department of Justice’s Trade Fraud Task Force in August 2025 to coordinate criminal and civil enforcement of tariff evasion. US Congress also reinforced these efforts legislatively: the “One Big Beautiful Bill Act,” signed into law, permanently repealed the statutory basis for the de minimis exemption worldwide, effective July 1, 2027. 

Taken together, this latest EO, which focuses on importer accountability, disclosure requirements, heightened penalties, and streamlined disposal of non-compliant goods, represents a further escalation of the Administration’s systematic effort to close perceived gaps in US customs enforcement and ensure that importers, particularly foreign entities, comply fully with US trade laws. 

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