CBP Issues Heightened Requirements for Foreign Importers of Record and Customs Brokers
Summary
U.S. Customs and Border Protection (“CBP”) has issued an interim final rule establishing new entry requirements for foreign importers of record (“IORs”) and responsibilities for licensed custom brokers.
The rule is scheduled for publication in the Federal Register on November 6, 2026, and will become effective 60 days after publication. Comments will be due 60 days after publication, and licensed customs brokers may request delayed compliance with specified verification requirements, although all brokers must comply fully no later than May 6, 2027.
Overview
The interim final rule implements Executive Order 14411, “Strengthening Customs Enforcement,” by requiring a foreign IOR entering merchandise for consumption either to be validated through the Customs Trade Partnership Against Terrorism (“CTPAT”) program or to use a CTPAT-validated licensed customs broker.
CBP is also creating a new regulatory framework distinguishing U.S. IORs from foreign IORs based on citizenship, lawful permanent residence, organization under U.S. law, location, beneficial ownership, and ownership of qualifying U.S. real property. An IOR that does not satisfy the new criteria for a U.S. IOR will be treated as a foreign IOR.
New Requirements for Foreign Importers of Record
A CTPAT-validated foreign IOR with the right to make entry may enter merchandise for consumption itself or retain a licensed customs broker, regardless of whether that broker is CTPAT validated. Validation is the second tier of CTPAT membership. A CTPAT member achieves validation after CBP conducts an on-site review of the member’s CTPAT security procedures. The initial validation typically occurs within 3 years after CBP certifies the company’s membership in the program.
A foreign IOR that is not CTPAT validated must designate a licensed CTPAT-validated customs broker to make entry or act as the IOR for the entry. If the foreign principal is not the owner or purchaser of the merchandise, the CTPAT-validated broker must act as the IOR.
The restrictions apply to formal entries for consumption and to informal entries requiring CBP Form 3461 or CBP Form 7501, or their electronic equivalents. CBP has not categorically prohibited foreign IORs from using informal entry, but it will monitor those entries and may adopt a broader prohibition if it determines that the rule does not sufficiently protect revenue, national security, or public health and safety.
Qualification as a U.S. Importer of Record
Under new 19 CFR 110.2, an individual qualifies as a U.S. IOR if the individual is a U.S. citizen or lawful permanent resident.
An entity qualifies as a U.S. IOR only if it is located in the United States, organized under U.S. law, and either maintains at all times at least 51 percent beneficial ownership by U.S. citizens or lawful permanent residents who control the entity, or directly owns a significant amount of unencumbered real property in the United States.
For purposes of the rule, a beneficial owner generally is a natural person who exercises substantial control over an entity or owns or controls at least 25 percent of its ownership interests, including through multiple layers of entity ownership.
CBP may verify U.S. IOR status by considering an entity’s principal place of business, physical presence and business activities in the United States, physical domestic assets, ownership of unencumbered U.S. real property, profitability, and capitalization. CBP may request supporting records such as proof of citizenship or lawful permanent residence, corporate charters, financial records, purchase receipts, and documents of title.
New Declarations on Entry Documents
At the time of filing an entry and entry summary, an IOR claiming U.S. status must declare that it meets the new U.S. IOR criteria. CBP Forms 3461 and 7501, and their electronic equivalents, will include a new field through which the filer declares whether the IOR qualifies as a U.S. IOR.
When a non-CTPAT-validated broker acts as the IOR on behalf of a principal, the broker must identify the principal and declare that the principal qualifies as a U.S. IOR. The principal must have a CBP Form 5106 on file.
Expanded Broker Obligations
Before declaring that a client qualifies as a U.S. IOR, a customs broker must request and review records establishing that the client satisfies the regulatory criteria. If a non-CTPAT-validated broker determines that its client does not qualify as a U.S. IOR, the broker must cease filing entries for that client.
Brokers must retain records supporting a U.S. IOR verification for five years from the date of verification. The rule also clarifies that a broker must obtain a valid power of attorney whenever it transacts customs business for a client, including when the broker acts as the IOR.
Enforcement Consequences
If an IOR inaccurately declares that it—or a principal represented by a broker—qualifies as a U.S. IOR, CBP may require live entry and discontinue immediate-delivery privileges for formal and informal entries.
The rule also revises CBP’s penalty guidelines so that, at CBP’s discretion, a customs broker that violates 19 U.S.C. 1592 may face penalties under that provision or other available enforcement action, including remedies under 19 U.S.C. 1641.
Compliance Timing and Comments
The interim final rule provides a 60-day delayed effective date. Eligible brokers may request delayed compliance with the new client-verification requirement by the effective date and must explain why additional time is necessary.
Brokers subject to specified enforcement actions—including removal from CTPAT, revocation of Form 5106 filing privileges, entry-filer-code suspension, or broker-license revocation proceedings—are ineligible for delayed compliance. Even when CBP approves delayed compliance, the broker must demonstrate good-faith progress, and all brokers must comply fully no later than May 6, 2027.
Comments may be submitted through Regulations.gov under docket number USCBP-2026-1387 and must be received within 60 days after publication.
Recommended Actions
Importers and customs brokers may begin preparing for the rule by taking the following steps.
- Determine whether each IOR satisfies the new U.S. IOR criteria or will be treated as a foreign IOR.
- Identify foreign IORs that are not CTPAT validated and confirm that they have retained a licensed, CTPAT-validated customs broker.
- Review beneficial-ownership, corporate-organization, physical-presence, capitalization, and U.S.-asset records supporting any claim of U.S. IOR status.
- Update entry procedures and systems to accommodate the revised CBP Forms 3461 and 7501 and their electronic equivalents.
- Establish broker procedures for verifying U.S. IOR status and retaining supporting records for five years.
- Review powers of attorney to confirm that brokers possess valid authorization whenever they transact customs business for a principal.
- Assess whether a delayed-compliance request is necessary and prepare the request before the applicable deadline.
- Consider submitting comments regarding the rule’s operational effects, verification standards, compliance timetable, or CBP’s potential prohibition on informal entries by foreign IORs.
Bottom Line
The interim final rule substantially changes the eligibility and documentation framework governing U.S. and foreign IORs and places significant new verification responsibilities on customs brokers. Importers and brokers should evaluate their classifications, relationships, records, and entry procedures before the rule becomes effective.
Contact Clark Hill
For questions regarding this alert, please contact Mark Ludwikowski at mludwikowski@clarkhill.com or 202.640.6680, Kevin Williams at kwilliams@clarkhill.com or 312.985.5907, or Kelsey Christensen at kchristensen@clarkhill.com or 202.230.9889.
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