Customs Reform Is Here. Importers Have Homework.

If you’ve spent any time navigating U.S. customs regulations, you’ve probably had the same thought as anyone who has assembled furniture without reading the instructions: “Surely there’s a better way.”

Well, Washington appears to agree.

A sweeping Executive Order on customs enforcement aims to modernize how imports enter the United States, tighten compliance, strengthen national security, and close loopholes that have frustrated regulators and compliant businesses for years. Whether you’re an importer, customs broker, freight forwarder, or supply chain executive, this isn’t just another regulatory update. It’s one of the most significant overhauls of customs enforcement in decades.

Grab your coffee (or your customs bond), because there’s a lot to unpack.

Why Now?

According to the order, current customs processes have become increasingly vulnerable to abuse. Common problems include:

• Undervaluing imported goods
• Misclassifying products
• Hiding the true Importer of Record (IOR)
• Avoiding duty payments
• Circumventing forced labor restrictions
• Exploiting informal entry procedures

In short, some companies have been treating customs regulations like a buffet, taking only the rules they like.

The Administration’s response? Raise accountability across the entire import process.

Importers of Record: Welcome to the Spotlight

One of the biggest changes centers around the Importer of Record (IOR).

Going forward, IORs will be expected to prove they are legitimate businesses with actual financial substance, not just a mailing address and optimistic intentions.

Proposed requirements include:

• Higher bond requirements
• Minimum domestic assets or financial backing
• Expanded ownership disclosures
• Beneficial ownership reporting
• Business affiliation reporting
• Anticipated import volume reporting

Think of it as Customs saying: “We’re going to need more than your business card.”

Foreign Importers Face a Higher Bar

Foreign Importers of Record receive particularly close attention.

The order proposes eliminating informal entry filing for foreign IORs and imposing stricter requirements for formal entries.

Foreign importers may also need to:

• Use single transaction bonds instead of relying on continuous bonds
• Participate in CTPAT when eligible
• Work through a validated customs broker

The reasoning is straightforward: collecting penalties from companies operating halfway around the world is not nearly as simple as sending a strongly worded invoice.

“Good Standing” Becomes More Than a Nice Phrase

One of the most interesting provisions introduces the concept of maintaining “good standing” with U.S. Customs and Border Protection.

Companies with histories of significant customs violations, or involvement with illegal substances or contraband, could lose the ability to import goods into the United States altogether.

Imagine customs compliance becoming a credit score.

Only instead of affecting your ability to finance a car, it determines whether your shipment gets through the port.

Supply Chain Transparency Gets Serious

The order dramatically expands disclosure requirements.

Importers may need to provide:

• Manufacturer identifiers
• Product specifications
• Supply chain documentation
• Foreign export records
• Foreign tax identifiers
• Certifications regarding sanctions compliance and other trade laws

Translation: “Tell us where it came from, who made it, how it was made, and please don’t leave out the interesting parts.”

Enforcement Gets Bigger Teeth

Compliance isn’t just becoming more detailed. It’s becoming more expensive to ignore.

The order calls for:

• Increased audits
• Higher penalties
• Reduced opportunities for penalty mitigation
• Aggressive enforcement against repeat offenders
• Greater enforcement against undervaluation and illegal transshipment
• Enhanced forced labor investigations

For customs brokers, due diligence expectations also increase significantly.

Representing risky clients may become much riskier.

Faster Seizures, Faster Disposal

Customs also wants to reduce warehouse gridlock.

The Executive Order directs agencies to streamline the seizure and disposal of non-compliant imports by:

• Increasing bond requirements for high-risk shipments
• Simplifying voluntary abandonment
• Allowing expanded third-party disposal
• Speeding up disposition of seized merchandise

Translation: If a shipment doesn’t belong in the country, it shouldn’t become a long-term warehouse tenant.

More Transparency from Government Too

Not all the changes apply to importers.

The government plans to publish annual enforcement transparency reports and periodically review confidentiality requests.

For companies trying to understand enforcement trends, additional public reporting could become a valuable compliance resource.

What Businesses Should Do Now

Although many provisions require rulemaking before taking effect, companies shouldn’t wait until the last minute.

Now is the time to:

• Review Importer of Record structures.
• Verify customs bond adequacy.
• Evaluate beneficial ownership documentation.
• Strengthen supplier due diligence.
• Audit product classifications and valuations.
• Review forced labor compliance programs.
• Confirm documentation retention procedures.
• Prepare for expanded disclosure requirements.

Because nobody wants their first introduction to a new regulation to be through an enforcement action.

The Bottom Line

This Executive Order represents a fundamental shift in how the United States intends to manage customs enforcement.

The emphasis is clear:

• More accountability.
• More transparency.
• More documentation.
• More enforcement.

For businesses with strong compliance programs, many of these changes simply formalize practices already in place.

For organizations relying on outdated processes, or hoping Customs wouldn’t notice, it’s probably time to update the playbook.

As the saying almost goes: The only thing moving faster than global supply chains may soon be Customs asking for your paperwork.

And this time, they might actually read every page.

If you need help in reviewing your HTS classifications, valuations, Country of Origin, or strengthening your compliance program, don’t wait any longer. Customs won’t be waiting to give you a penalty for any violation that they find. Schedule a no-charge consultation with one of our trade compliance professionals today.