New Executive Order On Strengthening Customs Enforcement

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On June 3, 2026, President Trump signed the Executive Order “Strengthening Customs Enforcement,” directing the Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP) to overhaul the rules that govern importers of record (IORs). The accompanying White House Fact Sheet frames the Order as a truly significant tightening of importer responsibilities – higher bonds, mandatory domestic assets, a new “good standing” requirement on all importers, and sharp new limits on foreign IORs. As CBP put it in its announcement, importing into the United States “has for too long been treated as a right and not a privilege.” While the Order has set aggressive deadlines for Customs reforms, it leaves most of the operational details to future rulemaking, and several of those details could reshape day-to-day compliance.

Overview: What the Executive Order Directs

Within 180 days, the Order requires the Secretary of Homeland Security to revise importer eligibility rules under 19 U.S.C. § 1484, § 1498, and § 1623, among other authorities. The most notable changes for IORs will be:

A requirement that every IOR maintain, at all times, a minimum level of tangible domestic assets, bonding, or both — plus an increase in the minimum required bond coverage.

Expanded data and identification requirements, including anticipated import volumes, year organized, ownership and beneficial ownership disclosures, business affiliations, and domestic asset disclosures.

A “good standing” mandate for all IORs. CBP will define the term based on an IOR’s (and its affiliates’) compliance history and payment record. Notably, IORs found to have illegally imported fentanyl or other contraband will not be in good standing – and an IOR that is not in good standing may not import at all.

Enhanced and recurrent vetting of IORs, affiliates, customs brokers, custodians of bonded merchandise, and freight forwarders (frequency or process of this vetting is yet to be announced).

Additionally, the Secretary of DHS must, within 45 days, submit to the President recommendations for legislation to strengthen customs enforcement.

Foreign IORs face some of the steepest changes. The Order prohibits a foreign IOR from filing informal entry under 19 U.S.C. § 1498, and – for formal entry – bars reliance on a continuous bond (absent a CBP-approved showing that revenue is fully protected) and requires the foreign IOR to be validated in CTPAT or to file through a CTPAT-validated, licensed customs broker. However, it is unclear whether CBP will pose other CTPAT eligibilitychallenges for foreign IORs from countries historically considered “of concern” (i.e., China). The Fact Sheet characterizes these transformations as bringing U.S. practice in line with trading partners that already restrict foreign parties from serving as the IOR.

Tougher Disclosures, Penalties, and Disposal

Beyond eligibility, the Order layers on new disclosure and enforcement obligations. CBP must establish heightened import disclosure and certification requirements — including certifications of compliance with the Countering America’s Adversaries Through Sanctions Act and 18 U.S.C. § 545, disclosure of foreign tax and global business identifiers, and detailed supply chain and production information. Within 90 days, importers may also be requiredto submit any documentation the foreign exporter filed with its own customs administration before shipping to the United States.

On enforcement, the Order directs CBP to pursue liquidated damages claims against bonds, restrict in-bond utilization, increase audits, and impose maximum penalties on brokers who fail to conduct due diligence or repeatedly represent noncompliant clients. It also prioritizes Enforce and Protect Act (EAPA) investigations and cases involving forced labor, misclassification, undervaluation (long enforced under 19 U.S.C. § 1592), and illegal transshipment. Separately, the Order directs faster seizure and disposal of non-compliant imports, including expanded use of 19 U.S.C. § 1612 and third-party disposal.

The Mitigation Overhaul

Buried in Section 4 is a change with outsized consequences. Within 90 days, CBP 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), establish a minimum liquidated damages floor, and eliminate mitigation entirely for repeat offenders.

That matters because the petition process under 19 CFR Part 172 currently gives CBP broad discretion to cancel or sharply reduce claims for liquidated damages — discretion that, in practice, often produces mitigation well below 50% of the assessed amount. A hard floor would cabin that discretion and raise the stakes on every petition. Importers should expect that a timely, thoroughly documented petition for relief — filed within the deadlines and supported by evidence of reasonable care — will matter more than ever, because there will be less room for CBP to grant relief in the form of substantially lower penalty amounts.

Numerous Questions Remain Outstanding

The Order is a directive, not a finished rule. The Fact Sheet confirms the reforms will not take effect immediately, and that DHS and CBP will generally proceed through standard rulemaking, giving affected parties a meaningful opportunity to adjust and to comment. Notwithstanding the future rulemaking, the EO leaves several consequential questions unanswered, such as how CBP will define “risk-based tiers” and the potential consequences for importers who fall in the highest category of risk.

Other open questions DTL is tracking include:

The dollar level of “tangible domestic assets” CBP will require, and how it will be measured and verified.

Exactly how “good standing” will be defined — and how an IOR cures a lapse once it falls out of good standing.

How much bond coverage will increase, and how that interacts with the wave of bond insufficiency notices importers are already receiving amid elevated tariffs.

The mechanics and capacity of the CTPAT-validation pathway that foreign IORs will need for formal entry.

Effective dates, transition periods, and whether existing IORs will be grandfathered while rulemaking proceeds.

What Importers Should Do

Even before the rules are written, importers can get ahead of this. Now is the time to review whether your customs bond is sufficient for current and projected volumes, map your IOR structure and beneficial ownership, assess any foreign-IOR exposure and your CTPAT eligibility, tighten recordkeeping and reasonable-care documentation, and prepare to participate when CBP opens its rulemaking for comment. Diaz Trade Law regularly counselsimporters on bond and liquidated damages issues, compliance program design, and responses to CBP notices for additional information, investigation, or penalties.

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