On June 3, 2026, President Trump signed an executive order titled “Strengthening Customs Enforcement” — one of the most significant expansions of CBP’s import enforcement authority in years. The order directs the Department of Homeland Security and CBP to implement sweeping changes to importer eligibility, bonding requirements, disclosure obligations, and — most consequentially for importers currently facing enforcement — the penalty and liquidated damages mitigation framework.
The order sets 90-day and 180-day implementation deadlines for most of its provisions, meaning the regulatory changes it directs are coming quickly. Some provisions — particularly those targeting foreign importers of record — take effect through agency action rather than notice-and-comment rulemaking, which means the timeline for compliance is compressed. Others require formal rulemaking under the Administrative Procedure Act and will take longer to implement, but the direction is clear and the pressure on CBP to move is explicit.
This post walks through the order’s major provisions section by section and explains what each one means for importers, customs brokers, freight forwarders, and anyone currently navigating a CBP penalty or seizure matter. You can read the full text of the executive order on the White House website.
Section 1 — Purpose: Customs Reform Is “Long Overdue”
The order’s purpose section frames the entire enforcement push in terms of national security and revenue protection. It identifies three specific types of noncompliance driving the reform: undervaluing imports, withholding critical information about importers of record and the goods being imported, and avoiding payment of duties through various arrangements and schemes.
CBP Commissioner Rodney Scott’s statement accompanying the order captured the administration’s posture directly: “Importing into the U.S. has for too long been treated as a right and not a privilege.” That framing — importing as a privilege subject to revocation rather than a right subject to process — signals a significant shift in CBP’s institutional tone and previews the more aggressive enforcement posture the order’s later sections implement.
Section 2 — Importers of Record: Sweeping Changes With a 180-Day Clock
Section 2 is the longest and most operationally significant section of the order. It directs DHS to overhaul the importer of record framework within 180 days — by early December 2026. The changes affect both domestic and foreign IORs, but the most consequential provisions are aimed squarely at foreign entities that have been importing into the United States while shielding themselves from CBP’s enforcement reach.
Higher bonding requirements for all IORs. The order directs CBP to increase minimum required bond coverage for importers of record and to require that IORs maintain a minimum level of tangible domestic assets, bonding, or both. The specific amounts are left to CBP to determine, but the direction is unambiguous: current bond levels — many of which have not kept pace with import volumes — are inadequate and will be raised. For importers who currently carry minimal bonds relative to their duty liability, this change will increase the financial commitment required to maintain import privileges.
Bonding required for informal entries. Under current practice, low-value informal entries — shipments below the $2,500 formal entry threshold — have generally not required a customs bond. The order directs CBP to require that an IOR be designated and reported for all entries, formal and informal, and that a bond or sufficient tangible domestic assets be required for all of them. This closes a gap that has allowed large volumes of low-value shipments to move through the system without the financial accountability that formal entries carry.
Beneficial ownership and affiliate disclosure requirements. IORs will be required to provide CBP with significantly more identifying information, including anticipated import volumes, year organized, ownership and beneficial ownership disclosures, business affiliation disclosures, and domestic asset disclosures. This is a direct response to the shell company and nominee IOR problem — foreign entities that import through U.S.-registered entities with no real domestic presence — and mirrors the beneficial ownership disclosure requirements that FinCEN has implemented in the financial sector.
Foreign IORs banned from informal entry filings. This is one of the order’s most immediately impactful provisions for e-commerce and direct-to-consumer import models. The order directs CBP to prohibit foreign importers of record from filing informal entries — the low-value entry category that has been widely used by foreign sellers, particularly Chinese e-commerce platforms, to import directly to U.S. consumers while facing minimal CBP scrutiny and reduced penalty exposure. The order’s reasoning is explicit: foreign IORs face lower effective penalties for noncompliance because penalties correlate to value, and CBP faces substantial barriers enforcing against foreign actors whose assets and personnel are overseas.
Foreign IORs: no continuous bonds and CTPAT requirements. For formal entries, foreign IORs will no longer be able to rely on a continuous bond unless CBP specifically permits it based on a determination that revenue would be fully protected. They must also either be CTPAT-validated or use a CTPAT-validated licensed customs broker to file entries. This requirement effectively forces foreign importers into either the CTPAT compliance program — with its supply chain security and transparency requirements — or into a relationship with a vetted U.S. broker who assumes accountability for the entries.
“Good standing” requirement — enforcement blacklist for drug importers. The order creates a formal “good standing” concept for IORs, requiring DHS to define and implement it within 180 days. IORs not in good standing cannot import or designate a customs broker to act as IOR on their behalf. The order specifically calls out IORs found to have illegally imported fentanyl, nitazene, or other illicit substances or precursor chemicals as examples of entities that shall not be in good standing. This creates a formal debarment mechanism for the most serious customs violators — one that extends to affiliates and prevents circumvention through broker relationships.
IOR registry overhaul and risk-based tiering. CBP is directed to clean up the IOR registry — removing inactive IORs, confirming active ones are compliant, and creating risk-based tiers based on compliance history, enforcement actions, and audit results. This tiered system will likely produce differentiated levels of scrutiny and requirements for importers at different risk levels, similar to the trusted trader programs that already exist for compliant importers.
Enhanced vetting for brokers, freight forwarders, and custodians. The order extends recurrent vetting requirements to all individuals and entities conducting activities related to importation — not just IORs themselves. This means customs brokers, freight forwarders, and custodians of bonded merchandise will face their own enhanced screening requirements. For the customs brokerage industry, this is a significant expansion of compliance obligations.
Section 3 — Import Disclosure and Certification: Supply Chain Transparency Within 90 Days
Section 3 directs DHS to establish heightened import disclosure and certification requirements within 90 days — by early September 2026. These requirements go beyond the current entry documentation framework and move toward a supply chain transparency model that requires importers to affirmatively certify compliance with specific legal regimes at the time of entry.
The specific certifications required will include compliance with the Countering America’s Adversaries through Sanctions Act (CAATSA), 18 USC § 545 (the smuggling statute), and other statutes to be identified by CBP in consultation with other agencies. Importers will also be required to disclose foreign tax identifiers and global business identifiers — information that will help CBP verify the actual identity and structure of foreign suppliers and manufacturers.
Perhaps most significantly for supply chain transparency, importers will be required to provide detailed information about the imported good’s production methods — including manufacturer product identifiers such as model or style numbers, and key specifications such as composition, grade, or size. This requirement is designed to address the transshipment and origin-laundering problem: goods manufactured in one country, shipped through a second country with only minor processing, and declared as originating in the transit country. Detailed product specifications make it harder to present the same physical product under different origin stories at different ports.
The order explicitly directs enforcement of all applicable criminal fines and civil penalties for noncompliance with these disclosure requirements. A false certification of CAATSA compliance, for example, would not just generate a civil penalty — it would create criminal exposure under the sanctions statutes themselves.
Section 4 — Enforcement: The 50% Penalty Floor and the End of Mitigation for Repeat Offenders
Section 4 is the provision with the most direct and immediate impact on importers currently facing or anticipating CBP penalty or liquidated damages matters. It directs DHS to revise CBP’s mitigation standards within 90 days — by early September 2026 — in ways that will fundamentally change the penalty landscape for the worse.
Forced labor and transshipment enforcement prioritization. The order directs the Secretary of Homeland Security and the Attorney General to prioritize enforcement of federal law relating to importations involving products produced by forced labor and importations involving misclassification, undervaluation, and illegal transshipment. This is a direction to dedicate resources — investigations, audits, referrals — to these specific violation categories. For importers in industries with known forced labor supply chain risks (solar, textiles, electronics) or known transshipment patterns (aluminum, steel, finished goods from China), the enforcement risk is elevated.
A 50% minimum penalty floor. The most consequential provision in Section 4 for existing penalty matters is the directive to establish a minimum penalty floor of not less than 50 percent of the assessed penalty — absent exceptional circumstances that materially impact national security. Under current mitigation guidelines, well-prepared petitions in first-offense negligence cases can achieve mitigation well below 50 percent — outcomes in the 10 to 25 percent range are regularly achievable for importers with strong compliance histories, documented corrective action, and no aggravating factors. The 50% floor, once implemented, would eliminate those outcomes.
Read literally, the order directs that no petition — regardless of how strong the mitigating facts are, regardless of the importer’s compliance history, regardless of how minor the violation — can produce a penalty below 50% of the assessed amount. The only exception is “exceptional circumstances that materially impact national security” — an exception so narrow that it will not be available to the ordinary importer with a misclassification or undervaluation penalty.
A minimum liquidated damages floor. The same 90-day revision directive applies to liquidated damages claims — CBP must establish a minimum floor for liquidated damages mitigation as well. The specific floor is not stated in the order (unlike the 50% floor for penalties), leaving CBP to define it through the revision process. But the direction is clear: the era of 80 to 90 percent mitigation of ISF liquidated damages for first-offense importers with strong compliance records is ending.
No mitigation for repeat offenders. The order directs CBP to eliminate mitigation entirely for repeat offenders. An importer with a prior penalty or liquidated damages claim — even one that was successfully mitigated in the past — will not be eligible for any mitigation on a subsequent enforcement action. This is a categorical rule with no stated exceptions. For importers who have been through the penalty process before and assumed that a second offense would still be mitigable to some reduced amount, this provision eliminates that assumption.
Section 5 — Streamlined Disposal: Faster Forfeiture of Seized Merchandise
Section 5 directs DHS to take actions within 90 days to expedite and enhance the disposal of seized and abandoned merchandise. This provision is less dramatic than Sections 2 and 4 but has practical significance for importers in seizure cases. An accelerated disposal timeline reduces the window available to importers to resolve a seizure administratively before the merchandise is sold, destroyed, or otherwise disposed of — particularly in cases where the petition process or judicial claim may extend beyond the current disposal timeline.
What This Means If You Are Currently Facing a CBP Penalty or Liquidated Damages Claim
The 90-day deadline for revising mitigation standards is the most time-sensitive issue for importers currently in the penalty or liquidated damages process. If CBP implements the 50% penalty floor and the elimination of repeat-offender mitigation through revised guidelines within that window — and the order’s language suggests that is the intent — then petitions decided after those guidelines take effect will be evaluated under the new, less favorable standards.
This creates a significant incentive to resolve pending penalty matters before the new mitigation guidelines are in place. A petition currently in process at a CBP FP&F office that is decided under the existing guidelines — where first-offense negligence cases can achieve outcomes in the 10 to 25 percent range — produces a substantially better outcome than the same petition decided under a 50% floor. The timing of a petition submission and the timeline for a decision matter in a way they did not before this order was signed.
Importers who have not yet filed a petition but are within the response window should consult with customs counsel immediately about whether accelerating the petition filing and seeking an expedited decision makes strategic sense in light of the pending guideline revisions. Importers who have filed a petition and are waiting for a decision should consider whether to contact the FP&F office to understand the current timeline and whether any action can accelerate it.
For repeat offenders — importers who have a prior penalty or liquidated damages history — the calculus is more urgent. If the order is implemented as written, the window in which any mitigation is available may be measured in weeks rather than months. An importer with a prior enforcement history who receives a new penalty notice today is facing a dramatically different legal landscape than they would have faced yesterday.
What This Means for Importers’ Compliance Programs Going Forward
For importers who are not currently in enforcement but are evaluating their compliance exposure in light of this order, the key takeaways are:
Bond coverage needs review now. If your current continuous bond is sized to a minimum or based on historical duty payments, it will likely need to be increased under the new requirements. Underestimating the bond revision timeline is a compliance risk — the 180-day clock means CBP could be requiring higher bonds by early December 2026.
Prior disclosure is more valuable than ever. The prior disclosure mechanism — voluntarily disclosing a compliance error to CBP before a formal investigation begins — caps penalty exposure at interest on the unpaid duties rather than the § 1592 penalty calculation. Under the new 50% penalty floor, the financial difference between a prior disclosure and a post-audit penalty has grown dramatically. If your company has identified compliance errors that have not yet been disclosed, the incentive to file a prior disclosure before the new mitigation standards take effect has never been stronger.
Foreign supplier relationships require enhanced due diligence. The supply chain certification requirements, the forced labor enforcement prioritization, and the transshipment focus collectively signal that CBP is going to be scrutinizing the full supply chain behind each entry — not just the entry documents themselves. Importers whose supply chains include countries or industries with known forced labor or transshipment risks need to have documented due diligence that they can present to CBP if questions arise.
Foreign IOR relationships need immediate review. If your import program involves a foreign entity acting as the importer of record — a common structure in certain e-commerce and drop-shipping models — that arrangement may not survive the Section 2 changes. The prohibition on foreign IOR informal entry filings and the heightened requirements for foreign IORs on formal entries will require restructuring for many import programs that have relied on foreign IOR arrangements.
Important Caveats — Implementation Is Not Yet Complete
It is important to note that this is an executive order — a direction to agencies to act — not a regulation or statute. The order itself acknowledges that implementation must be consistent with the Administrative Procedure Act, which requires notice-and-comment rulemaking for significant regulatory changes. Many of the provisions in Sections 2 and 3 will require formal rulemaking before they have the force of law against importers, which means the timeline for full implementation may extend beyond the stated 90 and 180-day deadlines for the rulemaking process itself.
The Section 4 mitigation guideline revisions, however, may be implemented more quickly. CBP’s mitigation guidelines are internal agency policy — they can be revised without formal notice-and-comment rulemaking, which means the 50% penalty floor and the elimination of repeat-offender mitigation could take effect within the 90-day window as stated.
We will be monitoring the implementation process closely and publishing updates as CBP issues the revised guidelines, proposed rules, and implementing guidance that will define exactly how these provisions operate in practice. The executive order sets the direction. The regulations and guidelines that follow will define the details.
Questions About How This Order Affects Your Import Program or Pending Enforcement Matter
Great Lakes Customs Law is monitoring the implementation of this executive order and advising clients on its implications for both pending enforcement matters and ongoing compliance programs. If you have a pending § 1592 penalty, a liquidated damages claim, or a prior disclosure decision to make, the timing implications of this order are significant and should be discussed with counsel now rather than later.
Contact us at (734) 855-4999, by text, on WhatsApp, or online for a consultation.