US President Trump on June 3 signed an Executive Order to strengthen the enforcement capabilities of US Customs and Border Protection (US CBP), with a focus on importer of record (IOR) requirements and preventing the evasion of customs duties.
“Customs reform is long overdue. Systemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes have created opportunities for malign actors to evade Federal law. Examples of noncompliance include undervaluing imports, withholding critical information about IORs and the goods being imported, and avoiding payment of duties through various arrangements and schemes. These actions threaten national security, undermine foreign relations, disadvantage domestic businesses, and harm Americans.
The Executive Order states that within 180 days, the Department of Homeland Security and US CBP must rewrite IOR eligibility to include obligations relating to: minimum tangible US assets and bonding to import, mandatory disclosure of beneficial ownership and business affiliations, and a "good standing" test that categorizes importers according to risk. Foreign IORs lose the ability to file informal entries and face restricted bonds plus mandatory CTPAT validation.
The Executive Order states that prohibiting the filing of informal entries for foreign IORs puts all IORs on “equal footing and is necessary to treat IORs equally based on their individualized circumstances and in order to protect US revenue and domestic industry, protect American consumers, strengthen national security, and maintain foreign relations.”
US CBP enforcement and penalties for wrongdoing will also be enhanced as the result of the Executive Order, including enforcing liquidated damages claims against bonds for noncompliance, restricting in-bond utilization, increasing audits, and imposing maximum penalties for customs brokers who fail to conduct due diligence, repeatedly represent noncompliant clients, or fail to cooperate in a timely manner with requests for information by US CBP.