Ask An Attorney -CBP Looks to Brokers to Curtail Non-Compliant Importations
Executive Order 14411, Strengthening 2026 Customs Enforcement, issued June 3, 2026 and published at 91 Fed. Reg. 35125 (June 10, 2026), directs the Department of Homeland Security and U.S. Customs and Border Protection (“CBP”) to substantially strengthen importer eligibility, broker accountability, supply-chain transparency, customs enforcement, and penalty administration. The reforms affect importers of record (“IORs”), licensed customs brokers, freight forwarders, custodians of bonded merchandise, and other parties engaged in import transactions.
The most immediate compliance risk concerns the accuracy of IOR information submitted on CBP Form 5106. CBP’s notice, Accuracy of Importer of Record Data Submitted to CBP, 91 Fed. Reg. 53627 (Aug. 19, 2026), provides that enhanced enforcement will begin on September 18, 2026. CBP may immediately void an IOR number and take other enforcement action when Form 5106 information is inaccurate or incomplete. IORs and brokers acting on their behalf should therefore verify that each IOR’s physical address, email address, telephone number, ownership information, and related registration data are accurate, complete, current, and independently supportable.
Executive Order 14411 also directs CBP to revise importer eligibility requirements, increase minimum bond coverage, require minimum tangible domestic assets or bonding, expand ownership and business disclosures, establish a “good standing” requirement, update the IOR registry, assign risk-based tiers, and implement recurrent vetting. Foreign IORs face heightened restrictions, including limitations on informal entry and additional conditions for formal entry. These measures may materially affect whether an existing importer structure remains operationally and financially viable. Exec. Order No. 14411 §§ 2–3, 91 Fed. Reg. 35125, 35125–27 (June 10, 2026).
Enforcement exposure will also increase. The Executive Order directs CBP to expand audits, enforce liquidated damages claims, restrict in-bond privileges where appropriate, impose maximum penalties on brokers that fail to conduct due diligence or cooperate with CBP, and prioritize matters involving forced labor, misclassification, undervaluation, and illegal transshipment. It further directs revision of mitigation standards to establish a penalty floor of at least 50 percent of the assessed penalty, a minimum liquidated-damages floor, and no mitigation for repeat offenders, subject to applicable law and exceptional circumstances. Exec. Order No. 14411 § 4, 91 Fed. Reg. 35127 (June 10, 2026).
Licensed brokers also face a separate, time-sensitive compliance obligation. For the 2024–2027 triennial cycle, individually licensed brokers must complete 20 hours of qualifying continuing education between January 1, 2025 and January 31, 2027. The 2027 Triennial Status Report filing period is expected to run from mid-December 2026 through February 28, 2027. Brokers must retain certificates, course codes, course names, dates, educator information, and transcripts or comparable proof for at least three years. CBP has stated that a percentage of brokers will be selected for audit after March 2027. Failure to satisfy the applicable reporting and continuing-education requirements may result in license revocation under 19 C.F.R. §§ 111.30(d) and 111.102.
Taken together, these developments create a materially more demanding customs-compliance environment. IOR data accuracy, importer eligibility, financial sufficiency, beneficial-ownership transparency, broker due diligence, entry accuracy, supply-chain documentation, and documented supervision and control should now be treated as enterprise-level compliance priorities. Waiting for further regulations or operational instructions may leave importers and brokers with insufficient time to remediate deficiencies before CBP restrictions, cargo disruption, penalties, or license consequences arise.
Recommendations:
1. Complete an immediate Form 5106 validation review. Confirm each active IOR’s legal name, actual physical business address, IOR-controlled email address, IOR-controlled telephone number, tax identification data, ownership information, and authorized contacts. Obtain supporting documentation and correct discrepancies before September 18, 2026. Accuracy of Importer of Record Data Submitted to CBP, 91 Fed. Reg. 53627 (Aug. 19, 2026).
2. Adopt a written IOR verification procedure. Require documented onboarding, independent verification, periodic recertification, escalation of inconsistencies, and approval before a broker creates or updates an IOR record. Brokers should not transmit information they know or reasonably should know is false, misleading, incomplete, or unverified. 19 C.F.R. §§ 111.29(a), 111.32.
3. Assess importer eligibility and organizational structure. Review whether each U.S. or foreign IOR arrangement can satisfy anticipated domestic-asset, bonding, disclosure, good-standing, and vetting requirements. Foreign IORs should evaluate whether a compliant U.S. IOR structure or a CTPAT-validated broker arrangement may be necessary. Exec. Order No. 14411 §§ 2–3, 91 Fed. Reg. 35125, 35125–27 (June 10, 2026).
4. Stress-test customs bonds and financial capacity. Coordinate with sureties, customs brokers, finance personnel, and counsel to evaluate whether current bond amounts and domestic financial support remain adequate under the anticipated standards. Exec. Order No. 14411 § 2, 91 Fed. Reg. 35125–26 (June 10, 2026).
5. Conduct a targeted customs-compliance audit. Review representative transactions for classification, valuation, country of origin, forced-labor exposure, transshipment risk, Section 301 and Section 232 treatment, recordkeeping, powers of attorney, and reconciliation between commercial records and entry data. 19 U.S.C. § 1509; 19 C.F.R. Part 163; Exec. Order No. 14411 § 4, 91 Fed. Reg. 35127 (June 10, 2026).
6. Strengthen broker management and responsible supervision. Maintain written broker instructions, defined escalation procedures, documented client due diligence, periodic entry sampling, timely responses to CBP inquiries, and records demonstrating responsible supervision and control. 19 C.F.R. Part 111.
7. Centralize ownership and supply-chain documentation. Assemble beneficial-ownership, affiliate, foreign-tax, domestic-asset, manufacturing, product-identifier, composition, grade, size, and foreign-export documentation in a controlled repository capable of supporting future CBP requests. Exec. Order No. 14411 §§ 2–3, 91 Fed. Reg. 35125–27 (June 10, 2026).
8. Prepare for heightened penalties and reduced mitigation. Identify repeat or unresolved compliance issues, evaluate corrective action or prior disclosure where appropriate, and document remediation before revised mitigation standards are implemented. Exec. Order No. 14411 § 4, 91 Fed. Reg. 35127 (June 10, 2026).
9. Complete broker CLE and TSR readiness reviews. Confirm progress toward the 20-hour CE requirement, validate that courses are qualifying activities, organize proof of completion, assign responsibility for TSR filing, and target completion by January 31, 2027. 19 C.F.R. §§ 111.30(d), 111.102.
10. Monitor implementation developments. Track CBP’s Strengthening Customs Enforcement portal, Federal Register notices, CSMS messages, and applicable CBP guidance. Assign responsibility for evaluating each new measure and updating procedures, training, contracts, and controls.