White House Issues Sweeping Customs Reform Executive Order: Key Takeaways for Importers

The White House on June 3, 2026, issued an executive order on "Strengthening Customs Enforcement" that directs a sweeping overhaul of how goods enter the U.S. The order targets evasion by importers, tightens requirements on foreign entities and significantly raises the stakes for noncompliance. U.S. Customs and Border Protection (CBP) Commissioner Rodney Scott stated that "importing into the U.S. has for too long been treated as a right and not a privilege," signaling an agency prepared to use these new tools aggressively. Though many provisions require future rulemaking before they become operative, the order establishes firm deadlines and sets clear enforcement priorities. Here's what importers need to know.

New and Heightened Requirements for Importers of Record

The order raises the bar for those who can serve as an importer of record (IOR). Within 180 days, CBP must implement new eligibility rules requiring every IOR to hold minimum tangible domestic assets or bonding, submit expanded disclosures and maintain "good standing."

• Minimum Asset and Bond Requirements: All IORs must maintain sufficient tangible U.S.-based assets, bonding or both to ensure compliance with customs and trade laws. Minimum bond coverage will increase.
• Expanded Data Disclosures: IORs must provide additional information to CBP, including projected import volumes, beneficial ownership, business affiliations, foreign tax and domestic asset details.
• "Good Standing" Requirement: CBP will define "good standing" based on compliance history, payment record and enforcement actions. IORs that do not meet this standard – including those tied to fentanyl or other illicit imports – will be barred from importing.
• Registry Cleanup and Risk Tiering: CBP will remove inactive IORs, verify compliance of active IORs and assign risk tiers based on compliance history and audit results. This means compliance history will directly affect the ability of importers to clear goods.
• Enhanced Continuous Vetting: All participants in the import ecosystem – including brokers, freight forwarders and custodians of bonded merchandise – face enhanced and recurring vetting.

Foreign Importers Face a 2-Track System

The order creates an explicit distinction between "U.S. IORs" and "foreign IORs," and the gap in treatment is substantial.

• U.S. IOR: Must be organized under U.S. law, maintain its principal place of business domestically and have controlling beneficial owners who are U.S. citizens or lawful permanent residents.
• Foreign IOR: Includes any entity that does not meet the definition of U.S. IOR. The order directs CBP to scrutinize shell structures and artificial arrangements designed to circumvent this classification.
• No Informal Entry for Foreign IORs and Restricted Bond Use for Formal Entry: Foreign IORs will be barred from filing informal entries entirely. For formal entries, they cannot use continuous bonds (unless they individually demonstrate revenue protection to CBP's satisfaction) and must either hold Customs-Trade Partnership Against Terrorism (CTPAT) validation or retain a CTPAT-validated licensed broker.
• Foreign Export Documentation: Within 90 days, CBP will additionally require importers to hand over any documentation the foreign exporter was required to submit to its own government's customs authority before shipping to the U.S. This is a notable expansion: It effectively imports foreign regulatory requirements into U.S. customs compliance.
• Certifications: Importers will need to certify compliance with the Countering America's Adversaries through Sanctions Act, 18 U.S.C. § 545 (smuggling prohibitions), and other statutes to be identified by CBP. Beyond legal certifications, companies must also provide granular supply chain data – manufacturer product identifiers, production method details, composition, grade and size specifications.

The Cost of Getting It Wrong Has Substantially Increased

Perhaps the most immediately consequential provision: Within 90 days, the U.S. Department of Homeland Security (DHS) must revise its penalty mitigation guidelines. The order expressly requires implementation "consistent with applicable law, including the Administrative Procedure Act," meaning some provisions will require notice-and-comment rulemaking before taking effect – creating both a compliance window and potential legal challenges.

• New Penalty Floors: CBP will establish a minimum penalty floor of not less than 50 percent of the assessed penalty. Under the prior framework, penalties were frequently mitigated down to nominal amounts. That era appears to be over. Repeat offenders will receive no mitigation at all. Minimum liquidated damages will also increase.
• Broker Liability: Brokers who fail to conduct due diligence on clients, repeatedly represent noncompliant importers or fail to respond timely to CBP inquiries face maximum statutory penalties.
• Enforcement Priorities: The order also directs the DHS Secretary and U.S. Attorney General to prioritize enforcement in four specific areas: forced labor, misclassification, undervaluation and illegal transshipment. Companies in sectors with significant exposure to Uyghur Forced Labor Prevention Act enforcement or country-of-origin scrutiny should take particular note.
• Noncompliant Goods Will Be More Difficult to Retrieve: Within 90 days, DHS will streamline seizure and disposal of noncompliant shipments. The order directs CBP to reduce regulatory friction around voluntary abandonment, increase bond requirements for high-risk cargo, authorize third-party disposal services and make use of expedited forfeiture under 19 U.S.C. § 1612. The message appears clear: Goods that don't meet requirements will be seized faster and returned less often.

Implementation Timeline

The order's deadlines are staggered but aggressive. Legislative recommendations are due to the president within 45 days (mid-July 2026). The 90-day tranche (penalty revisions, foreign export documentation requirements, disposal procedures and transparency measures) lands in early September 2026. The more structural IOR reforms (asset requirements, good standing, enhanced vetting, registry overhaul) follow at 180 days, by November 30, 2026. A report on the order's overall effectiveness is due in June 2027.

Next Steps for Importers

For companies that rely on cross-border supply chains, the priority actions are straightforward:

• Evaluate whether your IOR structure (particularly any foreign IOR arrangements) will survive the new eligibility framework.
• Stress-test your bonding and domestic asset positions against higher minimums.
• Verify that beneficial ownership and supply chain disclosures are current and accurate.
• Ensure product data is complete, consistent and available.
• Review supply chain documentation for forced labor, origin, valuation, classification and transshipment risk and confirm that your customs broker holds CTPAT validation.
• Respond promptly to broker or CBP requests for information.

Companies that wait until the rules are final may find their goods stuck at the border with fewer options for retrieval. Holland & Knight's International Trade Group and Customs Team regularly assist importers and customs brokers in navigating enforcement actions, voluntary disclosures, prior disclosure filings and compliance program design. We are actively monitoring CBP rulemaking under this order and are available to counsel clients on how to position their operations ahead of each deadline.

For more information or questions on navigating today's trade environment, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.