U.S. Customs and Border Protection (CBP) has issued an Interim Final Rule (IFR), titled Heightened Requirements for Foreign Importers of Record, scheduled for publication on November 6, 2026. The rule implements provisions of Executive Order 14411, Strengthening Customs Enforcement, specifically those addressing Importers of Record (IORs).
Although the rule is primarily intended to address foreign IORs, its provisions have broader implications for U.S. importers and customs brokers. In particular, it establishes additional qualification requirements for U.S. IORs, introduces expanded responsibilities for customs brokers, and increases their potential exposure to penalties.
In its Federal Register notice, CBP cited concerns that certain IORs use arrangements or schemes to undervalue imported goods, withhold critical information about themselves, the merchandise, or its production processes, and avoid payment of applicable duties. According to CBP, these practices pose risks to national security and product safety, undermine foreign relations, disadvantage domestic businesses, and ultimately harm American consumers.
CBP further explained that validating IORs through the Customs Trade Partnership Against Terrorism (CTPAT) program provides greater oversight of foreign importers, helping mitigate risks to government revenue, domestic industries, consumers, and national security. This validation process also gives CBP greater visibility into corporate ownership structures and supply chains, strengthening its ability to identify risks and pursue enforcement actions against foreign IORs.
Importer of Record Status Declaration Requirements can be reviewed here.
The principal regulatory changes are summarized below.
1. New Qualifications for U.S. IORs (19 CFR Part 110)
Under new § 110.2, individuals qualify as U.S. IORs if they are U.S. citizens or lawful permanent residents.
Entities must be both organized under U.S. law and located in the United States, and satisfy at all times at least one of the following alternatives:
Beneficial ownership/control: At least 51% of the entity's beneficial owners, as defined in § 110.1, must be U.S. citizens or lawful permanent residents and have control of the entity; or
Real property: The entity must directly own a significant amount of unencumbered real property in the United States. CBP explains that property may be partially encumbered if its net unencumbered value remains significant.
Importantly, § 110.1 defines a "beneficial owner" as a natural person who either (a) exercises substantial control over the entity or (b) owns or controls at least 25% of its ownership interests, directly or indirectly. The definition reaches through intermediate corporate ownership layers and contains specified exclusions.
CBP may verify U.S. IOR status by examining, among other factors, the entity's principal place of business, substantial U.S. business operations (including employees, revenue, and/or retail locations), unencumbered physical domestic assets, real property, sales relative to cost of goods sold, and capitalization. Relevant to this verification process, CBP is adding a definition of “physical domestic assets,” defined as U.S. bank deposits, Treasury bonds, and U.S.-located real property, inventory, machinery, and equipment. CBP said it purposely excluded accounts receivable and similar intangible assets from this definition because they are harder to trace and seize.
Any IOR that does not qualify under § 110.2 is classified as a foreign IOR under § 110.3, even if it is incorporated in the United States.
2. Restrictions on Foreign IORs (§ 141.21)
The rule requires foreign IORs to either be CTPAT validated or use a CTPAT-validated licensed customs broker, depending on their status:
CTPAT-validated foreign IORs may make entry themselves, if otherwise entitled to do so, or retain any licensed customs broker, regardless of the broker's CTPAT status.
Foreign IORs that are not CTPAT validated must designate a licensed, CTPAT-validated customs broker to make entry or act as IOR.
Importantly, CTPAT validation—not merely certification—is required. CBP states that only Canadian foreign IORs are currently eligible for CTPAT validation as importers. Consequently, other foreign IORs generally must rely on a CTPAT-validated licensed customs broker.
The rule also addresses situations where a broker acts as IOR on behalf of a principal identified in a power of attorney. If that principal is not itself the IOR but would qualify as a foreign IOR under § 110.3, the broker must be CTPAT validated. The designated CTPAT-validated broker must act as IOR if the principal is not the owner or purchaser of the merchandise.
The entry requirements under § 141.21 apply to all formal entries and specified informal entries for consumption requiring CBP Forms 3461 or 7501 (operationally, Entry Types 11, 12, and 13). Although Executive Order 14411 directed CBP to prohibit informal entries by foreign IORs, the IFR does not implement that prohibition at this time. CBP will continue monitoring such entries and may impose a prohibition in the future.
3. New Filing, Verification, and Recordkeeping Requirements (Parts 111 and 141)
IOR declarations (§ 141.22). U.S. IOR qualification must be declared at both entry and entry summary using updated CBP Forms 3461 and 7501 or their electronic equivalents. The forms also identify when a broker acts as IOR for a principal. When a non-CTPAT-validated broker acts as IOR for a qualifying U.S. principal, the broker must identify that principal, declare the principal's U.S. qualification, and ensure the principal has a CBP Form 5106 on file. CBP's appropriate Center Director determines U.S. IOR status in verification proceedings.
Broker verification (§ 111.29(a)(2)). Before declaring a client to be a U.S. IOR, a broker must request and review records establishing the client's qualification. These may include citizenship or residency evidence, corporate charters, financial statements and records, purchase receipts, and documents of title. The requirement applies regardless of the broker's CTPAT status.
Recordkeeping (§§ 111.21 and 111.23). Brokers must retain records of these verifications for five years from the date of verification.
Power of attorney (§ 141.46). Brokers must obtain a valid power of attorney when transacting customs business on behalf of a principal, including when acting as IOR. The power of attorney must be retained but need not be filed with CBP.
4. Expanded Enforcement and Broker Penalty Exposure (Parts 142 and 171)
An inaccurate declaration of U.S. IOR qualification may result in CBP requiring live entry, including payment of estimated duties, taxes, and fees before release, or discontinuing immediate-delivery privileges. These remedies may apply to formal and informal entries.
Of particular significance, CBP revises paragraph (K) of Appendix B to Part 171, expanding its discretion to pursue customs brokers under 19 U.S.C. § 1592 for qualifying violations, including negligent or grossly negligent violations where the broker does not share in benefits beyond customary brokerage fees. Previously, the guidelines generally directed such non-fraud, non-benefit-sharing broker violations toward the more limited remedies under 19 U.S.C. § 1641 (monetary penalty, suspension or revocation of a license or permit). Section 1592 may carry substantially higher penalties, depending on the nature and culpability of the violation. The amendment does not eliminate the statutory requirements for establishing a § 1592 violation.
5. Implementation and Delayed Compliance
The IFR becomes effective 60 days after Federal Register publication.
Eligible brokers may request delayed compliance specifically with the new § 111.29 verification requirements. An approved extension requires continued good-faith progress toward compliance. It does not postpone the rule's other requirements, including the foreign-IOR entry restrictions.
Milestone and Dates:
Effective date and comment deadline -- Jan. 5, 2027
Deadline to request delayed broker compliance -- Jan. 5, 2027
Final compliance deadline for approved broker extensions -- May 6, 2027
Bottom Line
The IFR is broader and impactful in ways other than its title suggests. U.S. IORs face substantially more detailed qualification and verification requirements, while foreign IORs face new restrictions on how they may enter merchandise predominantly through CTPAT validated customs brokers. Customs brokers assume new responsibilities for confirming importer status and documenting their verification, alongside expanded potential enforcement exposure.
Thank you for your continued support and understanding.
For further questions or discussion, please contact your South East World Wide Chicago, Ltd. Sales Representative.