Key Points

• Executive Order 14411 does not ban foreign companies from acting as importer of record (IOR), but it sharply limits how they can enter goods.
• Foreign IORs will lose access to informal (low-value) entry and face bond and Customs-Trade Partnership Against Terrorism (CTPAT) conditions for formal entry.
• Customs and Border Protection (CBP) is already acting, and many changes to the rules are expected by Nov. 30, 2026.

Important changes to customs and trade rules are in store for IORs. Soon, foreign IORs will be barred from filing informal entries. For formal entries, foreign IORs will generally need to post single-transaction bonds and be CTPAT-validated or use a CTPAT-validated broker. Reportedly, there are only about 650 CTPAT-validated brokers in the United States. Further, all IORs, both foreign and domestic, face several changes, including new good standing, minimum asset or bonding, and beneficial ownership disclosure requirements. The government will take steps to finalize many of these changes by the end of November.

It all stems from Executive Order 14411, “Strengthening Customs Enforcement,” which President Trump signed on June 3, 2026. The changes set forth in the order are rapidly coming into view for IORs and the larger customs and trade community.

Who Is a ‘Foreign IOR?’

The order defines the term broadly. An entity is a “U.S. IOR” only if it is organized under U.S. law, is located in the United States, and at all times has controlling beneficial owners who are U.S. citizens or lawful permanent residents. Alternatively, an entity can qualify if it owns a significant amount of U.S. real property. Any IOR that lacks these characteristics is a “foreign IOR.”

To be “located in the United States,” an entity must have at least:

• Its principal place of business in the United States.
• A physical presence where significant business activity is conducted here.
• Sufficient tangible U.S. assets, considering the scale of its operations and whether it is an instrumentality of a foreign manufacturer.

The Department of Homeland Security (DHS) must issue guidance on this test, prioritizing stopping shell companies and artificial business structuring. As a result, a newly formed U.S. subsidiary with no real U.S. operations, or one with foreign controlling owners, may still be treated as a foreign IOR.

Changes for Foreign IORs

By the end of November, DHS must take steps to enact the following changes:

• Prohibit foreign IORs from filing informal entries.
• Prohibit foreign IORs from relying on a continuous bond for entry unless CBP is satisfied that the revenue is fully protected.
• Require foreign IORS to be validated in the CTPAT program, if eligible, or use a CTPAT-validated licensed customs broker.

Changes for All IORs

DHS must also, for all IORs, not just foreign IORs:

• Impose a “good standing” requirement based on the IOR’s history of compliance with customs and trade laws and payment of required customs liabilities.
• Require enhanced vetting procedures for entities seeking to import goods.
• Require that IORs maintain minimum domestic assets or bonding.
• Impose new disclosures, such as those regarding beneficial ownership, and higher minimum bonds.

Timeline and Next Steps

• This summer, following the Executive Order, CBP announced it would begin voiding IOR numbers with inaccurate or incomplete CBP Form 5106 data.
• Nov. 30 is the deadline for DHS and CBP to take steps to require most of the IOR eligibility, good standing, and vetting changes discussed above.
• We expect additional proposed rules and guidance, including on the “located in the United States” test.

What Should Companies Do Now?

• Inventory which entities act as IOR and test each against the new definitions.
• Confirm Form 5106 data is accurate and belongs to the IOR.
• Consider shifting the IOR role to a U.S. affiliate or customer with real U.S. substance, and assess tax, liability and other consequences.
• Foreign IORs should plan for single-transaction bonds and confirm that brokers are CTPAT-validated.

For more information, please contact Mark G. Eskenazi at 202.461.3109 or meskenazi@foxrothschild.com, or Lizbeth R. Levinson at 202.794.1182 or llevinson@foxrothschild.com.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the authors and not necessarily this law firm or its clients.