CBP squeezes importers of record
CBP is handing non-resident imports to one broker in five
US Customs and Border Protection (CBP) has put a rule on public view that, by its own count, could stop about a third of foreign importers from bringing goods into the United States. The interim final rule is called “Heightened Requirements for Foreign Importers of Record”. It is scheduled for publication in the Federal Register on Friday 6 November. It takes effect 60 days later, on 5 January 2027, and comments close the same day.
An importer of record (IOR) is the party legally responsible for an import entry and the duties owed on it. Under the rule, a foreign IOR may make formal or informal entry for consumption only in two cases. Either it is validated under CTPAT, the Customs Trade Partnership Against Terrorism, which is CBP’s voluntary supply-chain security programme. Or it files through a licensed customs broker that is CTPAT-validated itself.
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CBP’s regulatory analysis is blunt about who is caught: “The remaining 32% of foreign IORs will not be able to continue importing into the United States unless they switch brokers or become CTPAT validated themselves.”
In our view, this is less a security rule than a market-sorting rule. It takes a large, scattered book of non-resident import business and sends it to the minority of brokers that hold CTPAT validation. Every broker, validated or not, also picks up new checking work and much bigger penalty exposure. Forwarders with brokerage arms should treat 5 January as a commercial deadline, not just a compliance one.
What the rule actually requires
The rule adds a new Part 110 that defines a “U.S. IOR”. It is a US citizen or lawful permanent resident, or an entity organised under US law and located in the United States. That entity must also, at all times, meet one of two tests. At least 51% of its controlling beneficial owners must be US citizens or permanent residents. Or it must directly own a significant amount of unencumbered US real property. Anyone else is a foreign IOR.
Filers must declare that status. According to the rule, “the IOR or the broker on behalf of the IOR must select the checkbox on CBP Forms 3461 and 7501”. Those are the entry and entry summary forms. If a company ticks the box and does not qualify, STR’s summary says CBP can require live entry and end immediate delivery privileges. Under live entry, goods are released only once the entry summary is filed. Immediate delivery is the faster route that releases goods before the full paperwork is done.
Brokers carry the checking. A broker “must verify that the client qualifies as a U.S. IOR” before filing and must “maintain records related to the broker’s verification for five years”. STR notes that a broker without CTPAT validation that finds a client is not a U.S. IOR must stop filing for that client. Brokers can ask for delayed compliance with the verification duty. But the rule says “All customs brokers are expected to be in full compliance with the requirements of this rule no later than May 6, 2027.”
The penalty change is the part brokers will feel. The rule says a broker “may be subject to penalties under 19 U.S.C. 1592 or any other enforcement actions available under the law.” Section 1592 penalties can be assessed up to the domestic value of the goods. The rule notes that the usual broker penalty statute, section 1641, carries “a maximum monetary penalty amount of $30,000 for violations.” On one bad container, a broker’s exposure moves from a fixed ceiling to the value of the goods.
CBP’s numbers show who wins and who loses
CBP looked at importers active from 1 October 2020 to 6 February 2026. It counts 1,187,809 active IORs. Of these, 187,127 are foreign IORs outside CTPAT. Just 744 foreign IORs are CTPAT-validated, which is 0.40% of the foreign group. Another 127,691, or 67.97%, already use a CTPAT-validated broker. That leaves the roughly 32% that CBP says will have to move. By our arithmetic, applying CBP’s 32% to its 187,871 foreign IORs gives about 60,000 importers.
Now look at the broker side. CBP counts 3,100 brokers that filed entry summaries in the period. Of those, 643 are validated. The rule says “21% are CTPAT validated, 1% are CTPAT certified, and 78% are not CTPAT validated.” It also says “About two-thirds of brokers have submitted an entry summary for a foreign IOR.”
Put those together. Around 2,000 brokers have handled foreign IOR business. If they look like the wider pool, most are not validated, and those cannot keep doing it from 5 January unless they get validated. The 643 validated brokers can. That is why we call this a market-sorting rule.
Getting validated is not quick for importers either. Logistics firm Mallory Alexander wrote in August that “CTPAT is closed to most foreign IORs, so you need a validated broker willing to take you.” CBP’s own figure of 744 validated foreign IORs suggests the same.
CBP estimates the rule’s monetised cost at $1,233,253 a year at a 3% discount rate. That number covers system programming, CTPAT applications and handling delay requests. It does not price the time brokers will spend collecting ownership and property records from every client. It does not price lost clients either.
Why CBP is doing it: unpaid bills
CBP’s stated reason is collection. The rule says the problems “exist primarily because foreign IORs and their assets are primarily located outside the United States.” Its figures make the case:
- As of 6 February 2026, non-CTPAT foreign IORs owed $1.01 billion in unpaid principal on bills opened since 1 October 2020.
- CBP audits found $1.16 billion in lost revenue from foreign IORs between 1 January 2020 and 27 August 2026. CBP says it “was able to recoup only $35.7 million, implying a collection rate of 3.1% for the missed payments.” For US IORs, it puts that rate at 15.2%.
- The average unpaid bill per entry is $29.16 for foreign IORs and $22.57 for US IORs.
The rule also points at structures used to look domestic. It says “These shell companies obscure the real identity and corporate structure of their owner”. That explains why the US IOR test turns on beneficial ownership and real property, not just a US address.
The rule carries out Section 2 of Executive Order 14411, “Strengthening Customs Enforcement”, signed on 3 June 2026. Law firm Mayer Brown’s June summary of that order shows it goes further than this rule. It tells DHS to bar foreign IORs from informal entry within 180 days, and it limits their use of continuous bonds. On the order’s broker provisions, the authors wrote that it “represents a material increase in broker liability.” This rule stops short of a full informal-entry bar. CBP says it “will continue to monitor informal entries for consumption” and “may prohibit informal entries for consumption filed by a foreign IOR”.
The 18 November deadline comes first
A nearer deadline sits beside the rule. Customs broker GHY International reported on 4 November, citing the brokers’ association NCBFAA, that “numerous” CTPAT-certified importers have had CBP letters. The letters warn that their IOR numbers may be voided for entries filed from 12:01am ET on Wednesday 18 November. The problem is the accuracy of data on Form 5106, the form that registers an importer’s identity with CBP. A voided number cannot be used to enter goods.
GHY’s checklist shows what CBP is looking for. The physical address cannot be a registered agent, customs broker, freight forwarder, PO box or business service centre. Broker and forwarder contact details should be replaced with the importer’s own. The broker’s power of attorney must be signed directly with the importer. GHY ties this to an August Federal Register notice on the accuracy of IOR data.
Read together, the two moves show the direction. CBP wants to know exactly who the importer is and where its assets are. And it is willing to stop entries to find out.
What forwarders should do now
First, sort your book. List every client that files as IOR in its own name from outside the US. That means DDP (delivered duty paid) shippers, overseas e-commerce sellers and non-resident importers. Check whether your brokerage arm, or the broker you use, is CTPAT-validated. If not, those clients have until 5 January.
Second, decide whether to apply. A forwarder with a broker that is not validated has two options. It can apply for CTPAT and ask CBP for delayed compliance with the verification duty. Or it can hand those clients to a validated partner. Doing nothing is not an option.
Third, price the checking. Every client now needs a file showing citizenship, beneficial ownership or US real property. Mallory Alexander put it plainly: “Broker due diligence isn’t free either, and it will show up in your fees.” Clients who are not ready will slow down onboarding.
Fourth, fix 5106 records this week. Any client whose ACE profile shows a forwarder’s address or contact details is the kind of record CBP’s letters target. 18 November is under two weeks away and lands in the holiday shipping season.
The lanes most exposed are those carrying DDP and direct-to-consumer cargo into the US. Much of that is air and e-commerce freight from Asia, where the overseas seller often acts as IOR.
Our prediction
We expect the 5 January 2027 effective date to hold, with no general delay announced before then. CBP has already built in its relief valve: delayed compliance for brokers up to 6 May. That leaves little reason to move the date for everyone. We also expect a visible shift of foreign IOR clients to validated brokers through December. And we expect CBP to follow with a separate bar on informal entries by foreign IORs before the 6 May 2027 full-compliance date, as the June executive order directs.
Sources
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