New Customs Enforcement Order Gives Importers a Limited Window to Review Tariff-Driven Import Practices

By Brett W. Johnson, T. Troy Galan, and Derrick Kyle

On June 3, 2026, President Donald J. Trump issued an Executive Order titled “Strengthening Customs Enforcement,” directing the Department of Homeland Security and U.S. Customs and Border Protection (CBP) to increase scrutiny of importers, expand reporting requirements, enhance audits, and impose stricter penalties for noncompliance. Companies that act as importers of record should evaluate global supply chains to ensure compliance and expediting processing in importing goods into the United States.

The Executive Order is not an isolated policy development. As new tariffs have been implemented, many importers and end-users have changed how they import merchandise in an attempt to mitigate tariff impacts. Some changes relate to updating Harmonized Tariff Schedule (HTS) classification or changing global supply chain manufacturers. In these instances, importers are working to comply with U.S. customs law. But, there are other schemes that improperly reduce entered value, change HTS classifications or countries of origin without support, or shift liability to a foreign supplier or its domestic pass-through U.S. entity.

The Executive Order makes clear that CBP is aware of these practices. The relevant structures include delivered duty paid (DDP) terms, foreign suppliers as importers of record, nominal U.S. importer domestic entities, separate invoices for the same product, and unsupported HTS changes and country-of-origin changes.

The practical message is clear. Any company that materially changed its import practices after the imposition of new tariffs in 2025 should conduct a customs compliance review to ensure compliance or consider voluntary disclosure in an effort to avoid significant criminal and civil liabilities.

I. The Executive Order Targets Common Tariff-Avoidance Structures

The Executive Order’s provisions correspond directly to import structures, valuation methods, classification changes, and origin positions that became more common as tariff rates rose.

DDP – Under a legitimate DDP arrangement, the foreign seller generally imports the merchandise, pays applicable duties and tariffs, and delivers the goods to the U.S. customer after customs clearance.

The customs risk arises where the foreign supplier has no meaningful U.S. presence. Similar concerns arise where a foreign supplier creates a nominal U.S. company solely to obtain an importer of record number, but the entity has no employees, operations, capital, or independent business activity in the United States.

The Executive Order responds by directing CBP to require minimum tangible domestic assets, increased bonding, or both.

Two Invoices – Another area of concern is customs valuation. Some companies have attempted to reduce entered value by separating the total amount paid for imported merchandise into different charges, including research and development, design, engineering, consulting, management, commissions, intellectual property, or other services.

Separate charges may be excluded from customs value in certain circumstances, but separate labels or invoices do not control the result. CBP examines what each payment covers and whether the amount is part of the transaction value.

Unsupported HTS or Country-of-Origin Changes – Importers should also review HTS classification or country-of-origin changes made after tariff rates increased. A change may be supportable where the prior classification was incorrect, the product materially changed, or the manufacturing process changed in a legally meaningful way.

The customs risk arises where the importer changes the HTS code or country of origin, but the product or production process stays the same. CBP generally will not treat a lower-duty HTS code or lower-tariff country of origin as valid merely because it appears on entry documents, even if provided by the foreign supplier.

Importers should expect CBP to compare the value, classification, and origin reported at entry against purchase agreements, payment records, service invoices, accounting entries, supplier documents, production records, and foreign export information in future enforcement actions.

II. What the New Importer Requirements Mean in Practice

The Executive Order directs CBP to begin revising importer eligibility regulations, guidance, and policies within 180 days.

Domestic Assets or Greater Bonding – CBP will require importers of record to maintain minimum tangible domestic assets, increased bond coverage, or both. For established U.S. companies, this may principally mean additional disclosure and bonding requirements. For foreign importers, startups, special-purpose subsidiaries, or thinly capitalized entities, the effect may be more significant.

Restrictions on Foreign Importers – Foreign importers of record will no longer be permitted to use informal entry procedures. They also may be unable to rely on continuous bonds for formal entries unless CBP determines that revenue is fully protected and compliance is assured. These provisions may directly affect foreign sellers importing under DDP terms.

Ongoing Importer Vetting – The Executive Order directs CBP to require importers to remain in “good standing,” update the importer registry, remove inactive importers, establish risk-based tiers, and conduct recurrent vetting. Importer eligibility may therefore become an ongoing compliance issue, not a one-time registration issue.

Expanded Information Requirements – Importers should expect to provide more information regarding beneficial ownership, affiliates, domestic assets, anticipated import volumes, foreign tax identifiers, suppliers, manufacturers, product identifiers, specifications, production methods, and supply chains.

Within 90 days, the Executive Order directs CBP to require documentation or information that the foreign exporter submitted to the foreign customs authority. Foreign export records may show a different value, product description, manufacturer, origin, or transaction structure than the information reported when the goods enter the United States.

III. AI to Identify Violations

CBP already uses artificial intelligence (AI) to identify enforcement risks across large volumes of trade data. The Executive Order will materially increase the data available for that analysis.

CBP will be able to compare U.S. entry data against foreign export declarations, commercial invoices, service invoices, ownership records, supplier documents, and information submitted by other importers.

These tools make it easier to identify patterns, including:

Entry acceptance is not approval of classification, valuation, origin, or transaction structure. The statute of limitations period for civil customs violations is five (5) years.

IV. Penalty Changes Make a Prior Disclosure More Important

The Executive Order separately directs CBP, within 90 days, to revise its penalty mitigation standards. Importers should therefore consider whether a prior disclosure is appropriate now, before the new standards are implemented and before CBP identifies the issue.

The revised standards are expected to establish a minimum penalty of at least 50% of the assessed penalty, absent exceptional circumstances materially affecting national security, and eliminate mitigation for repeat offenders.

By contrast, under the current mitigation guidelines, a valid prior disclosure can materially limit penalty exposure. If a violation resulted from negligence or gross negligence and caused an underpayment of duties, the importer generally pays the unpaid duties and interest, but the monetary penalty is limited to interest on the unpaid duties.

A prior disclosure needs to be made before, or without knowledge of, the commencement of a formal CBP investigation. Once CBP identifies the potential violation and begins an investigation, the opportunity to disclose and receive mitigation may be lost.

V. What Importers Should Consider Doing Now

Companies that changed their import practices in response to increased tariffs should consider conducting an attorney-client privileged customs audit or review to identify risks. Importers should treat the Executive Order as an opportunity to identify and correct potential issues before CBP initiates its own review, not as a grace period. The customs risk tolerance that may have existed during the initial tariff changes is no longer appropriate. Importers should review tariff-driven import practices now, document compliant positions, stop unsupported practices, and evaluate whether a prior disclosure is appropriate.

***Opinions expressed are those of the authors and not necessarily the firm’s or their colleagues’.