DIRECTING COMPREHENSIVE CUSTOMS REFORM: Today, President Donald J. Trump signed an Executive Order aimed at enhancing the enforcement of U.S. customs laws through comprehensive reforms.
- The Order instructs the Department of Homeland Security (DHS) and the U.S. Customs and Border Protection (CBP) to toughen several requirements for importers of record (IORs). These include:
- raising bonding requirements and mandating that IORs consistently maintain a minimum level of tangible domestic assets or bonding, or both;
- applying stricter requirements for formal entry to foreign IORs;
- permitting only U.S. IORs to file informal entries;
- enforcing a “good standing” requirement for all IORs; and
- enhancing vetting procedures for all individuals and entities engaged in activities directly related to the importation of goods.
- The Order mandates DHS and CBP to implement disclosure and certification requirements to combat duty evasion and ensure compliance with supply chain regulations.
- The Order calls for increased enforcement of existing customs laws by DHS and CBP, including establishing a 50% minimum penalty floor to limit CBP’s discretion in reducing penalties for importers who violate customs laws.
- The Order directs DHS to improve the seizure and disposal of non-compliant imports by easing regulatory burdens on voluntary abandonment and authorizing third-party disposal.
- The Order orders DHS to enhance transparency in customs by publishing annual transparency reports.
- The Order instructs DHS to propose legislation to further strengthen customs enforcement.
PROMOTING ECONOMIC STRENGTH AND NATIONAL SECURITY BY COMBATTING CUSTOMS FRAUD: President Trump emphasizes the vital role of customs enforcement in national security and the need to address long-standing issues within the regulatory framework.
- Customs enforcement is crucial for U.S. national security and economic stability. It prevents the import of unlawful and hazardous goods and ensures that IORs fulfill their duty obligations and adhere to various federal laws, including those governing forced labor and product safety.
- Customs reform is overdue. Systemic inefficiencies, loopholes, and outdated processes have allowed bad actors to bypass federal laws.
- The Order aims to address these chronic issues through comprehensive reform, focusing on national security protection, lawful trade promotion, timely duty collection, system modernization, compliance reinforcement, and safeguarding the American economy.
- The Order aligns U.S. customs policies with those of many trading partners, where foreign entities or individuals are often prohibited from serving as the IOR or generally required to partner with verified domestic parties, enhancing compliance and accountability.
- The reforms outlined in the Order will not be implemented immediately. DHS and CBP will engage stakeholders in the standard rulemaking process, allowing affected parties a chance to adapt their operations if necessary.
BUILDING ON A RECORD OF PUTTING AMERICA FIRST IN TRADE: President Trump is taking steps to restore integrity to the U.S. customs system, address duty evasion, and ensure foreign importers comply with regulations.
- From Day One, under his America First Trade Policy, President Trump instructed his Administration to take measures to ensure duties are collected and tariffs are not avoided.
- President Trump eliminated the de minimis loophole, previously exploited by foreign shippers to inundate American markets with inexpensive, duty-free goods and channel illicit fentanyl into the country.
- Several of President Trump’s Agreements on Reciprocal Trade include commitments to collaborate on combating duty evasion.
- The President signed the One Big Beautiful Bill Act into law, which permanently abolishes the statutory basis for the de minimis exemption worldwide, effective July 1, 2027.
