IORs must be CTPAT validated or use a CTPAT-validated customs broker beginning January 5, 2027.
U.S. Customs and Border Protection (CBP) has issued an Interim Final Rule establishing new requirements for US Importers of Record and foreign Importers of Record (IORs) and the customs brokers that represent them. Effective January 5, 2027, foreign IORs must either be validated members of the Customs Trade Partnership Against Terrorism (CTPAT) program or use a CTPAT-validated customs broker when filing import entries into the United States, such as A.N. Deringer Inc. CBP has published the full rule in the Federal Register, which you can access here.
The rule also introduces new importer classification standards, entry declaration requirements, and broker verification obligations that may affect not only foreign importers, but also US Importers of Record.
Why CBP Is Making This Change
According to CBP, the agency continues to face significant challenges collecting duties, taxes, and fees from foreign importers. CBP reports more than $1 billion in unpaid principal balances associated with non-CTPAT foreign importers and significantly lower collection rates when compared to U.S.-based importers.
As a result, CBP is introducing new requirements designed to verify importer identity, strengthen broker due diligence obligations, and increase accountability for import transactions.
New Definition of a U.S. Importer of Record
For the first time, CBP has established specific criteria defining who qualifies as a U.S. Importer of Record.
Generally, a U.S. IOR must be:
- A U.S. citizen or lawful permanent resident; or
- A business entity organized under U.S. law, located in the United States, and meeting specific ownership and control requirements.
Entities that do not satisfy these requirements may be considered foreign IORs, even if they are incorporated in the United States.
Notably, some U.S. subsidiaries of foreign parent companies may be classified as foreign IORs under the new ownership-based analysis.
Additional Compliance Requirements
The rule introduces several significant compliance obligations:
U.S. IOR Declarations on Every Entry
Beginning January 5, 2027, importers or their brokers must declare on each entry and entry summary whether the importer qualifies as a U.S. IOR.
Inaccurate declarations may result in:
- Live entry requirements
- Loss of immediate delivery privileges
- Additional enforcement scrutiny
- Potential penalty exposure
Enhanced Broker Verification Responsibilities
Customs brokers will be required to verify and document an importer’s eligibility to claim US IOR status before filing an entry with CBP.
The regulations require Brokers request documentation such as:
- Corporate formation records
- Ownership information
- Financial statements
- Citizenship or permanent residence documentation
- Evidence of U.S. assets or property ownership
Brokers will be required to maintain verification records for five years.
Potential Impact on Foreign Importers
CBP estimates that a significant number of foreign importers currently rely on brokers that do not maintain CTPAT validation. Those importers may be required to:
- Transition to a CTPAT-validated customs broker;
- Seek CTPAT membership and validation themselves; or
- Reevaluate their importer-of-record structure.
Importers should also be aware that obtaining CTPAT validation can take several months. Early planning is strongly recommended.
Recommended Actions
Importers should consider taking the following steps now:
- Determine whether your organization qualifies as a U.S. or foreign Importer of Record under the new rule.
- Review ownership structures and supporting corporate documentation.
- Confirm whether your customs broker is currently CTPAT validated.
- Assemble documentation that may be required to support U.S. IOR status.
- Evaluate whether participation in CTPAT is appropriate for your organization.
- Review internal procedures and ACE filing processes to prepare for the new declaration requirements.
Customs brokers should also begin assessing their client base and due diligence procedures in anticipation of the new verification obligations.
Implementation Timeline
- November 5, 2026: Interim Final Rule published.
- January 5, 2027: Rule becomes effective.
- January 5, 2027: Public comments due.
- May 6, 2027: Expected deadline for full broker compliance with verification requirements.
Questions?
These new requirements may significantly impact foreign importers, multinational corporate structures, and customs brokerage relationships.
If you have questions about how this rule may affect your business or importer-of-record structure, please contact your Deringer representative.
