Trade Alert: New Executive Order: Strengthening Customs Enforcement; USTR Proposes 301 Investigations on Forced Labor

U.S. Customs Enforcement 

The White House has issued a new Executive Order, “Strengthening Customs Enforcement.”
This action empowers U.S. Customs and Border Protection (CBP) with expanded tools to safeguard consumers, businesses, and revenue, while increasing transparency and compliance across international supply chains.

CBP enforcement and penalties will be strengthened under this Executive Order. This includes pursuing liquidated damages claims against bonds for noncompliance, restricting in-bond usage, increasing audits, and imposing maximum penalties on customs brokers who fail to conduct due diligence, repeatedly represent noncompliant importers, or do not timely cooperate with CBP information requests. 

Please read the Key Points of this Executive Order. 

Pursuant to 19 U.S.C. 66, 1484, 1498, 1623, 1624, and 4320, and any other applicable law, the Secretary of Homeland Security (Secretary) shall take steps to revise importer eligibility regulations, guidance, and policies consistent with the policy of this order.  

The revised regulations will:

• require that an Importer of Record (IOR) maintain at all times a minimum level of tangible domestic assets, bonding, or both, as determined by U.S. Customs and Border Protection (CBP) to be necessary to ensure compliance with U.S. customs and trade laws, and increasing the minimum required bond coverage for an IOR;
• require that an IOR be designated and reported to CBP, and that a bond, or sufficient tangible domestic assets, or both, be required, for all formal entries under 19 U.S.C. 1484 and informal entries under regulations promulgated pursuant to 19 U.S.C. 1498; and
• require that an IOR must provide to CBP additional data and identification information, including anticipated import volumes, year organized, ownership and beneficial ownership disclosures, business affiliation disclosures, and domestic asset disclosures, and any other data that CBP deems necessary.
• prohibit IORs who are not in CBP’s good standing list to import. 
• require IOR to provide more detailed information on: Ownership, Business operations, and Supply chain.
• enhance IOR and Foreign Importer of Record vetting which also include their affiliates such as their customs brokers and bonded custodians
• mandate submission of export documentation that were submitted to foreign administration prior to export into the U.S.
• remove inactive IORs and confirm active IORs are compliant by creating a risk based tiers.
• take action to expedite seizure/abandonment procedures; 
• limit penalty mitigation, and have higher penalty minimums
• subject brokers to higher audits, more penalties for knowingly representing noncompliant IORs
   

Foreign IOR:  (1) may not rely on a continuous bond to meet the bond requirements for entry, except as permitted by CBP when the foreign IOR has demonstrated that the revenue would be fully protected and that compliance with the laws, regulations, and instructions enforced by CBP would be assured; and (2) be validated in CBP’s Customs Trade Partnership Against Terrorism (CTPAT), if determined by CBP to be eligible, or use a CTPAT validated and licensed customs broker to file entries with CBP.

According to the E.O. under Sec. 4.  Enforcement and Penalties. 

(a)  The Secretary shall, to the maximum extent permitted by applicable law, take any action he deems necessary to bolster the enforcement of customs laws, regulations, and other mandates, including conditions necessary for participation in the CTPAT program.  These actions shall include enforcing liquidated damages claims against bonds for noncompliance; restricting in-bond utilization; increasing audits; and imposing maximum penalties for brokers who, for example, fail to conduct due diligence, repeatedly represent noncompliant clients, or fail to cooperate in a timely manner with requests for information by CBP.

(b)  The Secretary and the Attorney General shall take all appropriate action to prioritize the enforcement of Federal law relating to importations involving products produced by forced labor, and importations involving misclassification, undervaluation, and illegal transshipment, including investigations conducted pursuant to the Enforce and Protect Act (Public Law 114-125).

(c)  Within 90 days of the date of this order, the Secretary shall take steps to revise all mitigation standards consistent with the policy of this order.  These revisions shall include establishing a minimum penalty floor of not less than 50 percent of the assessed penalty, absent exceptional circumstances that materially impact national security; establishing a minimum liquidated damages floor; and eliminating mitigation for repeat offenders.

Regulations Timeline

June 3, 2026 – E.O. was announced

July 18, 2026 (45 days) – Recommendations for legislation to strengthen customs enforcement

September 1, 2026 (90 days) – Expedite and enhance the seizure and disposal of non-compliant imports. Establish various requirements, standards, and practices consistent with the policy of this order.  These measures shall include requiring periodic review and expiration of confidentiality requests, as appropriate; and publishing annual enforcement transparency reports.

November 30, 2026 (180 days)– Remove inactive IORs; confirming active IORs are compliant and creating risk-based tiers for IORs. Require all IORs to maintain “good standing” with CBP. Establish enhanced vetting procedures, including recurrent vetting, for all individuals and entities seeking to conduct activities directly related to the importation of goods, including foreign IORs, affiliates of IORs, customs brokers, custodians of bonded merchandise, and freight forwarders. 

June 3, 2027 (1 Year)  – The Secretary shall submit a report to the President on the effectiveness of the Order. 

USTR Proposes 301 Investigations on Forced Labor

The U.S. Trade Representative (USTR) has launched Section 301 investigations into 60 countries over concerns they are not effectively stopping imports made with forced labor. 

USTR has proposed additional duties:

• 10% will be appliable to countries that have a forced labor import prohibition in place, (Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan.)
• 10% for countries who have committed to one through a trade agreement (Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Indonesia, Malaysia, and Taiwan)
• 10% on countries who have imposed a partial regime preventing certain forced labor goods from entering the U.S. (the United Kingdom)
• 12.5% — for all other investigated economies

Additional 25% Section 301 Tariffs for Brazil on certain imports due to an investigation into Brazil’s trade practices. The proposed tariffs would not apply to products already subject to Section 232 duties and would exclude certain raw materials and goods. 

New Section 301 investigations on Vietnam was initiated on May 29, 2026 regarding intellectual property rights protection and enforcement practices. No additional duties have been announced yet but possible tariff actions could be a possible outcome of the investigation. 

USTR also proposes a mechanism that would allow a certain volume of apparel and textile imports from certain economies to be imported at a reduced Section 301 rate. 

There will be tariff exemptions for certain products that are listed in Annex A to this notice.

Flegenheimer will continue to monitor and provide more updates. If you are importing from the aforementioned 60 countries, you might want to consider participating in the comment process before July 6. Please read the links below for further details. 

Sources: 

Strengthening Customs Enforcement FRN Section 301 Forced Labor Ban Actionability and Proposed Action.