CBP Expands Requirements for Foreign Importers of Record and for Customs Brokers

November 9, 2026

On November 6, 2026, U.S. Customs and Border Protection (CBP) issued an interim final rule (IFR) imposing substantially heightened requirements on foreign importers of record (IORs) and corresponding verification obligations on customs brokers. The rule implements portions of Executive Order 14411, “Strengthening Customs Enforcement,” and is primarily intended to address CBP’s difficulty identifying, monitoring, and collecting duties and penalties from foreign IORs.

The IFR is effective on, and public comments are due by, January 5, 2027.

New Distinction Between U.S. and Foreign IORs

The IFR creates a new 19 C.F.R. Part 110, which establishes regulatory definitions of U.S. and foreign IORs. It contains three principal provisions:

• Section 110.1: Definitions
• Section 110.2: U.S. importer of record
• Section 110.3: Foreign importer of record

The new regulations provide a detailed substantive test for distinguishing a U.S. IOR from a foreign IOR.

An individual qualifies as a U.S. IOR if the person is a U.S. citizen or lawful permanent resident. An entity qualifies as a U.S. IOR if it:

1. Is organized under U.S. law;
2. Is located in the United States; and
3. Satisfies one of the following two additional tests:
   1. At least 51% of its beneficial owners must at all times be U.S. citizens or lawful permanent residents and have control of the entity; or
   2. The entity must directly own a “significant amount” of unencumbered U.S. real property at all times.

An IOR that does not satisfy these requirements is deemed a foreign IOR. Critically, simply incorporating a subsidiary in the United States will not qualify that company as a U.S. IOR under the new definitions.

In the new Section 110.2(b), CBP reserves the right to verify whether specific individuals or entities qualify as U.S. IORs. CBP stresses that the facts supporting an entity’s qualification as a U.S. IOR vary depending on the circumstances in each instance. Relevant factors include (1) where an entity has its principal place of business; (2) the location and intensity of its physical operations, employees, and revenue-generation activities; and (3) the amount of its physical domestic assets, real estate, profitability, and capitalization. CBP’s Center of Excellence and Expertise Directors will have authority over verifications. Records related to verification must be retained for five years from the date verification is conducted.

New Beneficial-Ownership Rules Are Significant

The new U.S.-IOR test places significant focus on determining who ultimately owns and controls an importing entity, rather than simply looking to where that entity is incorporated. Under Section 110.1, CBP defines a “beneficial owner” as a natural person who directly or indirectly either:

• Exercises substantial control over the importing entity; or
• Owns or controls at least 25% of the ownership interests.

Every entity must have at least one beneficial owner for purposes of the rule. The “beneficial owner” definition includes circumstances where multiple layers of entity ownership exist between the natural person and the entity, such as a corporation that is owned by another corporation that is owned by a natural person, in which case the natural person is the beneficial owner despite the layers of entity ownership. An entity may have multiple beneficial owners, and there is no maximum number of beneficial owners.

Accordingly, a U.S.-incorporated subsidiary ultimately controlled by foreign natural persons could fail CBP’s new U.S.-IOR test unless it satisfies the alternative U.S.-real-property requirement.

The new regulations also provide for categories of persons who cannot be considered beneficial owners but might appear in an ownership or control chain, including, but not limited to, certain children of owners, agents, ordinary employees, creditors, and others deemed to not have sufficient beneficial ownership interests.

Foreign IORs and Customs Trade Partnership Against Terrorism (CTPAT) Involvement

CBP is adding two new sections to Subpart B of Part 141 (Section 141.21 and Section 141.22), pertaining to the right to make entry and declarations on entry. Pursuant to Section 141.21(a), a foreign IOR may no longer freely make consumption entries unless specific requirements are met. Rather, a foreign IOR must either use a CTPAT-validated customs broker or be CTPAT validated itself. CTPAT is a CBP voluntary trade program that focuses on security implementation throughout supply chains. CTPAT member companies and partners that undertake these supply chain protections receive facilitated processing by CBP.

Beginning January 5, 2027:

• A CTPAT-validated foreign IOR may continue entering merchandise itself. If it uses a broker, that broker does not have to be CTPAT validated.
• A foreign IOR that is not CTPAT validated must use a licensed, CTPAT-validated customs broker to make entry.
• If the foreign party is not the owner or purchaser of the merchandise, the designated CTPAT-validated broker must act as the IOR for the entry.

These requirements apply to both formal consumption entries and informal consumption entries. CBP is not presently adopting the stricter option of categorically prohibiting foreign IORs from making informal entries, but expressly states that it will monitor those entries and could adopt such a prohibition later.

Under CTPAT’s current rules and structure, the only foreign IORs eligible for CTPAT validation are Canadian IORs. Thus, the new rules will require many foreign IORs to use a CTPAT-validated broker.

New Major Obligations for Customs Brokers

The rule does not merely regulate foreign IORs. It places significant new compliance obligations on brokers serving companies that claim to be U.S. IORs.

Before declaring a client to be a U.S. IOR, a broker must request and review records establishing that the client satisfies the criteria in Section 110.2. Relevant documentation can include:

• Proof of citizenship or permanent residency;
• Corporate charters;
• Financial statements and financial records;
• Purchase receipts; and
• Documents of title.

Records associated with this verification generally must be retained for five years from the verification date.

CBP’s updated Forms 3461 and 7501 will also include new identification requirements, including a declaration as to whether the IOR qualifies as a U.S. IOR. These updated forms and their electronic equivalents become mandatory on January 5, 2027.

Rule Will Affect a Substantial Portion of Foreign Importers

Based on a review of entries made between October 1, 2020 and February 6, 2026, CBP estimates that foreign IORs represent approximately 16% of IORs making entry summaries. Only 0.4% of foreign IORs are CTPAT validated, although 68% already use CTPAT-validated brokers.

Approximately 32% of foreign IORs will have to change brokers or become CTPAT validated to continue importing under the new regime. Those companies account for approximately 2.6% of all entry summaries.

The broker market will also shift significantly. CBP’s review of past entries indicates that only 21% of active brokers are currently CTPAT validated. CBP estimates that CTPAT-validated brokers could experience approximately a 9.3% increase in clients and a 3.1% increase in entries as a result of the new requirements, while non-CTPAT brokers will lose foreign-IOR business unless they obtain validation.

Wiley has robust Customs Law and Compliance and International Trade practices with extensive experience helping clients navigate CBP’s importer of record requirements and broader customs and trade issues. For more information about CBP’s interim final rule, please contact one of the listed attorneys.