Written by Laurie Arnold, NCBFAA Secretary
The June 3 Executive Order (EO) 14411 established a new framework intended to strengthen supply chain security, improve importer accountability, and enhance U.S. Customs and Border Protection’s (CBP) ability to identify and address non-compliant trade activity. A central component of the EO is the increased responsibility assigned to Customs Trade Partnership Against Terrorism (CTPAT) validated customs brokers when representing foreign Importers of Record (IORs). In the months ahead, customs brokers, importers, CBP, and industry organizations such the American Association of Exporters and Importers (AAEI) and the National Customs Brokers and Forwarders Association of America (NCBFAA) will need to work collaboratively to ensure the new framework enhances supply chain security and importer accountability while remaining practical and achievable for legitimate trade participants.
The EO represents a significant shift in the customs brokerage landscape and will have far-reaching implications for CTPAT validated customs brokers (CVCBs) and foreign Importers of Record (FOIRs). The challenge for the industry today is that while the EO outlines the government’s intentions, many of the specific implementation details, documentation requirements, and compliance expectations are still under development. As a result, customs brokers and foreign importers should begin preparing now, while recognizing that additional CBP guidance is needed.
FIORs will be required to obtain validation through the CTPAT program or utilize a licensed CVCB for customs entry filing activities. This requirement is intended to ensure that foreign importers are subject to a level of scrutiny and accountability comparable to U.S.-based importers.
One of the most significant changes introduced by the EO is the requirement for CVCBs to conduct enhanced due diligence on foreign importer clients. CBP has indicated that customs brokers will be expected to perform a comprehensive review of foreign IORs before conducting customs business on their behalf. These expectations represent a substantial expansion of current importer onboarding procedures and may require customs brokers to implement more formal client qualification and risk assessment processes. Customs brokers will be looking for additional documentation from the FIOR, such as articles of incorporation, business registrations, tax identification, and evidence of legal authority to transact business. The FIOR will need to provide full ownership and corporate structure information, along with financial and details of previous trade activity, with documentation indicating how the FIOR reached HTS, valuation, and origin determinations.
CBP also introduced the concept that importers must remain in “good standing” with the agency. If a FIOR loses its “good standing,” it may be prohibited from importing goods into the U.S. or from appointing a customs broker to act on its behalf. CBP currently has not fully defined what determines “good standing.”
The EO also establishes significant consequences for customs brokers which fail to meet enhanced due diligence requirements. Customs brokers which do not adequately perform the required vetting and compliance reviews may be subject to penalties, increased regulatory scrutiny, and even removal of CTPAT validation status.
Despite the additional compliance burden, the EO establishes a significant market opportunity for CVCBs. As FIORs increasingly require access to CVCB services to conduct imports into the U.S., customs brokers that have already achieved CTPAT validation will be uniquely positioned to support those clients. CTPAT validation will likely become an important differentiator, demonstrating a customs broker’s commitment to security, compliance, and regulatory excellence.
The new framework will require greater transparency, stronger due diligence, and enhanced accountability throughout the import process. It is important to note that CBP has not yet formally identified the complete documentation package that will be required. Organizations that proactively develop enhanced onboarding procedures, robust due diligence programs, and comprehensive documentation practices will be better positioned for a smooth transition as CBP finalizes implementation requirements.
While EO 14411 provides a policy framework, many implementation questions remain unanswered. The trade community continues to seek clarification of the EO requirements from CBP. Until formal regulations and guidance are issued, customs brokers and importers should recognize that compliance obligations may evolve as CBP develops the implementation framework.
The National Customs Brokers & Forwarders Association of America (NCBFAA) has been actively working with CBP and other government stakeholders to help shape the implementation of EO 14411. Through formal comment letters, industry listening sessions, and ongoing discussions with CBP, the association has sought clarification on several critical issues, including the definition of importer “good standing,” the scope of customs broker due-diligence obligations, the operation of the proposed Importer of Record (IOR) Registry, and the practical implementation of foreign importer vetting requirements. NCBFAA has emphasized the need for clear, achievable compliance standards and has advocated for technology solutions and government-supported verification processes that allow customs brokers to fulfill their responsibilities without assuming functions traditionally reserved for law enforcement or regulatory agencies. As additional guidance is issued, NCBFAA is expected to continue serving as a key liaison between CBP and the trade community, helping customs brokers and importers understand, and prepare for the evolving requirements of EO 14411.