CBP tightens rules for foreign importers of record from Jan 5

The news

From Jan 5, US Customs and Border Protection will accept entries from foreign importers of record only if they are CTPAT-validated or use a CTPAT-validated broker. CTPAT is the agency's trade security program. Comments on the interim final rule are due the same day it takes effect.

About a third of foreign importers, or 63,577 in all, are neither validated nor using a validated broker, according to CBP data. They imported $293 billion worth of goods from October 2020 to February 2026.
Nearly 1 million US importers will also have to prove to their brokers that they qualify as US importers.

Why it matters: Outside Canada, foreign sellers shipping on delivered duty paid (DDP) terms can remain the importer of record only if they use a CTPAT-validated broker.

The details

Foreign importers can meet the requirement by joining CTPAT or using a validated broker, but only Canadian importers are currently eligible to join. Other foreign importers that remain the importer of record must file through one of the 643 CTPAT-validated brokers active since 2020.

Sellers shipping on DDP terms are the importer of record. Switching to terms such as delivered at place (DAP) makes a qualifying US buyer the importer, Flexport notes.
CBP expects the rule could increase broker fees as validated brokers pass on the costs of stricter client checks.
The broker requirement also covers informal entries. CBP may eventually bar foreign importers from using informal entry altogether, potentially affecting about 9% of their ET11 entries and 23% of their value.

US importers also face new paperwork, as every entry must declare whether the importer qualifies as a US importer. A company must be organized and located in the US and be at least 51% owned and controlled by US citizens or permanent residents. It can also qualify by directly owning significant unencumbered US real estate.

The rule traces ownership through layers of companies to the individuals behind them, meaning some US subsidiaries of foreign companies will count as foreign importers.
Brokers must review client records, including corporate charters and financial statements, before declaring a client a US importer. They must retain the documents for five years.
CBP estimates the average broker has about 323 US importer clients to check.
An inaccurate declaration can lead CBP to require payment before releasing goods and revoke immediate delivery privileges.

Two-thirds of brokers that filed entries for foreign importers since 2020 are not CTPAT members, putting much of that business at risk. Of 2,051 brokers, 622 are CTPAT-validated, 28 are certified but not validated, and 1,401 are outside the program.

CBP estimates brokers outside CTPAT will lose 12.5% of their clients overall, while validated brokers will gain 9.3%.
About 50 brokers handle 72% of entries for foreign importers. CBP says they will need to reduce their exposure, find new clients or obtain validation.
Broker penalties can now reach the domestic value of the goods, well above the previous $30,000 cap.
Brokers can request an extension by Jan 5 to complete client checks, with a deadline of May 6, 2027. This does not delay the CTPAT requirement for foreign importers.

Worth noting

CBP says it recovers far less revenue from foreign importers when they underpay duties. Its audits identified $1.16 billion in lost revenue from foreign importers between January 2020 and August 2026. CBP recovered 3.1% of that amount, compared with 15.2% from US importers. Foreign importers outside CTPAT also have $1.01 billion in outstanding bills.