CBP Tightens Rules for Foreign Importers of Record

Published Nov. 5, 2026

Key Points

• A new 19 CFR Part 110 defines a U.S. IOR. Any IOR that doesn’t meet the definition is a foreign IOR.
• U.S. IORs must declare their status at entry and entry summary on CBP Forms 3461 and 7501.
• Before making that declaration, a broker must verify the client’s status and keep the records for five years.
• Brokers need a power of attorney from the principal, even when acting as the IOR.
• All brokers are expected to be fully compliant by May 6, 2027.
• Submit comments through Regulations.gov under docket USCBP-2026-1387.

T​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​he U.S. Customs and Border Protection (CBP) has issued an interim final rule introducing new entry requirements for foreign importers of record (IORs). Foreign IORs must be CTPAT validated or use a CTPAT-validated customs broker, and brokers must now verify whether their clients qualify as U.S. IORs. All customs brokers are expected to be fully compliant by May 6, 2027.

As of this writing, the rule isn’t in the Federal Register yet, but it’s scheduled to be published on Nov. 6. In the meantime, you may already read the unpublished version. Comments on the rule must be received within 60 days of its publication.

Note that this rule is separate from CBP’s Form 5106 accuracy enforcement and the possible IOR number voiding on Nov. 18, although it also addresses Form 5106 requirements. For guidance on reviewing CBP records and maintaining accurate importer information, watch GHY’s webinar on Form 5106 and IOR status.

What Changes for Foreign IORs

Under new 19 CFR 141.21, a foreign IOR can enter goods for consumption only as follows:

• CTPAT validated foreign IOR: can make entry itself or hire any licensed customs broker, validated or not.
• Foreign IOR that isn’t CTPAT validated: must designate a licensed customs broker who is CTPAT validated to make entry or act as the IOR.

If the principal on the broker’s power of attorney isn’t the owner or purchaser of the goods, the CTPAT validated broker must act as the IOR.

This applies to all formal entries and informal entries filed on CBP Form 3461 or 7501 (entry types 11, 12 and 13). A broker’s license alone is no longer enough to file for a foreign IOR that isn’t CTPAT validated, and using a CTPAT validated broker doesn’t give the importer CTPAT benefits.

CBP’s data shows 0.4% of foreign IORs are CTPAT validated and about 68% already use a CTPAT validated broker. The other 32% will need to switch brokers or become CTPAT validated. Only Canadian IORs are currently eligible for CTPAT validation.

Who Qualifies as a U.S. IOR

Under new 19 CFR 110.2, a U.S. IOR is either:

• An individual who is a U.S. citizen or lawful permanent resident, or
• An entity that is located in the U.S., organized under U.S. law, and meets one of these at all times:
  • At least 51% of its beneficial owners are U.S. citizens or lawful permanent residents and have control of the entity.
  • It directly owns a significant amount of unencumbered real property in the U.S.

Any IOR that doesn’t meet these criteria is a foreign IOR.

Beneficial Owner

A beneficial owner is a natural person who either exercises substantial control over the entity or owns or controls at least 25% of it. Layers of corporate ownership don’t change this. The definition excludes nominees, intermediaries, custodians and agents, certain employees, creditors, people whose only interest is through inheritance, and minor children when a parent or guardian qualifies.

How CBP Verifies Status

CBP can request records such as proof of citizenship or residency, corporate charters, financial statements, purchase receipts and documents of title. For entities, it may also consider whether the entity has:

• Its principal place of business in the U.S.
• A physical presence with substantial business, such as paying employees, generating revenue or operating retail locations
• Enough unencumbered physical domestic assets (cash in a U.S. bank account, U.S. Treasury bonds, and U.S.-located real property, inventory, machinery and equipment; receivables are excluded)
• Gross sales that generally exceed cost of goods sold, and sufficient capitalization

A Center of Excellence and Expertise (CEE) Director decides whether an IOR qualifies.

U.S. IOR Declaration on Entries

U.S. IORs don’t need CTPAT validation and can still use a broker who isn’t CTPAT validated. Under new 19 CFR 141.22:

• At entry and entry summary, the IOR or its broker must declare U.S. IOR status using the new checkbox on CBP Forms 3461 and 7501 (a Yes/No field in the electronic versions). Foreign IORs leave it blank.
• Before declaring, review § 110.2 and the definitions of beneficial owner and physical domestic assets.
• If a broker who isn’t CTPAT validated acts as the IOR for a client, the broker must identify the principal on the power of attorney, declare that the principal meets the U.S. IOR criteria, and provide the principal’s IOR number or other Form 5106 identifier. The principal must have a Form 5106 on file.

The updated forms are required starting on the effective date.

New Responsibilities for Customs Brokers

• Verify before declaring: under new 19 CFR 111.29(a)(2), a broker must request and review client records showing the client meets the U.S. IOR criteria.
• Keep records for five years from the date of the verification.
• Hold a power of attorney: revised 19 CFR 141.46 requires one even when the broker acts as the IOR.
• Stop filing if needed: CBP explains that a broker who isn’t CTPAT validated must stop filing entries for a client its review shows isn’t a U.S. IOR.

Delayed Compliance

Brokers can ask CBP to delay compliance with the verification requirement. Requests must explain why the delay is needed and be submitted within 60 days of publication. Brokers aren’t eligible if they are subject to removal from CTPAT, revocation of Form 5106 filing privileges, a federal suspension or debarment listed on SAM.gov, entry filer code suspension, or license revocation proceedings. Approved brokers must show a good-faith effort to comply. Details are on CBP’s delayed compliance page.

Penalties and Enforcement

If an IOR, or a broker acting as the IOR, inaccurately declares U.S. IOR status, CBP can require live entry and discontinue immediate delivery privileges (new §§ 142.13(a)(5) and 142.25(a)(5)). Both can apply to formal and informal entries.

CBP has also revised its penalty guidelines for brokers. Previously, it generally used 19 U.S.C. 1641 (maximum $30,000) and used 19 U.S.C. 1592 only for fraud or cases where the broker benefited. Now, a broker who commits a 1592 violation may face a penalty under that section or any other available action, including under 1641. The maximum 1592 penalty can be the domestic value of the merchandise.

Informal Entries Aren’t Banned Yet

Executive Order 14411 directs CBP to prohibit foreign IORs from filing informal entries, but this interim final rule does not impose a blanket prohibition. Foreign IORs can still file informal entries if they are CTPAT-validated or use a CTPAT-validated, licensed customs broker.

CBP will monitor these entries and may later prohibit foreign IORs, and brokers acting for them, from filing informal entries for consumption. It’s asking for comments on that option.

How to Submit Comments

Submit comments through Regulations.gov under docket USCBP-2026-1387. Include the agency name and docket number. CBP posts all comments without change, including personal information. CBP asks commenters to reference the specific part of the rule, explain any recommended change, and include supporting data or authority.

How GHY Can Help?

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