U.S. Customs and Border Protection (CBP) has issued an interim final rule that changes how foreign importers of record (IORs) can bring goods into the United States. It takes effect January 5, 2027. Here is what it requires and what to do before then.
What the rule requires
A foreign IOR can still import into the U.S., but only in one of two ways:
- The foreign IOR is Customs Trade Partnership Against Terrorism (CTPAT validated). It can then file itself or use any licensed customs broker.
- The foreign IOR is not validated. It must use a customs broker that is CTPAT validated.
If the foreign party on the broker's power of attorney is not the owner or purchaser of the goods, the validated broker must act as the importer of record.
CTPAT has two stages. A company is certified when CBP approves its application. It becomes validated when CBP then checks its facilities and procedures, usually on site. Only validation counts under this rule. For most foreign importers, using a validated broker is the practical path.
Who counts as a U.S. importer of record
For the first time, CBP defines a U.S. IOR. You qualify if you are:
- a U.S. citizen or lawful permanent resident, or
- an entity organized under U.S. law and located in the U.S. that, at all times, either has at least 51% of its beneficial owners who are U.S. citizens or permanent residents and have control, or directly owns a significant amount of unencumbered U.S. real property.
A beneficial owner is a person who owns or controls at least 25% of the entity, or who exercises substantial control over it (for example a CEO). CBP looks through layers of holding companies to the people at the top.
CBP can verify your status by looking at factors such as your principal place of business, U.S. employees and revenue, U.S. assets (cash in a U.S. bank, Treasury bonds, and real estate, inventory or equipment located in the U.S.), whether sales exceed cost of goods, and capitalization.
Anyone who does not meet the definition is a foreign IOR. That can include U.S. subsidiaries of foreign parents.
What changes on every entry
Each entry will carry a yes/no declaration that the IOR is a U.S. IOR, plus a box when a broker acts as IOR for a client. Before declaring a client a U.S. IOR, the broker must review records that prove it, such as corporate charters, ownership documents or financial statements, and keep them for five years. A broker that is not validated must stop filing for any client that turns out to be foreign.
An inaccurate declaration can lead CBP to require payment before release and to suspend immediate delivery privileges. Brokers can also now face penalties under 19 U.S.C. 1592 up to the domestic value of the goods, well beyond the previous $30,000 cap.
Brokers can ask CBP for more time to complete client verification. If approved, they have until May 6, 2027. That extension does not delay the CTPAT requirement for foreign IORs, which applies from January 5.
Informal entries are not banned for now. Foreign IORs can still file them through a validated party, but CBP says it may prohibit them later. There is rulemaking on this exact question of low value shipments, with comments accepted through December 7, 2026 “Low-Value Shipments 91 FR 64532”.
Why CBP is doing this
Non-validated foreign IORs owe CBP $1.01 billion in open bills over the past 6 years, and CBP recovers only 3.1% of what audits find they underpaid, compared with 15.2% for U.S. importers. Only 0.4% of foreign IORs are CTPAT validated today, but 68% already use a validated broker. The rule mainly affects the rest: about 5.4% of all importers and 2.6% of entries.
What to do now, especially if you ship DDP
- Check your status. Confirm whether your importing entity meets the U.S. IOR definition, with the ownership or real-property records to prove it.
- If you are a foreign IOR, use a validated broker. Ask your broker directly whether it is CTPAT validated, not just certified. Flexport Customs is CTPAT validated.
- Consider moving IOR to your U.S. buyer. If your buyer meets the U.S. IOR definition, shifting terms from DDP to DAP (or similar) makes the buyer the importer, avoiding the foreign-IOR rules altogether.
Note that a validated broker must act as IOR when the foreign party doesn't own or buy the goods. Flexport files entries as a validated broker but does not act as importer of record for clients, because the IOR carries the full legal and financial liability.
CBP is accepting comments until January 5, 2027 under docket USCBP-2026-1387. To work out how the rule applies to your setup, talk to your Flexport team.
Source: Heightened Requirements for Foreign Importers of Record, 91 FR 69977
