New customs rule tightens requirements for importers
HIGH POINT — Furniture importers and their customs brokers face new requirements starting Jan. 5, 2027, that could force changes to how overseas merchandise enters the United States, according to an advisory from trade law firm Mowry & Grimson.
The U.S. Customs and Border Protection interim final rule establishes separate requirements for U.S. and foreign importers of record, with ownership and property holdings helping determine which category a business falls into.
It follows President Donald Trump’s June executive order calling for stronger customs enforcement.
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Mowry & Grimson warned that the changes could substantially restrict foreign importers’ ability to bring goods into the country. “These changes are significant, and we expect a drastic reduction in the practical ability of foreign IORs to continue to import into the United States,” the firm said.
Under the rule, a foreign importer of record must either be validated through the Customs Trade Partnership Against Terrorism, known as CTPAT, or designate a validated customs broker to make entry or serve as the importer of record. If the foreign importer is neither the owner nor purchaser of the merchandise, a validated broker must serve as the importer of record.
The firm said only 0.4% of foreign importers of record are CTPAT validated, underscoring the potential scope of the adjustment.
The distinction between domestic and foreign importers extends beyond where a company is incorporated.
An individual qualifies as a U.S. importer of record if the person is a U.S. citizen or lawful permanent resident. A business must be organized under U.S. law, located in the United States and meet an additional ownership or property requirement.
That means maintaining at least 51% beneficial ownership by U.S. citizens or lawful permanent residents who control the company, or directly owning a significant amount of U.S. real estate free of encumbrances. The firm noted that “significant” is not defined.
Importers that do not meet the domestic criteria are classified as foreign.
Qualifying U.S. importers can continue entering merchandise without CTPAT validation. However, they must submit a declaration confirming their status when filing an entry and entry summary.
Brokers may submit those declarations for clients but must first verify that the importer meets the U.S. qualification requirements.
The rule also increases brokers’ responsibilities and potential financial exposure. Brokers handling entries for foreign importers without CTPAT validation, or serving as their importers of record, must themselves be validated.
Potential broker penalties will increase from the previous $30,000 cap to as much as the domestic value of the imported merchandise, according to the advisory.
All customs brokers are expected to comply fully by May 6, 2027. Comments on the rule are due Jan. 5, 2027, the same day it takes effect.
Mowry & Grimson urged companies to assess their import transaction structures before implementation to avoid disruptions in trade flows.
