August Newsletter | New CBP Enforcement Raises Stakes For Importers

TOP NEWS: 

CBP launches new webpage tracking its Strengthening Customs Enforcement Executive Order

CBP has launched a dedicated webpage outlining its implementation of the President's Strengthening Customs Enforcement Executive Order, providing importers with greater visibility into the significant compliance changes expected over the coming months. The webpage serves as a central resource for updates as CBP develops new regulations, guidance, and enforcement initiatives directed by the Executive Order.

The Executive Order represents one of the most comprehensive efforts in years to strengthen customs enforcement and combat duty evasion. Among its key objectives are enhanced oversight of Importers of Record (IORs), increased customs bond requirements, expanded importer disclosure obligations, stricter verification of supply chain information, and stronger enforcement against misclassification, undervaluation, forced labor violations, and illegal transshipment. The Order also directs CBP to increase audits, strengthen importer vetting procedures, and impose greater accountability on customs brokers and other parties involved in the import process.

While many of these requirements will be implemented through future regulations over the next several months, importers should begin evaluating their compliance programs now. Accurate tariff classification, proper customs valuation, complete country of origin documentation, adequate bond coverage, and well-documented supply chain records will become increasingly important as CBP expands its enforcement efforts.

For companies engaged in international trade, the message is clear: customs compliance is becoming a higher enforcement priority. Importers that proactively review their import processes and address potential compliance gaps today will be better positioned to navigate the evolving regulatory environment and reduce the risk of audits, penalties, and shipment delays as these new initiatives take effect.

DUTY DRAWBACK: INCREASED SCRUTINY

Drawback claims face closer CBP scrutiny under new enforcement order

While much of the attention surrounding the Strengthening Customs Enforcement Executive Order has focused on imports, companies that participate in a duty drawback program should also take notice.

Duty drawback claims are only as strong as the import and export records that support them. As CBP increases its focus on importer accountability, customs valuation, tariff classification, country of origin, and supply chain documentation, the quality and accuracy of the underlying import data used in drawback claims will receive greater scrutiny.

In recent years, CBP has already begun applying more rigorous reviews to drawback claims, requesting additional documentation and placing greater emphasis on validating import information before refunds are issued. The Executive Order reinforces this direction by making customs compliance and enforcement a higher agency priority. Importers should expect increased audits, more detailed requests for supporting documentation, and closer examination of import records used to support drawback claims.

For drawback claimants, this is an ideal time to review internal processes. Import entry summaries should be reconciled against broker reports and ACE data, classifications and values should be verified, and documentation supporting substitutions, exports, and manufacturing activities should be complete and readily available. Addressing data issues before claims are filed can significantly reduce processing delays and minimize the risk of claim reductions or denials.

As duty drawback continues to provide substantial opportunities for recovering duties, taxes, and fees, maintaining accurate import records has never been more important. A proactive review of your import compliance program today can help ensure your drawback claims withstand increased CBP scrutiny and maximize the refunds to which your company is entitled.

SECTION 232 PHARMACEUTICAL DUTIES

New Section 232 duties on patented pharmaceuticals took effect July 31st

U.S. Customs and Border Protection (CBP) has issued implementation guidance for the Section 232 duties on certain patented pharmaceuticals and pharmaceutical ingredients, effective July 31, 2026. The guidance provides entry filing instructions, identifies the applicable HTSUS provisions, and outlines how importers and customs brokers should report covered merchandise subject to the new national security tariffs. The Section 232 measures apply to specified patented pharmaceutical products and associated active pharmaceutical ingredients (APIs), while generic pharmaceuticals remain excluded at this time.



Importers of pharmaceutical products should review the guidance carefully to ensure products are correctly classified and that the appropriate Chapter 99 tariff provisions are declared at entry. As with other recent trade remedy actions, accurate classification, documentation, and entry reporting will be critical to avoid delays, additional duties, or potential compliance issues.