On June 3, the White House issued an executive order intended to address an intractable problem with customs compliance and customs enforcement: fraud by foreign importers and US-based shell companies operated by foreign companies. Government efforts to collect unpaid duties and tariffs from those foreign companies are often frustrated by the “revenue rule,” a principle of international law prohibiting the use of one country’s court system to enforce another country’s attempts to collect revenues, and the general difficulty of collecting judgments from foreign entities. 

The new Executive Order, Strengthening Customs Enforcement (https://www.whitehouse.gov/presidential-actions/2026/06/strengthening-customs-enforcement/), contains a number of provisions relating to foreign importers and foreign-owned companies:

It requires importers to report to CBP and maintain a yet-to-be-determined level of domestic assets, bonding, or both; 
It requires importers to provide information about ownership, business affiliation, domestic assets, and expected import volumes; 
It prohibits foreign importers from utilizing informal entry procedures, and instead requires them to enter goods formally. 

These measures should bolster both customs compliance by foreign entities and customs enforcement against those entities.

The domestic-asset and bonding provisions will ensure a larger pool of assets that the government can recover if it obtains a judgment against a foreign entity. It likely will also deter some customs fraud by raising the cost if the fraud is detected. 

The increased disclosure requirements may help the government address the problem of foreign entities setting up U.S.-based shell companies as importers, then abandoning them and setting up a replacement company if CBP questions the shell company’s payment of duties. If CBP has greater information about the ownership of those companies, it may be able to close the U.S. marketplace to affiliated companies who refuse to play by the rules. 

The prohibition on foreign importers’ use of informal entry will prevent companies from circumventing bonding requirements by focusing on small shipments. 

None of these measures will solve the problem of customs fraud by foreign companies, but they are a step in the right direction. 

This blog is a part of TAF Coalition’s wider efforts to promote education about trade enforcement.