Beginning January 5, 2027, an interim final rule will enter into effect that dramatically changes the requirements that importers need to meet to be considered a US importer of record (IOR). Previously, the only requirement was that you be a party to the transaction, as the buyer or the seller. Now there are additional thresholds to pass in order to be defined as the importer of record with the obligations that entails.

This final rule brings a clear separation between US Resident and Non-Resident importers, including how each of those parties is defined, strictly delineating their requirements for access to the commerce of the United States. 

ALL importers who do not meet the requirements will be designated as a Non-Resident importer with all the rules and regulations that designation entails.

Importantly, a history of previous importation does not grandfather you into qualification. Even importers currently importing into the US must meet these new requirements. 

Paraphrased from the official Federal Register announcement, to be considered a US Importer of Record, an entity must be:

US Importer of Record (US IOR) Requirements:

• An individual who is a United States citizen or lawful permanent resident, or an entity organized under the laws of the United States and located in the United States, or
• Must maintain at all times at least 51% of beneficial owners who are US citizens or lawful permanent residents and have control of the entity, OR direct ownership of a significant amount of unencumbered real property in the United States. Examples include: cash deposited in a US bank account, US Treasury bonds, inventory, machinery, equipment, or unencumbered real property. Accounts receivable are excluded.

An importer that does not meet these requirements is considered a ‘foreign importer' and must adhere to the regulations required by that designation. 

Foreign Importer of Record (Foreign IOR) Requirements:

• A foreign IOR may only enter merchandise for consumption if the foreign IOR itself is a CTPAT validated participant, OR if it designates a licensed customs broker who is a CTPAT validated participant to make entry or act as the importer of record on its behalf.
• There may be additional restrictions placed on the Foreign Importer of Record, such as the types of entries they may be able to file in the future as well as the type of bonding that will be available to them. 

Why a US Entity May Not Meet the Threshold:

• Lack of Physical Presence: Simply being incorporated or organized under US laws and listing a US address (such as a mail drop or agent address) is insufficient if the business entity functions with no physical presence or assets beyond a mailing address. 
• Insufficient Business Transactions: CBP will verify whether the entity has a physical presence in the United States where substantial business transactions occur, such as paying employees, generating revenue, or operating retail locations. 
• Insufficient Physical Domestic Assets: The entity must also maintain sufficient unencumbered physical domestic assets located in the US, such as cash deposited in a US bank account, US Treasury bonds, inventory, machinery, equipment, or unencumbered real property. 
• Financial Viability and Capitalization: The entity's gross sales must generally exceed its cost of goods sold; it must be structured to generate its own profit and be sufficiently capitalized.  This means the US company must be financially independent and profitably self-sufficient. 
• Foreign Instrumentality Status: Entities that serve merely as instrumentalities of a foreign manufacturer without a substantial independent presence in the United States do not qualify.

What if you do not meet the requirements to be defined as a US Importer?

If you do not meet the requirements to be considered a Domestic US IOR, then you are considered a Foreign US IOR, and the requirements for importing are more stringent.

This is an evolving story, and we are watching it closely as it develops. We will report any new information as it becomes available. 

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PCB has been CTPAT validated since 2010 and has a long and successful relationship with the program. If you do not qualify to be categorized as a US Importer and will be importing as a Foreign Importer, we can continue to provide service.