Volume I, No. XIII
Customs will void importer numbers over bad Form 5106 data, and the importer registry becomes an enforcement tool
From September 18, CBP says it will cancel any importer of record number whose address, phone, email or tax identifier is inaccurate or not the importer's own. The notice is the first step under Executive Order 14411, and it reaches brokers as well as importers.
“CBP will void the IOR number, rendering it invalid for any purpose, including entering imported merchandise into the United States.” That sentence, in a two-page general notice that U.S. Customs and Border Protection published in the Federal Register on August 19, carries the policy1. Beginning September 18, CBP says, any importer of record whose CBP Form 5106 contains incomplete or inaccurate information, or information that does not belong to the importer, will lose its number at once1. The form has long been treated as an administrative intake record, the place where a company gives its name, tax number and address before its first entry. CBP now treats it as a test of who the importer is, and it is placing much of the burden of that test on the customs brokers who usually file the form. The notice calls itself an initial step in carrying out Executive Order 14411, and it signals that more is coming1.
The instrument: an executive order and the importer number
The importer number rests on old statutory ground. CBP cites 19 U.S.C. 1484, which governs who may make entry, and 19 U.S.C. 4320, and its regulation at 19 CFR 24.5 sets out how an importer requests an identification number by filing Form 51061. The paperwork record adds 31 U.S.C. 7701, the federal taxpayer-identification provision, and describes the form as “the basis for establishing bond coverage, release and entry of merchandise, liquidation, and the issuance of bills and refunds”4. The required fields are short: name, an Internal Revenue Service employer identification number, Social Security number or CBP-assigned number, mailing address, physical address if different, phone and email1. Beneficial ownership and officers appear only as optional fields1.
What changes the form’s weight is Executive Order 14411, signed June 32. Its purpose section says effective customs enforcement “ensures importers of record (IORs) are correctly identified and accountable for duties owed,” and it names undervaluation and “withholding critical information about IORs” among the abuses it targets2. Section 2(e) directs the Secretary of Homeland Security, within 180 days, to update the importer registry by “removing inactive IORs; confirming active IORs are compliant with all applicable regulations and disclosures; and creating risk-based tiers”2. The August notice cites that subsection as its basis1.
The vehicle matters. The notice is a general notice, not a rule. It amends no regulation and asks for no comment; it announces how CBP will apply requirements it says already exist1. The bigger changes in the order, including minimum domestic assets or bonding for every importer, a bar on informal entry by foreign importers of record, and a “good standing” requirement, still require revised regulations, guidance or policy, and CBP says it “is currently taking steps” on them1,2.
The mechanism: what counts as accurate on Form 5106
CBP’s notice turns three fields into tests of ownership1:
- Physical address. It must be the actual location of the business or individual. It “cannot be a registered agent, customs broker, freight forwarder, P.O. box, a business service center, or an address of another person or entity.” A sole proprietor’s home address is acceptable if it is the address associated with the business.
- Email address. It must be valid and belong to the importer. A broker or other third party may not substitute its own.
- Phone number. The same rule applies: valid, and the importer’s own.
The tax identifiers are covered by the same requirement that each item “belongs directly to the IOR”1. CBP says it is “comprehensively reviewing” the Form 5106 data on file, so the review reaches importers that registered years ago as well as new filers1.
The broker’s position is set out with unusual directness. A broker filing Form 5106 must hold a power of attorney “executed directly with the IOR,” not obtained through a freight forwarder or other third party, citing 19 CFR 111.36(c)(3)1. Brokers must exercise due diligence under 19 CFR 111.29(a), and the notice says they should not transmit information they “know or should know is false or misleading, including unverified information”1. The last two words shift the standard. A broker that passes along a client’s address without checking it is, on CBP’s reading, transmitting unverified information.
The liability language extends past the number itself. CBP warns that a person certifying the form may face fines or imprisonment under 18 U.S.C. 1001 for an intentional false statement, that inaccurate data is “material to an obligation to pay money to CBP” and could bring liability under the False Claims Act, and that brokers may face penalties under 19 U.S.C. 16411.
When CBP voids a number it will send written notice to the email address most recently on file, copied to the broker that last filed an entry for the importer, stating the basis and explaining how to ask for the number to be reestablished, including what identity evidence to submit1. Requests go to a CBP mailbox with the subject line “Enforcing IOR Accuracy”1. The notice gives no time frame for reinstatement.
Who bears the cost of a voided number?
The scale is large. In 2019 CBP’s Broker Management Branch estimated about 350,000 active importers of record in any given year3. In 2024 CBP estimated 432,000 Form 5106 filings a year, at 45 minutes each4. CBP has not said how many records it considers deficient.
The direct cost falls on importers whose numbers are voided, since goods cannot be entered under a void number, and on brokers, who must now confirm data they once accepted from clients1. The importers most exposed are those that registered with a broker’s or forwarder’s contact details, or a registered-agent address, which the notice now rules out1.
The administration’s case is in the order. It says “systemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes have created opportunities for malign actors to evade Federal law,” and that reform should protect national security, promote lawful trade and ensure “the timely collection of duties”2. Susan Thomas, executive assistant commissioner of CBP’s Office of Trade, who signed the August notice, said in a June video reported by International Trade Today that “Brokers, they’re on the hook for vetting their clients more thoroughly,” and that “those who don’t will see tougher penalties and may lose their importing privileges”1,5.
Practitioners described the burden. Lenny Feldman, customs counsel to the National Customs Brokers & Forwarders Association of America, told International Trade Today the order means “an unprecedented level of scrutiny as to the right to make entry,” and said CBP had been asking for identification documents and passports to validate importers that give powers of attorney to brokers, some of which turned out to be stolen or false5. Aaron Applebaum, a Sidley Austin partner, told the same outlet that the CF 28 and CF 29 forms CBP sends to question entries had risen from about one every month or so to a few every week5. A Sidley analysis of the order concluded that “the changes will increase both the direct and indirect costs for all importers,” and that the effect would likely reach beyond the foreign importers using shell companies that the order names6.
The longer view: from broker shopping to a registry purge
The problem the notice addresses has been on CBP’s record for years. In August 2019 CBP proposed a rule, required by section 116 of the Trade Facilitation and Trade Enforcement Act of 2015, enacted February 24, 2016, that would have made brokers collect and verify a set of identity data from every importer client, including a physical address, phone, email, government photo identification and a credit report, and reverify it every year3. CBP explained then that because verification was voluntary, “an atmosphere of ‘broker shopping’ has been created,” in which an importer that refused to provide information to one broker could look for another that would not ask3. It estimated that about 5 percent of importers’ identities were not verified, or only minimally3. No final rule followed in the Federal Register.
The 2019 proposal built a duty on brokers, with a schedule, a list of documents and an economic analysis that put brokers’ undiscounted cost of verification and recordkeeping at about $23.4 million over its period of analysis3. The 2026 notice reaches a similar end by different means. It sets no new list, and it applies the existing due diligence and power-of-attorney rules with a sanction attached to the importer’s number1. The 2019 text proposed three years for brokers to verify existing clients3. The 2026 notice gives 30 days, from publication to September 181.
The order’s 180-day deadlines for revised eligibility rules, good standing and registry tiers fall at the end of November2. The notice says further announcements will come through the CBP website and the Federal Register1. Whether those rules adopt the documentary checklist proposed in 2019, or rely on enforcement of the kind announced on August 19, the record does not yet show.