Breaking Down Trump’s Executive Order on Foreign Importers of Record

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Marcus Eeman

Hello. Good morning. Welcome to today's webinar, breaking down Trump's executive order on foreign importers of record, which you will soon see is not just for foreign importers of record, but for many US companies as well. My name is Marcus Eeman. I'm a director of customs here at Flexport. And, today, we do have quite a lot of content to cover. It's pretty dense. It's a little bit shorter than our usual format, and I'm gonna do a lot more talking maybe than I than I am because there's a lot in this order here. So, I'll try to still make it engaging, and easy to digest, but we'll have to get through a lot here. If you haven't been to our webinars before, just a couple of housekeeping and orientation items. On your screen, you'll see a sidebar on the right of the main stage where you can submit questions. At At the end of this presentation, we'll host a short q and a and answer a few audience questions. I may not get to as many as we normally do, just given the the time constraints here, but I I will try to answer at least a couple. In that same sidebar, you'll see a tab labeled documents. This is where you can download a copy of today's slides and find other helpful resources like our tariff simulator and tariff refund calculator. With a brief legal note here, this is, all this information is provided at this current time. So it's based on what is currently out there. This is obviously a very rapidly moving, policy proposal, executive order. And so the advice that I talk about in this webinar may not be specific to your business requirements. Furthermore, because there are some vagaries in this executive order, I will have a couple slides where I am gonna speculate on what regulations may come forth from this executive order. But I just gotta emphasize again, these are speculative. These are my opinion, not necessarily the opinion of Flexport, not necessarily advice, not necessarily what will actually happen, just my best guess based on what I know and how the orders are written. Okay. As mentioned, my name is Marcus Eeman. I'm a customs director here at Flexport, and I am flying solo today. Our agenda is really just gonna go over the big pieces, the what, the when, the how, and maybe a little bit on how to prepare, whether or not you're a US importer, US consignee of DDP shipments, or if you are a foreign importer of record in your own right. So we'll start with the what. And if you read the executive order, there's quite a bit there. This is a pretty full, order. There's quite a lot, of additional details going on here. And I thought I'd start with just kind of a a sort of setting the stage here. And so we look at the map. There are three countries in the world that allow foreign importers of record the same way that The United States does, The US being one, Canada being another, Australia being the third. And if we go twelve months from now, it still may be the case that all three of these countries are still allowing foreign importers of record. But there's gonna be some pretty big asterisks, I think, on The US side. It's going to look very different than it does today. This isn't the end of foreign importers of record, but it is definitely intended to, change how they operate, to change how they're established, how they're set up, and how customs gets information, about these, foreign importer of record companies. Okay. The what. There are new rules that apply, it seems, virtually to every imported record. The imported record will need to have, something called tangible domestic assets or sufficient bonding to make sure they protect the revenue for, CBP going forward, including increasing that minimum bond coverage required for importers of record. Today, that minimum is set as a $50,000 bond, which covers $500,000 worth of duty activity. If you've been importing more than a couple years, you'll know that after last year, you may have gotten the bond insufficiency notice in May and June and July, of last year, part of that that large wave following Liberation Day. But this is something that looks to be pretty clear from the order. An importers of record will also have to provide identification information, including anticipated import volumes, ownership, ownership beneficial ownership structures, affiliates, you know, if you have affiliate companies or or or subsidiary companies, domestic asset disclosures, and, quote, any other data that CBP deems necessary in a very vague and ominous way. We're gonna have to see exactly what this means, but right now, you know, the brokers have been doing customs brokers have been doing some of this information gathering, embedding on their own, but to a very small degree. This seems to be much more, invasive and it going to customs directly, not going through, a customs broker. CBP will create a good standing list, which they specifically mention what is not good standing, so a history of being connected with fentanyl imports, pill presses, any of the drug paraphernalia or forced labor imports. And they do clarify that if you're not on this if you're not in good standing, you will not be allowed to import. And this is true for both foreign importers of record as well as US based importers of record. Foreign importers of record will also not be able to file the type 11 informal entries. A lot of de minimis volume went from the type 86 or manifest clearances toward these type 11 informal entries, after de minimis was ended by executive order last last summer, for for all countries. This may move it even further, disallowing those $2,500 informal entries, which is effectively actually just a $250 limit. But if you consider that the average parcel value is only about $50, you know, many importers, foreign importers of record continued to use informal entries as a way to maybe save on MPF, or to try to, you know, reduce the documentation required. Another one for an importers, of record will now have to, go through higher vetting as well as regular importers of record. What exactly is in this vetting? I'm gonna speculate on a little bit later, but that was clear for the executive order. There's also going to be a requirement to provide export documentation. And this one, I think, is a is kind of a big one, here for for most importers. Usually, when you file a customs import declaration, we don't really look at what those export declarations are. Those export declarations are the business of the other country. Right? So the US customs service, you know, US customs and border protection, they haven't really looked at that too much unless there's a much bigger investigation. This is suggesting they wanna look at it with at least much more regularity than they do today. Foreign importers of record will also be prohibited from using continuous bonds, which is quite scary until we read the fine print a little bit more. Foreign importers of record that can show revenue for customs will be protected and that the foreign importer of record will maintain compliance with laws, the regulations, and instructions from CBP, and use a CTPAT certified or verified broker. They are still allowed to use continuous bonds. But this does add another another hurdle here, where they have to somehow show what does this mean to be, you know, approved by CBP. You know, do I have to do this in advance? Do I am I assumed approved and then have to show later what I have to do? That's not not yet clear. But, that continuous bond thing, I think, maybe gave, every foreign importer record maybe just a bit a bit of pause when they when they read that. There's also a fair bit more on the administrative side about, some of the behind the scenes things not directly affecting importers, but, CBP was, directed to, purge inactive importers of record and create risk tiers for all, active IORs. They are going to heighten import disclosure requirements like business identifiers, you know, GBI, that sort of thing, supply chain production tracing potentially, and even SKUs as part of some of these disclosures. CBP will, remove some admin burdens on faster seizure and abandonment procedures, and the DOJ is gonna make trade fraud a higher priority. Limited penalty mitigation and a higher penalty minimum, is gonna be a part of this. Enhanced vetting for customs brokers as well. Brokers are gonna be subject to higher audits, more penalties for knowingly representing noncompliant IORs, and also creating vetting for brokers, forwarders, and bonded custodians as well. So finding ways to make sure that not only our customs brokers enter a little bit more scrutiny. What about bonded carriers? What about bonded warehouses? What about forwarders? Should we review their their approval to, you know, their SCAT code status? Are they allowed to be non vessel operating carriers, or are they also complicit in maybe some schemes to evade evade customs duties? Okay. That was the what. The next question is, okay. There's a lot going on here. When is all this gonna happen? Well, the executive order gave quite a few timelines about when they expect these things to be done. You know? And a lot of it kinda comes down here to a nice little timeline. And in general, these are somewhat shorter timelines. The regulations are, you know, saying that things need to happen in the next forty five to one hundred and eighty days depending on the exact piece here. Forty five days, though, is a bit of a lighter one. This is for secretary of homeland security, which CBP reports through, to make legislative recommendations on how to strengthen customs enforcement. There actually already have been some, some recommendations on this, mostly coming from, senator Cassidy of Louisiana. His office has had a couple of proposals on this. He actually proposed something not dissimilar from some of the parts of this executive order, that would, you know, increase bond requirements, you know, increase certain vetting, making sure there's, a physical presence in The United States for foreign importers of record. All of those sorts of things, from the SAFE Act are are singing from the same sheet, so to speak, than, as this executive order. Ninety days from now, there's a requirement for more foreign export documentation submission, the changing the mitigation standards, expediting the seizure process, deeper review of the transparency reports. A hundred and eighty days, the secretary shall revise importer requirements to ensure bonding and assets are sufficient to protect customs revenue, to require importers of record to maintain good standing or risk being suspended, from importing, removing inactive importers of record, vetting procedures for IORs and all the other supply chain partners, and then finally, about a year from now, to submit a report on how effective were these things. So the question that kinda comes up a little bit is, well, what does this necessarily mean? How quickly is this? A lot of it says, you know, the you know, there's words saying, like, they shall, you know, effect to do this thing. They shall circulate. They shall, enhance. They shall create measures. They shall take steps to. And so the question is sort of, well, when is this actually gonna go into place? And you think about, okay, ninety days until they have to propose some sort of rule. It then goes through kind of a regulations process here, and then we see we see what happens. And this regulation of rulemaking process go is governed by the Administrative Procedures Act, which I am not a lawyer, but in a broad sense here, I can talk about a few of these steps. Their executive order comes out. The agency develops what they're gonna do and say, like, hey. We wanna, you know, create this new rule. They, release an official notice of proposed rulemaking, a draft version with their summaries. There's documents associated with it. They open up a comment period, sixty, thirty, ninety days, sometimes up to a hundred and eighty days for the public to weigh in and getting feedback from the trade, after that comment period. This is sometimes where regulations can languish because they get these public comments, and then they sit on them for months, sometimes even years before final rules actually occurred. And the final rule is saying, okay. Now that we've gone through all this, we've gotten stakeholder feedback, we've maybe made some revisions to our original rule. We're gonna now announce this, and it's gonna go into effective usually around thirty days from the date of publishing, but sometimes it can be years depending on how invasive or how burdensome, the rule can be. So you think about, okay. If they have to circulate some of these rules, they shall update, they shall establish, take steps to establish some of these rules here within these forty five, ninety, hundred and eighty day timelines. Okay. So they do that. They circulate these rules. There's a thirty to sixty day comment period here, and there's a final rule. You know, there's some more things here. Marcus, how long are we talking about until we actually see some of this coming into force? And that's really kind of the big question is when do we actually see this, and is there any way to kinda maybe shorten this? Are you con are we considering that? And the answer is yes. There is a way to shorten it. There is a good cause part of the Administrative Procedures Act, which says this proposal and comment period could be waived if it's deemed to be impractical, unnecessary, or contrary to the public interest. And you say, well, Marcus, why would that ever why would they ever do that? I need only remind you that, for the IEPAA duties last year, there was a national emergency declared about the imbalance of trade and, how there was, we were being ripped off by many different countries. There's a surge of fentanyl from China and Canada and Mexico. So in order to do this here, we, you know, we need to have some emergency procedures in place, and those procedures were tariffs, later deemed to be illegally done, but the emergencies are still in place. This wasn't directly made pursuant to the emergency, but it's easy to see how maybe the administration may try to connect the dots here and say, actually, we do have good cause for expedited rulemaking. Another way I'd maybe point out and say, like, why there may be some expedited rulemaking that could be happening here is the announcement. The announcement from the White House, Trump signed it, had a ceremony, had some of his advisers around talking about it. And I forget which adviser it was, but I remember hearing them say that we're hoping to get $15,000,000,000 in revenue as a result of these changes this year and 30,000,000,000 as a result of these changes next year. That to me says they're looking to maybe have some of these things enforced sooner than later by cracking down on fraudulent importers that should, in theory, increase revenue. Now I don't know if those 15 or $30,000,000,000 numbers that were cited are accurate or if the administration's maybe inflating them a bit. But regardless, they I think that does seem to suggest they're expecting to see some benefit to the bottom line, of CBP this year. Maybe not, maybe not right away, may take a few months, but the question then becomes, okay. We have all these rules. We're gonna do all these things. When do they actually take effect? Well, my first, kind of announcement of speculation going back to the timeline here. So those ninety day threshold pieces, maybe in September to January, but it's very unknown exactly when this may actually happen. But if they are going with my suspicion that these are gonna be on an expedited timeline here, this would be one place where we'd see that. The 180 requirements, maybe December to March, a little bit later, take a little bit longer. Some of these maybe are a little bit heavier lifts, like creating a new vetting procedure, you know, making sure we have a new importer standard on how to make sure there's domestic assets, you know, enough to to, cover, any risk to the revenue of CBP. That may take a little bit longer to kinda circulate those those things here, but I everything kinda points to they wanna have this done, soon, some of these things done this year, and have all of it done in time to have ample time to publish this June 3 report on effectiveness. I can tell what it seems to me is that the administration does intend to move quickly on this. So there's not we still need to see what exactly those regulations are, what they're actually gonna propose, but, I would expect some changes this year. If you're a foreign importer of record, if you're a US consignee for foreign importer of record, you receive DDP shipments, you may see some tangible effects before, before the end of twenty twenty six. Okay. The how. So how are they gonna do this? Well, they're gonna do it through regulation, but what exactly are those regulations gonna say? And as I was writing this and trying to get this together for today, I was like, well, there's it's not really clear how they could do this. There's a lot of different ways they could. Some of these things are pretty clear. Right? Okay. Increased bond minimums. Got it. Makes sense. Foreign importers of record, banned from informal entries. That's pretty that's also fairly clear as well. I can I can understand what that would mean? But beyond this, it gets a little bit more speculative. And so I think about, okay. Well, what is the intent of the administration? What are some of the main pieces they're trying to solve for? And so we get this new section of sort of what maybe I expect from the how. And so this is part of where I'm gonna opine a little bit more about what I'm expecting to see, throughout the rest of this year. And I see them focusing kind of in three areas. They're really kinda doing this, try to solve three major problems. Number one, I think, is trying to continue to solve the problem that came up with de minimis. Like, de minimis was kind of in the crosshairs for customs even under the Biden administration. Trump used an executive order to ban it for China, then ban it for every other country some months later. But it's still a problem because a lot of, a lot of these importers still just went to small parcel shipments instead. And a part of the problem with handling these small parcel shipments, the former, one of the former directors for CBP, I believe her name was Pullum, or Fulum, she said that processing one disposal or abandonment for a de minimis clearance is about $1,100 in staff time because you gotta pay for these two guys. They have to take pictures of it. They have to document it. They have to send notices to the consignee saying, hey. There's this package here. Do you wanna clear customs on it or not? We're gonna destroy it. Here's your notice. Okay. Here's your notice again. Okay. Now we're gonna destroy it. All that would to have all these people doing this inspection and all that, she estimated somewhere between 1,100 and $2,300, sometimes per parcel. There seems like what they wanna do is they wanna be able to strip out a lot of that administrative burden to say, okay. For those low value parcels here, that are coming in, or just maybe any other parcels for foreign importers of record, maybe we don't have to do all this back and forth. Is there any way maybe we can save time, save money of processing those shipments and declare them abandoned, sooner? I think that's one big piece. I think the third main thing is also something that you may have received as a good importer. You knew that it smelled suspicious. And I got these, and I'm a broker. Right? They're emailing export and customs broker, freight forwarder, and they're saying, hey. If you ship DDP with us, we can save you 40% on tariffs. Hey. If you ship DDP with us from China to United States, we can you can reduce your duty rate. This is pretty remarkable because, freight is not part of the transaction value in The United States, meaning it'd be pretty strange to see how by switching your Incoterms, you would lower the dutiable value, of the merchandise. Yet somehow, they seem to think this is possible. I think this is also the kind of the suspicious thing that CBP is looking at. There's another another point, another statistic from this, that, I thought was very telling. And that the first three quarters, of last year, the overall US ocean bound volume from peers shrank by about 18% compared to the same time in 2024. So the overall pie shrank 18% across the board for all forwarders, trade war, uncertainty. Right? Volumes dipped quite dramatically. But over that same time period, Chinese headquarters freight forwarders actually saw their volumes grow by 6%. So either they have really savvy business acumen and they just happen to be better forwarders than everybody else, every other, you know, headquartered country, or perhaps they've been making pitches like this to say, hey. We can save you money on tariffs. Hey. We can make your DDP more we have a DDP solution for you that will lower your total cost. There may be a few of these things that were that were sitting there. I think this is the third thing that CDP is really trying to target. They're really going after, I think, these shell IORs and these sham companies more than anything else. And they're really going after brokers and forwarders that were being very irresponsible in their supervision, of the of the declaration process and trying to continue to kinda end this new de minimis using informal entries as the compliance risks are still there. There's still drugs. There's still higher risks of fraud. These seem to be the places they're going. I don't think they're really concerned with going after IKEA. I think they're more concerned about going over, you know, companies that pop up, import for a few months, and then surprisingly and mysteriously shut down before the chance of CBP to catch up and to do audits and to send out send out bills later. This is trying to upstream this problem as much as they can. So the how. What do we think these regulations are gonna look like? What are they gonna shape up to be? Tangible assets is a little bit gray, but I do think among other things that this is probably going to include some sort of requirement about a US bank account. To have sufficient tangible assets in The United States, well, I get to that in a minute here. But the tangible assets, I think they are looking for some sort of real physical presence. And using a US bank account means you now start to fall under a whole host of federal regulations involving finance, things about money tracing, money laundering, anti corruption schemes, all sorts of things that the IRS and SEC and all these other regulatory agencies, FBI, have at their disposal. So if you're using a US bank account, it's harder to try to hide things with shell companies through, you know, know your customers regulations. So I think a US bank account is probably something that may become a requirement for foreign importers of record, or if not, maybe they have just higher bonding requirements. I think another one that we'll see is that when they talk about importer vetting, the fifty one zero six, is a form by which customs brokers register importers of record. So if you've never imported before and you wanna sign up, you have your customs broker fill out a fifty one zero six. Right now, I can tell you that I've never gotten a fifty one zero six rejected. I have never seen it really been denied. I've never really seen it been challenged by customs. Right now, I fill it in. I put electronic information based on what the customer is telling me. I send it to CBP. CBP approves it. As far as I can tell, there's no vetting on their side. All of these importer accounts get set up with very few approvals in the place. I think there'll be fewer of these automatic approvals. I think CBP is gonna take a little bit closer look at approving maybe fifty one zero sixes in I mean, this coming future. As part of that, I think they may even go out to try to look at some of these principal places of business. This has been defined by the Supreme Court as kinda like the nerve center where decisions are made. There's key officers there, all things of that nature. But, you know, if there's a lot of principal places of business that are listed in in Delaware service of process addresses or at 30 North Gold Street in Sheridan, I think those those are definitely more in the target here. The export documentation is maybe not something they're gonna have on every shipment. Right? So they wanna look at what did you declare the value was to the foreign government, what are you now declaring the value is to the US government, and comparing those two. I think it'd be a little bit too burdensome for CBP to look at this every single time, but this may be something that they look for now where they haven't really asked for this much in the in the in the in the past. You know, when it comes to exports, a lot of company or a lot of countries have VAT, and they have VAT refunds. And if you export something, you can get a refund of VAT. So there's an incentive to overinflate the value in the origin country, the exporting country, because you can get a VAT refund, but then also lower the value by the time it gets to The United States so that you pay less in duty to The United States. I think this is the spread that they're trying to look at. And I don't think they're gonna look at this for every shipment, but I do think this is something that maybe gets asked about more often. I think there'll be more scorecards for brokers, and I'm not quite sure when they'll review it. Maybe this is part of the triennial review that brokers are required to do already. Maybe they're gonna have this more ad hoc, but there doesn't seem to be any clear funding that's gonna come along with this from this executive order. Maybe that's something that gets included in the legislative proposal. I have more speculations because there's a lot in this executive order. One, I think we're gonna see more automated CF 20 eights, in the particular areas identified in this executive order. I think most brokers that I've heard from, talked to, trade lawyers I've I've heard from, c o 20 eights are increasing and pretty quick. And a lot of them seem maybe sloppy, maybe AI sloppy in some ways where they're just looking going fishing more than actually targeting. And they're trying to find areas where, you know, you had this HTS code here. This doesn't seem right. Prove it. And then we provide documentation. It seems pretty clear. But I think we're gonna see more of these CF 20 eights when it comes to company setups, when it comes to value, when it comes to maybe asking for this export documentation. I think we'll see that as well. The verification of identity and reporting structures of the company, this might be something that gets added into ACE for this nice naughty list. Maybe to be on this nice list, you have to upload, photo ID copies of key company officers, or you'd have to fill out some other kinds of forms. CBP has started to add more stuff to ACE as part of the CAEP filing. I don't think it's out of the question that all of a sudden they start asking like, hey. Do they have a photo ID, uploaded for key company officers to verify who that they are, who they say they are? This might be something that gets incorporated into this vetting process. Informal entry is banned, but I do wonder a little bit about other methods. You know, are they gonna look at the same way for parcel manifest clearances, FedEx, or UPS? How are they gonna treat those parcel carriers? A lot of those parcel carriers do get special rules. They get special treatment. They have for a while. They like it. And it's unclear exactly how much that's gonna stick around. But I I think that's what I'm gonna watch for. I think there may be some movement here, but I also think the political muscle of these parcel carriers, will be flexed a little bit more when it comes time to create regulation. And does higher penalties increase bond minimums and more collateral requirements in turn? Because the penalties will be higher, that's more risk to a bond company, So they may want you to secure a higher bond paying a higher bond premium and potentially even getting collateral or letters of credit as part of this as well. This may be something that shows up specifically for foreign importers of record. Maybe there's two tiers. It's hard to say, but these all kinda work together to ensure increase the bond requirements. Okay. Three areas that are a little bit too vague that I I couldn't quite think about what they wanna do here is what does it mean to be in good standing outside of not importing fentanyl and not in using forced labor? I'm not sure what this means. If they send you CF 20 eights or 20 nines or they do a rate advance on your entry, does that mean that you're no longer in good standing? Is it about response timeliness? Is it about documentation uploaded in ACE? I'm not sure. And I don't quite know yet what it means to be in good standing. We know what it means to not be in good standing, but what it actually means to do the minimum, that's that's not clear yet. The other big one, I think, personally, is kinda wondering about how much are customs brokers gonna be called upon to be enforcers. CBP has pushed for this in the past when they started to circulate rules after TIFTEA, and brokers were very resistant to it. They're saying, we're not police officers. We have fiduciary responsibilities to our customers to look out for their business. Customs, you are the enforcement body. You go enforce. But we're also great sources of information gathering some of those pieces of information, and CBP sees this. So the question I think here is if CBP wants more importer vetting, if CBP doesn't get more staffing to do this, are they gonna look to brokers to try to scratch this up? Are they gonna look to brokers to try to find out more of these sources of information? Maybe so. And then the broker community is probably not gonna be too happy about it, myself included. I think CBP should be an enforcement role, but maybe, maybe they should be staffed in order to do it or or they have the correct tooling to do it themselves. The third one is also what is a sufficient tangible assets? They say this, that it has sufficient bonding and sufficient tangible assets to, you know, as a foreign importer of record, you can keep operating. But what is sufficient? How does that define? Is it a percentage of revenue? Is it a percentage of volume? Does it just have to be a big number? Is it you know, who knows? What does that actually mean to be sufficient? What things get counted? Do owned real estate, you know, or mortgage real estate count, but not real estate leases? Do you need like, does it that number go down if you have more US employees, or, does it need to be certain amount of money in a bank account? Unclear. Very unclear what it means to have sufficient tangible assets. I think tangible assets will include bank accounts, maybe other things like real estate or employees. But, what it means to be sufficient is probably where a lot of, a a a lot of speculation still remains here. A lot of, a lot of not as much clarity there. So there's a lot of unknowns. And so for this unknown how, what can we do to prepare? And if you are, a US company, if you're a consignee buying DDP, ask your supplier about these changes and saying, are you expecting any changes to our sales arrangement because of this? And listen to their answer, see what they say, what they don't say. But either case, it's a good conversation to have now. If you're a consignee buying DDP, you should also be looking into what would it take to start importing on your own behalf, to be your own importer of record. I suspect there'll be many foreign importers of record that cannot meet all of the new requirements coming from this. I think there'll be some legitimate and good, you know, quality, but maybe just ignorant or just inexperienced foreign importers who maybe don't know enough to set up in The United States and, you know, establish themselves here. So, you may take this on yourself if you're just a US consignee for DDP. I think another one for those that have related parties overseas, you know, foreign nationals or foreign multinationals maybe weren't the target of this, but I do wonder exactly what might happen to some of the transfer pricing studies between related parties this year. Transfer pricing studies are showing that you have arm's length transactions. The companies usually have tried to put, you know, more value kind of in or more value in in US, in in The US account because the tariff you or the tax you pay is tariffs, which are historically low. And, you know, VAT is another country which went historically high. But is this gonna change things? Right? If you suddenly now have to show your export value compared to your import value and customs is gonna look at that with a more skeptical eye. Does this mean that your current transfer pricing studies are what's optimal for your own company? Maybe not. This is probably something you'll have to take a look at when we see more regulations come out. I think the other one is also just be prepared to more share more information with CBP or your customs broker about your organization. After 2023, I know there's more pushback about asking for photo ID at the time of POA signing from certain company officers. That is probably gonna continue. So I would expect to, be prepared to, be able to share more information, talk about the org structure, talk about affiliates, subsidiaries, all those sorts of things as well. For foreign importers, if you're selling to US consignees, I would ask if they're willing to buy on non DDP terms. Even if it's just moving to c or, you know, DAP terms, are they willing to move and take over that responsibility as importer of record? I think it's a question that you need to have now with your US consignee. If you've relied on informal entries in the past as a foreign importer of record, I think it's time to start pricing out what it would take to do formal entries and see how that may affect things, how you could have set up a continuous bond. If you declared export value that is lower than The US import value, you may need to explain the difference. I'm not a tax lawyer. There may be very good reasons and legitimate reasons why those two values are different. But in any case, you should probably be prepared to explain that, to, to a, to a customs officer should they ask. I think it's also worth asking to find out what would it take to set up a US subsidiary. Do we have the capacity to even do this? Looking at tax implications, banking information, do do we need to hire US employees or secure real estate leases? That's maybe something else worth looking at to see. Is this is this something possible to set up? Or should I try to partner with a US import and just sell to them as f terms instead of importing ourselves? Maybe there's a little bit of a cost to it, but it still gives you US market access. And I'd highlight that if you are a Canadian company, congratulations. You are allowed to apply for CTPAT. You're the only I think I think you're the only foreign country that is allowed to have CTPAT certified status, other than US companies. So you could get that meet that own requirement on yourself. Maybe that puts you on a nice list. So if you are a Canadian foreign importer of record, if you haven't set up signed up for CTPAT, look into that, start the the validation process. Validation, where they come on-site, can take many years sometimes, so I would start that, sooner than later. Okay. With that, I will see I'm sorry. That was a lot of information really fast here. I'm gonna pause for a drink of water, and then I'll take a quick look at the q and a and go through a couple questions. Okay. Can you define domestic versus foreign IOR? Yeah. So the domestic IOR, they actually wanted to in the executive order, they defined it. And let me, read this to you right off the bat here, right from it. Just a moment. Just a moment. I have it here. They said a US imported record while I'm finding it, The US imported record was some, somebody with a principal place of business in The United States with US assets, US employees, and US citizens, as part of that operation, and foreign importers of record were those that did not meet that definition. So they are creating something of of two tiers, of imported. I will just send that out. I'm not gonna delay too much longer. I thought I had it up right away, but, I will have to send that out afterward. I'll include that, in the in the webinar feedback. But, yeah, the short version is that US presence, US officers, US, tax IDs, and, physically located in The US with US employees. These new regulations with DDP imports at risk. Absolutely. Yes. For many reasons that covered above. What can you do to get on the good scaling list? That is not yet known at this time. That was one of the things I'm not not quite sure about yet. Just a moment here. Let's see. We, what about the import shipments going directly to warehouses or marketplace? What problems do you expect that type of business to face? And I think I see a related one just next to it. Many foreign sellers on ecommerce platforms avoid de minimis by shipping in bulk to Amazon or Walmart FBA centers. Will this affect them? They are the biggest competitors to US based businesses. Yeah. I do think they're gonna have, quite a bit of impact here. And so I think it's be very curious, very fascinating to watch, what kind of political muscles, Amazon and Walmart both both try to pull here. A lot of these kind of, you know, Walmart and, and Amazon have this sort of made up Incoterm called MDDP, which allows you to use their very attractive freight contracts, but you, as a foreign shipper, are still responsible for the import customs. And so they take a bit of a hands off approach to that. So this is maybe something that customs has known about for a while. This is maybe something that, is a little bit not always, maybe it's legitimate most of the time. Once in a while, maybe it's not. But maybe customs looks a little bit closer at this. There was one estimate, I think, from two years ago that said roughly 60% of the sellers on Amazon are based in China. So I'd imagine this is, like, gonna have a pretty significant impact on many of those sellers, especially if they've been trying to, you know, deal with this MDDP situation, trying to find brokers that are amenable to, you know, to being a little more flexible in lowering cost to sell into Amazon. So I do think, Amazon, Walmart, FBA is gonna is gonna have an impact, certainly. Alright. I think I have time for one more here. Let's see. If we have access to foreign exporting documents, should we start saving them as well? That's a good question. I'd say maybe not quite yet, but I would, yeah, I I would do so. I would start having a process to maybe get those documents as part of import packages. So if you get a commercial invoice, maybe this is something that they could already include. Maybe it's something if you're already getting copies of, you know, Telesk bills of waiting. This is something that they can also start to incorporate as well. And I see one more one here. Why are single transaction bonds, STBs, being pushed instead of continuous bonds for foreign importers of record? Gen those are just, this it overall increases your bond exposure, for an importer record to, like, have all these single transaction bonds. And, also, this means more revenue for customs so that each individual entry is secured by its own bond. So if you have 10 entries that are all wrong, if they're all on single entry bonds, customs could liquidate them at higher amounts, essentially secure more revenue versus one continuous bond that covers 10 entries. That continuous bond may be at a lower threshold and maybe less so. The the bond companies would also make a little bit more money on all those single transaction bonds. But I think this is going to, restrict you know, strengthen those requirements as well for for the bond companies. Okay. We'll stop there for today. Thanks for being patient listening in. I know this is a lot to try to unpack, but it's a big executive order. I'd encourage you all to reach it, and I will find, find that definition of what's gonna be a US, importer of record under a new executive order. We'll be sure to send that out. We're also gonna send out a copy of the recording here as well as the slides, tomorrow. So look for that. Thanks for attending, especially here on a Friday, especially those in the EU on a Friday afternoon in the summer. Thanks very much. Have a good night.