US Executive Order on Customs Enforcement: What Canadian Importers Need to Watch

US CBP Tightens IOR Rules

On June 3, the US President signed an Executive Order directing US Customs and Border Protection to close loopholes in importer-of-record compliance and duty evasion. The stated targets are undervaluation, incomplete IOR disclosure, and non-payment of duties. That sounds like a Washington problem, but Canadian importers with US-Canada cross-border programs or shared supply chains are already asking the same question: does this change anything on our side of the line?

Short answer: not directly. CBSA operates under its own legislative authority, and US executive orders do not bind Canadian customs administration. But the enforcement posture shift matters because bilateral intelligence sharing under the Beyond the Border Action Plan means CBSA sees the same trade data US CBP flags. When US CBP starts pulling transaction-level IOR audits or targeting goods with suspected undervaluation, those patterns show up in CBSA risk scoring within a fiscal quarter.

We have seen this before. When US CBP launched Section 301 targeting in 2018, CBSA verification teams picked up similar HS re-classification audits on Chinese-origin goods transshipped through Canada within six months. The enforcement priority does not cross the border as law; it crosses as operational focus.

IOR Disclosure and the Canadian NRI Problem

The Executive Order singles out “withholding critical information about IORs and the goods being imported.” In Canadian terms, that tracks closely with CBSA’s Non-Resident Importer (NRI) compliance regime, which has been under tighter scrutiny since CARM went live in October 2023.

Under D-memo D17-1-4, an NRI must provide a valid Canadian Business Number (BN15) or Social Insurance Number, post financial security, and appoint a responsible agent in Canada. The penalty structure under AMPS is steep: CAD 1,000 for the first missed declaration element, CAD 2,500 for the second, and scaling upward. The problem is not the legal framework—it has existed since 2016. The problem is enforcement consistency.

We routinely see importers who filed NRI declarations for years under the old B3 paper process suddenly flagged during CARM Client Portal onboarding because their BN15 was never validated against CRA records, or their posted bond amount does not align with their trailing twelve-month duty exposure. CBSA is not inventing new rules. They are enforcing existing ones with better data visibility, and the US enforcement push will only accelerate that trend.

If you are filing as an NRI or acting as the agent of record for a non-resident, run a BN15 validation check now. CBSA’s Importer Self-Assessment program publishes a validation service, and most licensed brokers can query it on your behalf. Waiting until a CAD is flagged at release costs more than the ten minutes it takes to check.

SIMA and Anti-Dumping Referrals

The Executive Order also emphasizes “avoiding payment of duties,” which in US terms means anti-dumping and countervailing duty (AD/CVD) evasion. Canada’s equivalent is the Special Import Measures Act (SIMA), administered by CBSA and adjudicated by the Canadian International Trade Tribunal (CITT).

SIMA enforcement has been active this year. CBSA published updated Normal Value (NRM) tables for steel products in Q1 2025, and we have seen a noticeable uptick in origin verification requests for goods classified under HS 72 and 73—particularly where the exporter changed mid-shipment or the country of origin declaration does not match the supplier’s registered address.

When US CBP flags a product category for AD/CVD circumvention—say, solar panels transshipped through Southeast Asia, or aluminum extrusions routed via Mexico—CBSA’s SIMA team routinely opens parallel investigations. The two agencies share Harmonized System classification data and trade flow analytics. If US CBP publishes a Federal Register notice identifying evasion schemes in a product category, expect CBSA verification letters within sixty days on similar imports into Canada.

The operational consequence: if you are importing subject goods under a SIMA measure, your CAD filing needs to declare the correct Normal Value, not the transaction value. Filing the invoice price and hoping CBSA misses it is not a compliance strategy. It is a way to guarantee an AMPS penalty when the audit cycle catches up. CBSA’s risk engine flags discrepancies between declared value and published NRM tables automatically now. The old manual review process that let errors slide through does not exist anymore under CARM.

Undervaluation and HS Classification Drift

Undervaluation is harder to prove than misclassification, but CBSA has started using trade data benchmarking to flag outliers. If your declared unit value for a given HS code falls more than two standard deviations below the rolling median for similar imports, your CAD goes into secondary review. That is not a penalty—yet. But it triggers a verification letter asking for commercial invoices, packing lists, and supplier certifications.

The smarter risk sits in HS classification drift. Importers who self-classify at the six-digit level sometimes pick a tariff line that underestimates duty liability, not out of intent but because product descriptions are vague or the item straddles two codes. CBSA’s post-release verification teams have been working through a backlog of misclassified entries from 2022-2023, and the error rate is higher than most importers expect.

If you have not run a classification audit in the last eighteen months, especially on high-volume SKUs, that is the exposure point. CBSA will assess unpaid duties retrograde for four years under Customs Act section 32.2. Add interest, add AMPS penalties if they conclude the error was negligent, and the cost stack gets heavy fast.

We run classification reviews as part of our compliance service, and the most common issue is not fraud. It is product evolution. A component that was non-electric in 2021 now includes a sensor module, which changes the HS heading and the MFN duty rate. The importer keeps using the old code because nobody flagged the change. CBSA’s risk engine catches it when the product description keywords shift.

What Canadian Importers Should Do Now

Three things stand out as immediate action items.

First, validate your NRI setup if you file under that structure. Check your BN15 status, confirm your posted security covers your actual monthly duty exposure, and make sure your agent-of-record details in the CARM Client Portal match your current operating structure. CBSA is running automated compliance checks on NRI accounts quarterly now, and the failure rate is higher than anyone expected.

Second, audit your HS classifications for high-turnover product lines. If you import the same SKU every month and the unit value or product spec has changed in the last two years, re-classify it. The cost of a broker opinion on ten SKUs is lower than the cost of one AMPS penalty assessment.

Third, if you are importing subject goods under a SIMA measure, reconcile your declared values against the published NRM tables. CBSA posts those tables on its SIMA enforcement page, and they update quarterly. Filing the wrong value is not a grey area. It is a direct compliance failure, and the audit trail is automated now.

US enforcement posture does not create Canadian law, but it does create operational pressure. When US CBP tightens IOR scrutiny, CBSA’s verification teams get busier, and the likelihood of your next CAD landing in secondary review goes up. The importers who come out clean are the ones who run their compliance audits before the verification letter arrives, not after.

We file CADs under these rules daily, and we see the same patterns repeat. Most verification letters are noise. A few are not. If your CARM Client Portal shows pending verifications or your RPP bond sizing feels off after your last K84 statement, talk to a broker who files in this environment.

Source: CSCB