08/21/2026
CAPE Phase 3 Implementation Delayed; Filing Limited to CIT Case Participants
Check out this week's Customs Corner to read about CAPE Phase 3 Implementation Delayed; Filing Limited to CIT Case Participants, and more!
Trade and Customs Updates
CAPE Phase 3 Implementation Delayed; Filing Limited to CIT Case Participants
CAPE Phase 3 is expected to apply only to importers with an individual case pending before the U.S. Court of International Trade (CIT). Although CBP has not released formal public guidance on the process, we understand that both the Department of Justice (DOJ) and CBP have been working directly with legal counsel representing affected importers to obtain and validate case-specific information required for participation in Phase 3.
The information being collected is intended to support Phase 3 filings by the customs broker and Importer of Record (IOR) for eligible entries. Phase 3 had been scheduled to go live on August 20; however, according to communications provided to legal counsel, the launch has been postponed due to technical issues. At this time, neither CBP nor the DOJ has announced a revised implementation date.
Importers with qualifying CIT cases should continue to coordinate closely with their legal counsel and customs brokers to ensure all required case information has been provided and that they are prepared to file once Phase 3 becomes operational. Additional updates will be provided as more information becomes available.
CBP Provides Additional Guidance on Enhanced Due Diligence Requirements for CTPAT-Validated Customs Brokers
Following the issuance of Executive Order 14411 on June 3, 2026, U.S. Customs and Border Protection (CBP) has provided CTPAT participants with additional insight into how the agency intends to implement the order's enhanced compliance framework for foreign Importers of Record (IORs) and CTPAT-validated customs brokers (CVCBs).
As previously announced, the Executive Order requires foreign IORs to either obtain CTPAT validation or utilize a licensed CTPAT-validated customs broker when filing customs entries with CBP. According to CBP, this requirement is intended to ensure foreign importers are subject to standards comparable to those applied to U.S.-based importers, while strengthening supply chain security and reducing opportunities for non-compliance.
The recent CTPAT communication provides additional detail regarding the heightened due diligence expectations that will apply to CVCBs. Under the anticipated framework, brokers will be expected to conduct comprehensive vetting of foreign clients, including verification of legal identity, ownership structure, business affiliations, U.S. assets, import history, and compliance records. CBP also expects brokers to assess an importer's ability to satisfy duty, tax, and fee obligations and validate information related to supply chains, country of origin, classification, and valuation.
In addition, CVCBs will be required to maintain detailed records demonstrating that appropriate due diligence has been performed. Documentation is expected to include powers of attorney, vetting records, and relevant client communications. CBP indicated these measures are intended to enhance accountability and provide greater visibility into importer compliance.
The notice also highlights the Executive Order's requirement that all Importers of Record maintain "good standing" with CBP. Importers that fail to meet future good-standing requirements could face restrictions on their ability to import merchandise into the United States or designate a customs broker to act on their behalf. Brokers that fail to meet due diligence expectations, repeatedly represent non-compliant clients, or fail to cooperate with CBP requests may be subject to significant penalties, increased audits, and possible removal from the CTPAT program.
GEODIS is a CTPAT-certified and validated customs brokerage provider.
CBP to Begin Enhanced Form 5106 Enforcement on September 18, 2026
On August 19, 2026, U.S. Customs and Border Protection (CBP) published a Federal Register notice outlining a comprehensive review of Form 5106 and Importer of Record (IOR) information. As part of this initiative, CBP announced that effective September 18, 2026, it may immediately void an IOR number when Form 5106 data is determined to be inaccurate or incomplete. A voided IOR number becomes invalid for customs purposes, including the entry of merchandise into the United States.
The notice signals a significant shift in CBP's approach to importer registration data. Historically viewed primarily as an account registration requirement, Form 5106 information will now be subject to increased scrutiny as CBP strengthens its importer identity verification efforts. CBP has emphasized that core importer data elements, including legal name, EIN or CBP-assigned number, mailing address, physical business address, telephone number, and email address, must be accurate, complete, current, and directly associated with the Importer of Record.
Particular attention is being placed on importer contact information. CBP has clarified that customs brokers, freight forwarders, registered agents, virtual offices, business service centers, and other third parties may not be substituted for the importer's physical address, telephone number, or email address. The agency expects the information reported on Form 5106 to identify and reach the importer directly.
The Federal Register notice also reinforces customs brokers' due diligence obligations. CBP has stated that brokers should not transmit information to the agency that they know, or reasonably should know, is inaccurate, misleading, or unverified. In addition, brokers must maintain valid powers of attorney executed directly with the Importer of Record and ensure importer information is appropriately validated before submission.
As a result, both importers and brokers should take immediate steps to review existing Form 5106 records. Importers are encouraged to validate all active IOR numbers, confirm legal entity information, verify physical and mailing addresses, and ensure phone and email records belong directly to the importing entity. Brokers should similarly review customer account records, identify instances where broker contact information may have been substituted for importer information, update outdated records, and reconcile discrepancies before the September 18 enforcement date.
CBP has indicated that written notice of a voided IOR number will be sent to the most recently reported importer email address and, where applicable, copied to the broker that most recently filed entries on behalf of the importer. The notice will include information regarding the basis for the voiding and the process for requesting reestablishment of the IOR number.
The agency has also established [email protected] as a point of contact for questions related to the enforcement initiative and requests for reactivation of voided IOR numbers.
With less than one month between publication of the notice and enforcement, importers and customs brokers should prioritize a thorough review of Form 5106 information to mitigate potential disruptions to import operations. Importers are encouraged to validate their information through the ACE Secure Data Portal, confirm that all data matches current business records, and coordinate with their customs brokers to resolve any discrepancies. Failure to maintain accurate importer records could result in delays, cargo holds, entry filing issues, and the temporary inability to import merchandise into the United States.
Reference:
Implementation of Section 338 Tariffs on Canadian Goods Delayed Amid Ongoing U.S.-Canada Negotiations
On August 18, 2026, President Trump issued a proclamation delaying the implementation of additional 50% duties on certain Canadian imports imposed under Section 338 of the Tariff Act of 1930. The tariffs had been scheduled to take effect on August 19, 2026, but were postponed for three days until 12:01 a.m. EDT on August 22, 2026.
The Section 338 actions stem from three presidential proclamations issued on July 20, 2026, which found that certain Canadian policies related to motor vehicles, dairy products, and alcoholic beverages constituted discriminatory treatment of U.S. commerce. Section 338 provides the President authority to impose additional duties of up to 50% on products from countries determined to be engaging in unreasonable or discriminatory trade practices.
According to the Administration, the temporary suspension was granted after Canada expressed a commitment to address the issues identified in the original proclamations. U.S. officials also cited positive progress in ongoing negotiations between the two countries and indicated that a short delay was warranted to allow discussions to continue.
Importantly, the delay does not eliminate the tariffs. Unless a final agreement is reached or additional action is taken by the Administration, the Section 338 duties are scheduled to become effective on August 22, 2026. Importers should continue planning for implementation and monitor developments closely over the coming days.
The proposed tariffs would affect approximately $20 billion in Canadian imports and cover a broad range of products beyond the sectors that prompted the dispute. Depending on the applicable proclamation, impacted goods may include consumer products, textiles, industrial goods, natural resources, agricultural products, and other Canadian-origin merchandise. Notably, the tariffs would apply regardless of USMCA eligibility and would be in addition to existing duties and fees.
Importers sourcing products from Canada should review affected tariff classifications, evaluate shipment timing, and assess potential duty exposure should the tariffs take effect. Companies with goods currently in transit or scheduled to enter the United States in the coming days should work closely with customs brokers and supply chain partners to understand the potential impact on landed costs and customs compliance obligations.
Reference:
CBP Confirms Section 301 Brazil and Forced Labor Duties Remain Eligible for Duty Drawback
U.S. Customs and Border Protection (CBP) has issued a correction confirming that duties assessed under the Section 301 tariffs on certain products from Brazil and the Section 301 Forced Labor Import Duties are eligible for duty drawback. The clarification follows confusion created by an August 12, 2026 ACE system update that appeared to disallow drawback claims for these tariff classifications.
The issue arose when CBP deployed updated ACE drawback validations that prevented drawback filings associated with HTSUS 9903.05.01, covering certain products from Brazil, and HTSUS 9903.05.20 through 9903.05.84, covering Section 301 Forced Labor Import Duties. The system changes led many importers and drawback filers to question whether the newly implemented duties had been excluded from drawback eligibility.
On August 18, 2026, CBP issued a correction stating that the affected tariff provisions are, in fact, drawback eligible. CBP further confirmed that ACE drawback validations have been corrected and that drawback filings for the affected Chapter 99 provisions will once again be accepted. The agency also updated its Drawback Error Dictionary to reflect the correction.
The clarification is consistent with CBP's longstanding treatment of Section 301 duties, which generally remain eligible for duty drawback when all statutory drawback requirements are satisfied. As a result, importers that subsequently export or destroy qualifying merchandise may be able to recover up to 99% of eligible duties paid, including duties assessed under these newer Section 301 programs.
Companies that file drawback claims should review any filings submitted or delayed during the period when the incorrect ACE validation was in place. Importers may also want to evaluate whether the additional Section 301 duties create new drawback recovery opportunities, particularly for organizations with significant export activity or established drawback programs.
The correction serves as an important reminder that even as new trade actions are implemented, importers should carefully assess whether additional duties are recoverable through drawback programs. With duty rates continuing to increase across multiple tariff programs, duty drawback remains a valuable tool for reducing overall import costs and improving landed cost management.
Reference:
CSMS # 69567203 - Correction: Notice of Update to Drawback Error Dictionary Validations for FD07
National Commodity Specialist Division (NCSD) August 2026 Webinars
The National Commodity Specialist Division, part of the Office of Trade, is launching a new series of over 30 commodity-specific educational webinars aimed at supporting both internal and external stakeholders. This year’s program, themed "The Future of Trade: Innovation and Emerging Technology," will focus on the impact of rapidly advancing technology while also offering general classification guidance to facilitate legitimate trade.
The webinars will be hosted on the WebEx platform to ensure a seamless experience, and recordings will be posted publicly at Trade Outreach Webinars | U.S. Customs and Border Protection
NCSD’s August Webinar Schedule:
Wednesday, August 26, 2026 at 1:30 p.m. ET: Mattresses and Cushions: Hybrids & More of Heading 9404 – The “Mattresses and Cushions: Hybrids & More of Heading 9404” is part of the 2026 Educations Commodity Specific Webinar Series hosted by the National Commodity Specialist Division, Regulations and Rulings, Office of Trade. This webinar will cover the classification of mattresses and cushions of heading 9404 and how classification is determined for more complex items such as hybrids, pneumatic items, and bed-in-the-box items. We will examine the legal notes, previously issued rulings and court cases that guide our classification of these products.
Thursday, August 27, 2026 at 1:30 p.m. ET: Counter-Balance: Surfaces of Chapters 68 and 70 – The “Counter-Balance: Surfaces of Chapters 68 and 70” is part of the 2026 Educations Commodity Specific Webinar Series hosted by the National Commodity Specialist Division, Regulations and Rulings, Office of Trade. This webinar will discuss the classification of, and AD/CVD scopes related to, manufactured surface products of Chapters 68 and 70.
Friday, August 28, 2026 at 1:30 p.m. ET: Wadding, Gauze, Bandages, and Similar Articles – The “Wadding, Gauze, Bandages, and Similar Articles” is part of the 2026 Educations Commodity Specific Webinar Series hosted by the National Commodity Specialist Division, Regulations and Rulings, Office of Trade. This webinar will focus on the primary factors to consider when classifying products under heading 3005: medical use, wound treatment, the presence of pharmaceutical substances, and packing.
Reference:
CSMS # 69242526 - National Commodity Specialist Division (NCSD) August 2026 Webinars
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