Starting September 1, 2026, CBP’s ability to reduce customs penalties gets dramatically narrower. The change stems from Executive Order 14411, “Strengthening Customs Enforcement,” signed June 3, 2026, which gave CBP 90 days to revise its penalty mitigation guidelines. That window closes September 1, and the new standards mark a sharp break from how penalty cases have historically been resolved.
What’s Changing
- A minimum penalty floor of no less than 50% of the assessed penalty, absent exceptional circumstances that materially impact national security. Under the prior framework, penalties were frequently mitigated down to nominal amounts; that discretion is now sharply limited.
- A minimum liquidated damages floor, raising the baseline cost of bond claims tied to noncompliance.
- Elimination of mitigation for repeat offenders. Importers with a prior violation on record will no longer have access to reduced penalties on a subsequent case, regardless of circumstances.
Why This Matters
Under the outgoing framework, a well-documented mitigation request could often bring an assessed penalty down significantly, sometimes to a small fraction of the original amount. That flexibility is going away for the vast majority of cases. Importers who have historically relied on post-assessment negotiation as a compliance safety net will find that path much narrower starting in September, and importers with any prior violation on file lose access to mitigation entirely on future cases.
Where This Fits in the Broader Enforcement Picture
This penalty change is one piece of a larger enforcement buildout. It follows the same June 3 executive order that also raises importer of record eligibility requirements and expands broker due diligence obligations, and it lands alongside CBP’s new OFO Strategy 2026-2030 and DOJ’s Global Trade & Commerce Enforcement Section, both of which signal a coordinated, well-resourced enforcement environment spanning the port of entry and the courtroom. It also follows an August 13 White House report on transshipment enforcement, which points to the same executive order and previews new AI-enabled targeting tools for identifying evasion patterns at the border.
What Importers Should Do Before September 1
- Review your compliance history for any prior penalty or violation on record; if one exists, understand that mitigation will no longer be available for a future case under the new standards.
- Treat prior disclosure as more valuable than ever. A complete, timely prior disclosure made before CBP opens a formal investigation remains one of the few tools that can meaningfully limit exposure under the new framework.
- Audit recent classification, valuation, and country-of-origin changes, especially any adjustments made after 2025’s tariff increases, since these are the areas CBP has flagged as enforcement priorities.
- Document reasonable care now: written classification opinions, supplier origin verification records, and a documented review process all become more valuable once mitigation is harder to obtain.
- Confirm your bond is adequate. A higher effective penalty floor increases the financial exposure a single case can create.
Have a past violation on file?
ASK Alba™: Alba’s trade compliance team can help you review your compliance history and shore up documentation before these standards take effect.
References
Alba: First Deadline Under the Customs Enforcement Executive Order Arrives This Week
Alba: DOJ and White House Intensify Focus on Transshipment and Customs Fraud
