March 30, 2026 | Customs Bonds
Red Flags to Watch Out for in Vetting Importers
This article is based on a recent webinar hosted by Roanoke Insurance Group President Karen Rzeszutko and featuring expert perspectives from Roanoke Regional Vice President Erik Wilsgard and Lenny Feldman, managing partner, operating committee, at Sandler, Travis & Rosenberg P.A.
Compliance with import regulations has taken on even greater importance in 2026, with the U.S. Customs and Border Protection (CBP) ushering in an “Age of Enforcement.” CBP is concerned about importers’ compliance practices and has expressed a strong interest in working with the community of customs brokers, sureties and servicing partners to improve importer vetting.
Vetting is an ongoing responsibility, not something customs brokers can do once during the onboarding process. Market conditions, the regulatory environment and import businesses change over time, requiring re-vetting. Tariffs are evolving and add complexity to importers’ compliance with CBP regulations. Red flags signal risks that require further investigation when brokers file bonds for an importer. Principals and decision-makers at customs brokers should consider red flags as tools for preventing risks from turning into losses, not a check-the-box exercise for compliance purposes. Strong partnerships between customs brokers and their sureties can reduce financial, bond and reputational exposure.
The consequences of a lack of vetting or weak vetting practices show up sooner or later in the form of bond claims and financial exposure. Incomplete vetting could mean customs brokers end up working with importers that might not be as reliable or compliant as expected, and those importers could owe more duties than anticipated. Reliable, accurate information on imported goods means financial exposure is limited.
Five red flags that customs brokers should look for in vetting importers are: documentation, financial, regulatory and compliance, behavioral, and high-risk commodities. Let’s explore each of those five areas in more detail.
Red flags that can signal risk
Documentation. Compliance, risk and operations leaders at customs brokers should watch out for:
- Missing details on applications and forms
- Conflicting information across forms and documents
- Unwillingness to provide documentation, or an importer insists that requested documents do not exist
- Inconsistent addresses and/or business names
Customs brokers are busier than ever, and it is easy to miss things when onboarding an importer. Sometimes, noticing small inconsistencies opens the door to reveal larger problems. For example, an importer listing different employer identification numbers (EINs, or federal tax identification numbers) for a single address is unusual. In one case, an importer’s documentation listed 50 different EINs. All those numbers were found through a Google Maps search to connect to the same address, which turned out to be a house. Several customs brokers had failed to ask why and look deeper.
A critical document for customs brokers to check is the importer’s power of attorney (POA). The CBP requires brokers to validate the POA, as well as its grantor’s identity and legal authority to enter into that arrangement. Brokers should confirm the POA grantor has a current, non-expired government ID, and verify who is signing the documents.
Financial. Financial data from an importer is a major indicator of risk. Things to watch for include:
- Reluctance to share financial information
- Dun & Bradstreet (D&B) reports, credit reports, Standard & Poor’s ratings
- Use of multiple banks and financial institutions
- Requests for payment extensions
- Requests to bill unrelated third parties
- Evasive payment methods or arrangements
- Trade-based money laundering warning indicators
Banking practices can clearly indicate problems. An importer that acts evasively about how its business is arranged, or that uses unusual payment processes, may signal higher risk. D&B reports can indicate whether a company is paying its bills.
Trade-based money laundering is a CPB priority issue. Warning indicators include: method of payment; inconsistencies in value on the bill of lading and how it’s billed; jurisdictions that seem odd or could be risky; inconsistent commodities, such as food products and technology; size or characteristics of shipments; high-risk commodities; and illogical shipping routes. A prudent rule of thumb for customs brokers is, if an importer’s activity doesn’t make sense, ask questions.
Regulatory and compliance. Regulatory history matters, as past compliance problems could suggest future trouble. Brokers should look for:
- Prior CPB violations, fines, claims, unpaid duties
- Non-compliance violations
- Prior misclassifications
- License revocation, such as under the Federal Motor Carrier Safety Administration (FMCSA)
- Undervaluation, particularly in transactions involving delivered duty paid (DDP), non-resident importer (NRI) and related parties
- Transshipment
Customs brokers should inquire whether the importer has had issues with the CPB, such as detentions and seizures of imported goods, or commodities that lack the proper licensing.
Transshipment should trigger additional questions for a broker. Stops in intermediate countries are not necessarily concerning, but the main issue is a shipment’s country of origin. CPB wants exporters to be aware of diversion risks through shipment. CPB is seeking to impose 40% transshipment tariffs.
Brokers and their sureties have a shared interest in minimizing claims and losses. This makes ongoing monitoring of importer relationships important for each of them. A non-compliant importer can harm a customs broker’s reputation and business. Continued vetting, and periodic re-vetting, of importer clients is necessary to ensure compliance.
Behavioral. Some red flags appear outside of documented activity. Those are human behaviors, patterns that suggest someone is hiding something. Activities to watch for and dig deeper on include:
- Frequent broker hopping
- Evasive communication
- Pushback on questions regarding value and classification of goods, country of origin and manufacturer details
- Pressure to clear entries quickly and/or with missing details
- Withholding of details of supply chain
- False information reporting (a violation of 19 CFR 111.32)
- Advice to client/corrective action (a violation of 19 CFR 111.39)
Customs brokers already are aware of the obligations CFR 111 impose on their business operations, but CPB also suggests CFR 111 is a red flag. For example, 19 CFR 111.32 requires a broker to provide notification if an importer client is providing false information or asking the broker to commit fraud; the law requires brokers to explain why they separated from an importer. 19 CFR 111.39 requires brokers to put anomalies and errors in writing, so CPB has a record of them.
High-risk commodities. Customs brokers should pay attention to:
- Importers handling goods that have high security risks, pose safety threats, or tend to be misclassified
- High-value goods imported with little to no prior experience
- Unusual volumes for new importers
- CBP priority trade issues (PTIs), such as intellectual property rights, agriculture and quota, import safety, textiles and apparel, and trade agreements
- Trade remedies and anti-dumping and countervailing duties
- Partner government agencies, as some goods have additional regulatory supervision
Examples of high-risk commodities that should lead to additional questions from customs brokers include: a new importer that is suddenly handling high volumes of solar panels, or an experienced importer that begins handling goods it never moved before. Brokers should make sure importers are aware of risks in their supply chains.
When in doubt, ask
The stakes are high for customs brokers in this era of regulatory enforcement and trade uncertainty. Even though customs brokers are responsible only for reasonable supervision and control, brokers can be at risk if they fail to ask questions. Asking an importer client for additional information can be the fastest way to uncover issues and prevent those from becoming bigger problems later. Importer vetting therefore should be an ongoing process, and that means re-vetting existing importer clients. The red flags explained above are not compliance checklists. Rather, they are intended to inform risk prevention and prompt additional due diligence. Relationships are foundational in global trade. Strong partnerships between customs brokers and sureties go a long way toward reducing exposure to financial loss, bond claims and reputational damage.
For more information, watch our webinar on “Importer Vetting in a Modern Compliance Environment: Protecting Brokers, Bonds & Reputations.”
Disclaimer: This information is provided as a public service and for discussion of the subject in general. It is not to be construed as legal advice. Readers are urged to seek professional guidance from appropriate parties on all matters mentioned herein.
