A penalty notice used to be an opening bid. U.S. Customs and Border Protection (CBP) would assess it near the statutory maximum, a broker or attorney would file a petition, and the number would come down — often most of the way down, sometimes to a few hundred dollars on a five-figure assessment. That negotiation is where compliance departments spent their energy, because that was where the outcome actually moved.
As of September 1, 2026, it moves a lot less.
What Changed
On June 3, 2026, President Trump signed Executive Order 14411, Strengthening Customs Enforcement, and gave CBP 90 days to rewrite its penalty mitigation guidelines. That window closed on September 1. The guidelines that came out of it set a minimum penalty floor of 50 percent of the assessed amount, with the only carve-out reserved for exceptional circumstances tied to national security. A minimum liquidated damages floor came with it, raising the baseline cost of a bond claim tied to noncompliance.
The second change is the one worth reading twice. Mitigation is eliminated entirely for repeat offenders. An importer with a prior violation on record gets no reduction on the next one, regardless of how minor the second violation is or how well the business cooperates.
The Old Math, and What Replaces It
Under the old guidelines, a penalty for negligence could be mitigated down toward a small fraction of the assessed value once contributory error, voluntary disclosure, or prompt remedial action were on the record. That's the arithmetic every trade compliance team learned: the assessed number was rarely the number anyone actually paid.
A 50 percent floor changes what a mitigated outcome is worth well before it changes what gets assessed. Move from negligence to gross negligence and the assessed base already doubles; apply a floor to whatever that base turns out to be, and the gap between a good petition and a bad one narrows a lot. The petition still matters. It no longer does the work it used to.
Why Prior Disclosure Just Got More Valuable
CBP has always given a materially better outcome to importers who disclose a violation themselves, before the agency finds it. That gap between disclosed and discovered is now wider, because discovered means a penalty proceeding governed by the new floor, and disclosed still runs through the more favorable framework for voluntary tenders.
The decision most importers face is no longer disclose-or-wait. It's disclose-or-accept-that-waiting-now-costs-more. Once a violation is on the compliance record, it doesn't just cost this penalty — under the repeat-offender rule, it removes mitigation from the next one too, whatever that next one turns out to be.
It's Not Landing in Isolation
The penalty floor is one piece of the same enforcement order behind CBP voiding importer of record (IOR) numbers over inaccurate Form 5106 data, and the proposal to collect suppliers' export paperwork alongside the importer's own filing. CBP's audit recoveries were already climbing fast before any of EO 14411's provisions took effect — from $117.7 million in fiscal 2024 to $235.46 million in fiscal 2025, with the first seven months of fiscal 2026 alone bringing in $182.22 million across 181 audits, more than $1 million per audit. Add a 50 percent floor and no mitigation on repeat findings, and an audit that used to end in a manageable fine now carries materially more downside — and a second one carries more than that.
What to Do Now
Pull your own compliance history first. If there's a prior penalty or a prior disclosure on file anywhere in the business, that record now determines the ceiling on every future case, not just the one it came from. Know it before CBP raises it.
Then look at whether a documented compliance program actually exists in writing, separate from the people who currently know how things are done. Reasonable care is still a defense to culpability in the first place, and it's far easier to demonstrate with written procedures and a record of internal review than with an explanation after the fact. That evidence has to already exist by the time a penalty notice arrives; it can't be produced in response to one.
The Moral
Mitigation was never a right, but for two decades it behaved like one — predictable enough that a penalty notice was the start of a negotiation rather than a bill. CBP has just made clear that the negotiation now has a floor, and that the floor gets steeper the second time your name comes up.
The importers least affected by this won't be the ones with the cleanest operations. They'll be the ones who already knew where their exposure was before CBP went looking.
This is general commentary, not legal advice. Penalty and disclosure decisions turn on specific facts and should be made with qualified customs counsel.
If CBP opened a file on your business tomorrow, would you know — before they told you — what it would find?