Global Entry with Thomas Taggart – a bi-weekly column about navigating global trade, e-commerce and compliance in a changing world
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After years of operating quietly in the background, the U.S. Nonresident Importer Program is suddenly in the spotlight. Once a little-known mechanism for enabling foreign entities to import goods without a US presence, non-resident Indians have become a flashpoint in trade policy — especially as the United States clamps down on small duty-free shipments and intensifies tariff enforcement.
For e-commerce brands and global merchants alike, the rules of engagement have changed. Understanding how the NRI framework works—and how it is evolving—is now critical to maintaining access to the US market.
From regulatory footnote to policy flashpoint
The NRI framework, created by the Tariff Act of 1930, has long allowed foreign companies to operate as an importer of record (IOR) without establishing a U.S. entity. Historically, it served traditional business-to-business trade: a foreign company could import by appointing a US-based agent and sending customs bonds – procedural steps, not political disputes.
This has all changed with the advent of cross-border e-commerce. What was once a niche mechanism has become a mainstream strategy as online shopping accelerates globally. Millions of foreign traders have adopted NRI status to sell in markets and hold unsold inventory in the United States
Amazon FBA and the Rise of the Foreign Seller
The Amazon Fulfillment by Amazon (FBA) program has transformed NRI from a technical footnote to a mass market enabler. FBA created opportunity and necessity: To reach major customers with express delivery, foreign sellers needed to pre-position inventory in American warehouses. But Amazon does not act as a registered importer, this responsibility falls on the seller.
Enter the NRI solution. By obtaining a CBP-assigned importer number and a surety bond, foreign sellers can import inventory into U.S. fulfillment centers – without forming a U.S. entity or maintaining local assets. Today, sellers in China and Hong Kong are estimated to make up more than 60% of all third-party sellers on Amazon.
This boom has also fueled an entire ecosystem of services: bundled “FBA Importer Packages” offering NRI preparation, resident agent services, surety bonds, and customs filings marketed directly to global merchants. For many Chinese sellers, the path from the factory floor to the Amazon warehouse has become significantly streamlined.
At the same time, the increase in 2016 in minimum The $200 to $800 threshold — and the introduction of Type 86 entries in 2019 — opened the door to another increase in direct-to-consumer shipments. Platforms like Shein, Temu, and AliExpress have built business models around duty-free entry, accounting for an estimated 30%+ of all low-value parcel shipments in the US by 2022.
But with minimum With the program now suspended, these models are in crisis — and the NRI system is under renewed scrutiny as an alternative solution for foreign traders to evade US tariffs.
Minimums expire, tariffs rise, and scrutiny increases
On August 29, 2025, an executive order was issued to suspend work minimum Treatment for all countries. Overnight, every incoming package – regardless of value – now requires a full customs entry and payment of duties. For millions of foreign traders, the door to bypassing customs clearance has effectively closed.
At the same time, tariffs are rising sharply: reciprocal duties between 10% and 41%+, plus additional Sections 301, 232, and 201, and antidumping/countervailing duty measures. CBP audits have increased more than 150% year-over-year, with increasing interest in undervaluation, misclassification, and transshipment.
The convergence of these pressures has forced thousands of foreign sellers to seek alternative import routes – with often questionable results.
Solutions: “Modified DDP” and compliance risks
As fees and censorship rose, a parallel market of alternative solutions emerged. Some third-party suppliers now offer shipping on a “delivery paid” (DDP) basis an average DDP terms, effectively acting as the importer of record through NRI status.
In these arrangements, the foreign manufacturer—not the U.S. trader—declares the import value to customs, which is often much less than the true transaction value. Some industry executives estimate that “adjusted DDP” transactions now make up nearly 10% of total U.S. imports.
While they are marketed as convenience and cost savings, the risks are real. When customs duties are understated or declarations are falsified, liability can extend to the US buyer. Customs and Border Protection and the Department of Justice have warned that US companies will not be immune from enforcement simply because their suppliers “import handle.”
In short: When a deal seems too easy, it usually is.
Collection crisis
At the heart of Washington’s anxiety lies one word: Collectability — CBP’s ability to recover unpaid duties and penalties from foreign importers with limited or no presence in the United States.
When a U.S. company defaults, CBP can seize assets, pursue claims, or collect funds through domestic legal channels. But with NRIs, the options are limited: the bond is the only real security, and resident agents are not financially responsible.
The math doesn’t work. A foreign trader who imports $1 million worth of goods at a 50% tariff owes $500,000 in customs duties—ten times the $50,000 bond minimum. If they default, the guarantor only pays that bond limit, leaving the rest uncollected. CBP has documented cases of “ghost importers” who ran up debts, resolved them, and then reappeared under new names.
Loose frame by design
The US NRI model is characterized by its permissiveness. In contrast to the United Kingdom and the European Union, which require a jointly responsible “indirect representative” with a physical market presence to share financial responsibility for customs debts, the United States relies solely on importer bonds. Brokers act as agents, not guarantors.
This structural gap is now at the heart of the proposed reforms. Lawmakers argue that the absence of a jointly responsible representative has enabled undercapitalized foreign sellers to operate in the U.S. market with little accountability — leaving CBP with limited avenues for redress when duties are not paid.
Legislative and industrial decline
Reform is gaining momentum between both parties. the Equal Opportunity Act 2.0 (H.R. 1548/S.691)introduced earlier this year, would require NRIs to hold sufficient US assets to cover potential duty liabilities and post enhanced bonds – with exemptions for C-TPAT Tier 2/3 participants. Violations can result in penalties of up to $50,000 per shipment or 50% of the shipment value.
Separately, Senator Bill Cassidy is considering legislation that would go further, seeking to eliminate non-resident Indian eligibility for most foreign traders except for those in Canada. Trade groups such as the Alliance for Trade Enforcement are also urging the United States to end NRI licensing altogether and require registered domestic importers or joint liability structures.
Comment August minimum The concessions have amplified these calls, revealing how deeply entrenched foreign NRI operations are now in US e-commerce – and how fragile the current system is.
Pathways forward for foreign sellers
For legitimate traders and platforms, adaptability is key. There are several practical paths:
- Use the record importer service: Partnering with a licensed IOR service provider adds cost but provides smoother accountability and compliance.
- Benefiting from loyalty within the country: In addition to the IOR service, you can import inventory in bulk into US warehouses, paying customs duties at the cost of goods instead of retail prices to reduce per-unit costs. Research shows that 94% of e-commerce leaders plan to expand fulfillment within the country within five years.
- Join Trusted Trader Programs: C-TPAT certification and similar initiatives may provide safe harbors under future legislation and demonstrate a proactive stance on compliance.
The new reality
The NRI pipeline that has helped fuel the growth of global e-commerce has not closed yet – but it is narrowing. The United States is shifting from permissive growth to accountability and enforcement.
Foreign sellers, especially those they previously relied on minimum Lean import programs face new complexities and costs. But those who view compliance as an investment – not an obstacle – can turn this moment into a competitive advantage.
The door remains open to American consumers. It’s no longer frictionless.
Author biography
Thomas Taggart is Vice President of Global Commerce at Passport, a leading global provider of e-commerce solutions that helps brands like Ridge, HexClad and Wildflower Cases expand globally through cross-border shipping, expert compliance support, and in-country enablement services. To learn more about the passport, visit Passportglobal.com. Going Global with Thomas Taggart is a bi-weekly column in World Trade magazine covering the strategies, regulations and ideas shaping the future of cross-border trade.
