Self-Assessment Tools

DOL launched four voluntary self-assessment tools that provide practical, user-friendly guidance to help companies map supply-chain risks and evaluate labor practices. The tools can also guide companies in taking steps to ensure alignment with U.S. forced labor laws and strengthen supply chains that support American workers and American industry.

The new tools are: 

• LaborShield: A mobile app that features information on egregious labor violations in over 145 countries (formerly the Sweat and Toil app).
• ImportWatch: A resource that brings together the department’s labor abuse research with U.S. import data from the U.S. Census Bureau to produce a red-flag list of all high-risk goods for U.S. importers.
• SourcingStrong: A tool to help U.S. businesses build strong labor due diligence systems to identify and manage risk in their supply chains.
  
• Supply Chain Traceability Portal: The portal provides visibility across supply chains and beyond the first tier to expose where exploitative labor hides.

Announcement Insights 

Diaz Trade Law was in attendance at the launch event in Washington, D.C. – hosted by the DOL and co-sponsored by the Responsible Business Alliance. The program featured remarks from Deputy Secretary of Labor Keith Sonderling, followed by a fireside chat with top executives from leading U.S. industries.

At the event, DOL representatives stated the department wants “good actors” to use these tools and to give feedback on them. Panelists highlighted that they have been engaging with DOL for years on the issues of forced labor in foreign supply chains. DOL’s stated goal is to level the playing field for U.S. businesses by making foreign actors play fair.

Forced Labor Enforcement Focus

DOL, among other government agencies, have made clear that enforcement of the U.S.’s forced labor laws is a priority. 

For importers, understanding who is supplying you with a product is not enough, you also need to know who is supplying them. You should have a comprehensive understanding of your supply chain that includes documentation of the various tiers of suppliers. Detailed documentation can help identify gaps and high-risk areas that may need to be revisited down the road.  

Diaz Trade Law has significant experience in a broad range of import compliance matters including forced labor compliance and enforcement mitigation. For assistance with developing or updating a forced labor compliance plan, forced labor compliance training, communicating with CBP regarding goods detained by CBP, or utilizing the new DOL tools contact us today at info@diaztradelaw.com or 305-456-3830.

Learn more:

• Webinar: Forced Labor – Practical Tips to Secure Your Supply Chain and Comply with Regulatory Requirements
• Breaking the Chains: Forced Labor in Mexico’s Supply Chains
• CBP Launches New Forced Labor Portal 
• Bloomberg Law: U.S. Customs Targets the Use of Forced Labor
• UFLPA Guidance: What Importers Need to Know
• Uyghur Forced Labor Prevention Act (UFLPA): What You Need to Know
• CBP’s Forced Labor Process Flowchart

Jennifer Diaz, President, Diaz Trade Law

Amber Pirson, Attorney, Diaz Trade Law

FinCEN’s March 30, 2026, Notice of Proposed Rulemaking (NPRM) marks a major step toward fully operationalizing the agency’s whistleblower program, designed to incentivize reporting of Bank Secrecy Act (BSA), sanctions, IEEPA, and other illicit finance violations. The proposal outlines how whistleblowers can securely submit information, how awards will be determined, and what protections will be available.  

This development reflects the Treasury Department’s broader strategy to strengthen financial system integrity and encourage actionable tips that support enforcement efforts. For financial institutions, compliance professionals, and potential whistleblowers, the NPRM provides long‑awaited clarity on program structure and expectations. 

Overview of the Proposed Rule 

FinCEN’s NPRM proposes a comprehensive framework for administering whistleblower submissions and awards. Key elements include: 

• Secure submission procedures for individuals reporting suspected violations of the BSA, OFAC sanctions, and related laws. 
• Eligibility criteria for whistleblower awards, including documentation requirements and timelines. 
• Award ranges of 10–30% of monetary penalties collected when a whistleblower’s information leads to a successful enforcement action. 
• Robust protections for individuals who provide information, including confidentiality and anti‑retaliation safeguards. 

These provisions aim to encourage early, detailed reporting while ensuring whistleblowers are shielded from adverse consequences. 

Why FinCEN Is Prioritizing Whistleblower Incentives 

The NPRM aligns with Treasury’s broader efforts to combat fraud, sanctions evasion, and illicit finance. On the same day, FinCEN issued an advisory highlighting how transnational criminal organizations exploit federal and state health care programs—underscoring the need for timely, credible tips from insiders. Treasury Secretary Scott Bessent emphasized that whistleblowers play a critical role in protecting U.S. national security and ensuring taxpayer funds are not diverted to criminal activity. 

By formalizing award structures and protections, FinCEN seeks to increase the volume and quality of reports that can lead to enforcement actions. 

What Financial Institutions Should Know 

Financial institutions should closely review the NPRM and consider how it may affect internal compliance programs. Key considerations include… 

• Enhanced reporting expectations: Institutions may see increased whistleblower activity and should ensure internal reporting channels are well‑defined. 
• Documentation and recordkeeping: Detailed records may become even more important as whistleblower tips could trigger investigations. 
• Training and awareness: Employees should understand both internal reporting options and the existence of FinCEN’s external whistleblower portal. 

FinCEN encourages public comments within 60 days of the NPRM’s publication in the Federal Register. The official notice is available here. 

Whistleblowing and IEEPA 

While the proposed rule offers rewards for reporting fraud-related violations of IEEPA, it is unclear whether FinCEN will consider reports of unpaid IEEPA duties to be valid claims of fraud. Given the U.S. Supreme Court’s ruling, which determined that President Trump’s use of IEEPA to impose tariffs was unlawful, companies subject to such whistleblowing reports may have a strong claim of defense.   

Final Thoughts: Take Action Today! 

FinCEN’s proposed whistleblower framework represents a significant shift in how illicit finance violations may come to light. Financial institutions, compliance officers, and legal practitioners should proactively assess the NPRM’s implications and prepare for increased scrutiny and reporting activity. If your organization needs guidance navigating BSA/AML obligations, whistleblower‑related risks, or comment submission strategies, Diaz Trade Law is ready to assist with FinCEN compliance. 

Learn more: 

• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement 
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ 
• BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations 

Jennifer Diaz, President, Diaz Trade Law
Amber Pirson, Attorney, Diaz Trade Law

On April 2, 2026, the President issued a proclamation strengthening Section 232 actions to adjust imports of aluminum, steel, and copper, continuing to cite national security concerns and the need to reinforce domestic metals industries. 

Key elements include: a tiered tariff structure and some products exempt from Sec. 232 tariffs, effective at 12:01 am on April 6, 2026; and manufacturing drawback claims.  

Generally, tariffs will be assessed to the full value of imported products, “regardless of their metal content,” with reduced rates for certain products from the United Kingdom (UK) and the same 200% ad valorem duty for subject metal articles from Russia. 

• Aluminum and steel articles, most copper articles, and certain derivative articles of aluminum and steel…  
  • 50%, unless either the 25% or 10% rates listed below can apply. 
    • 25% for UK products, the aluminum content of which is composed entirely of aluminum that was smelted or most recently cast in the UK, or the steel content of which is composed entirely of steel that was melted and poured in the UK. 
    • 10% for derivative articles, steel or copper content, when the metal content was smelted and cast in the U.S. 
• For certain copper and aluminum or steel derivative articles (Annex I-B)…  
  • 25%, unless either the 15% or 10% rates listed below can apply. 
    • 15% for aluminum or steel products of the UK, if smelted and cast or melted and poured in the UK. 
    • 10% for steel or copper content, when the metal content was smelted and cast in the U.S. 
• For imports listed in Annex III to this proclamation, and entered between April 6, 2026, and December 31, 2027… 
  • Rate determined by the product’s current ad valorem duty under Column 1, unless the 10% or 25% rate listed below can apply. For Column 1 duties < 15%, the additional Sec. 232 duty must be such that the sum of both is 15%. For Column 1 duties ≥ 15%, the additional Sec. 232 duty is 0%.  
    • 10% for derivative articles or steel content, when the former was smelted and cast in the US or when the latter was melted and poured in the US. \
    • 25% for imports from trading partners without normal trading relations with the U.S. (i.e., Cuba, North Korea, Russia, Belarus).  
• For imports listed in Annex III to this proclamation, and entered on or after January 1, 2028… 
  • The rate schedule applied to products listed in Annex I-B 
• Additional product-specific rules for articles or derivatives of more than one metal.  

Products Exempt from Sec. 232 Steel and Aluminum Derivatives 

• Certain items under the following chapter headings, including certain motorcycle parts: 2, 21, 27, 28, 29, 30, 32, 33, 34, 35, 38, 39, 73, 84, 85, 87, 94, and 95. (Annex II) 

Manufacturing drawback claims are available for articles that meet the following four criteria: 

• Those classifiable in an HTS listed in Annex I-B or Annex III, or later determined by the Secretary and the Trade Representative; 
• Not subject to an antidumping or countervailing duty order; 
• A product of Trade Agreement Partners (TAP), which is composed of the United Kingdom, the European Union, Japan, the Republic of Korea, Mexico, Canada, and any trading partner with which the United States concludes a final Agreement on Reciprocal Trade; and 
• The aluminum and copper were smelted and cast, and the steel was melted and poured in a TAP country.  

On April 3, 2026, CBP issued guidance providing instructions for submitting entries to CBP on certain steel, aluminum, and copper articles and their derivatives. See here.

See annexes here. 

View the guide for navigating new Chapter 99 Headings here. 

Learn more: 

• Section 232 Valuation in a Gray Area: What Importers Need to Know 
• ICYMI: BIS Initiates 232 Investigations of UAS and Polysilicon Imports 
• Reminder: New Section 232 Duties on Certain Steel and Aluminum Products from Mexico 
• Tariffs and Trade Deals – Comprehensive Resource 

In January of this year, CBP quietly released a ruling (January 16, 2026/CEE.HQ H350722) that demarcates clear boundaries of where AI is permitted to facilitate Customs filings and where such artificial tools cross the “human-brokers-only” line.  

Case Background 

A foreign “Unlicensed Company” was operating an online platform and marketing to importers without seeking approval or a license from CBP. This platform offered four key services: 1) connecting importers to brokers, 2) utilizing an optical character recognition (OCR) tool to cull entry data from shipping documents, 3) generating HTSUS subheading suggestions for specific articles, and 4) submitting CBP Form 5106 on behalf of new importers. The question before CBP was whether the company was conducting customs business without a license. 

CBP Ruling 

In its ruling, CBP stated that the definition of “customs business” is quite broad. To that end, developers could accidentally create agentic parameters that trespass the bounds of what it means to engage in “customs business.” Here are some key takeaways from the ruling: 

1. “CBP cautioned that an unlicensed entity may not serve as an intermediary between a broker and importer if the unlicensed entity is actively participating ‘in decisions and activities relating to the preparation or filing of Customs documents for imported merchandise, or relating to any other action amounting to customs business.’” However, since the “Unlicensed Company was not actively participating in deciding what information must be transmitted to a broker for entry purposes, nor participating in the transmission of such documents and data to CBP, the Unlicensed Company is not impermissibly conducting customs business.”
2. “Whether data is extracted manually or automatically through an OCR tool, CBP has repeatedly held that an unlicensed entity cannot decide what data should appear on an entry.” Even if “the Unlicensed Company instead contracted to utilize an OCR tool developed by another unlicensed entity as part of the Unlicensed Company’s online platform,” CBP would find it impermissibly conducting customs business.
3. An unlicensed entity, which may incorporate an AI tool, cannot derive the HTSUS “subheadings beyond the six-digit level,” as a customs broker’s license is generally required in those instances (i.e., classification information will or may eventually be used for an entry). However, “if the Unlicensed Company’s AI classification tool only derives potential HTSUS subheadings to the six-digit level, then customs business is not being conducted.”
4. Since the preparation and electronic transmission of documents, intended to be filed with CBP, is part of the statutory definition of “customs business,” then “only a licensed customs broker may complete and submit CBP Form 5106 on behalf of another party.” 

While the identity of the company remains undisclosed, we know that other AI agents currently under development and designed to automate the highly complex arena of imports will now be far more limited than they previously envisioned. CBP has defined the new digital trade world order: AI can connect humans to humans, but it cannot replace U.S. brokers – either in their administrative or analytical capacity. 

Contact Diaz Trade Law for Assistance with CBP Compliance 

Many companies offer import-related services, but not all of them are trustworthy or experts in customs law. At the end of the day, if you import products into the U.S., YOU are the responsible party. Who do you have in your corner helping ensure you are compliant with Customs’ vast laws and regulations? Diaz Trade Law can help you navigate the complex web of CBP regulations and ensure your business remains compliant. Contact us at info@diaztradelaw.com or 305-456-3830. 

Learn more: 

• Bloomberg Law: Import Compliance & Training Programs 
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices 
• Webinar: Building and Maintaining an Effective Import Compliance Plan 
• Bloomberg Law: What is an Importer’s Reasonable Care Standard? 
• Webinar: Importing 101 – Introduction to U.S. Customs 

What Is the Recordkeeping Compliance Program?

U.S. Customs and Border Protection (CBP) requires importers to maintain and produce specific records related to their entries. Under 19 C.F.R. § 163.12, CBP offers a Recordkeeping Compliance Program—a voluntary and free certification program designed to help importers strengthen their internal controls, improve record management, and demonstrate a proactive commitment to compliance. 

At its core, the program allows importers to work collaboratively with CBP to ensure they understand their obligations under the Customs Modernization Act (Mod Act) and are equipped to meet them. Certification signals that an importer has established reliable procedures for maintaining, retrieving, and producing required entry records. 

What Are the Benefits of the Program?

Participating in the Recordkeeping Compliance Program offers several meaningful advantages:  

• Reduced Exposure to Penalties 

Certified importers may receive mitigation benefits if they inadvertently fail to produce certain records. CBP recognizes that certified companies have invested in compliance infrastructure and may treat isolated lapses more leniently. 

• Stronger Relationship With CBP 

Certification demonstrates good faith and transparency. Importers who demonstrate that they take compliance seriously often experience smoother interactions with CBP, including during audits, inquiries, and enforcement actions. 

• Improved Internal Controls 

The certification process requires importers to evaluate and document their recordkeeping systems. This often leads to better data integrity, more efficient retrieval processes, and stronger oversight of brokers or supply chain partners. 

• Enhanced Audit Readiness 

With structured procedures in place, certified importers are better prepared for focused assessments, regulatory audits, Requests for information (RFIs), or entry document demands. 

While certification offers meaningful advantages, it is not a shield against enforcement. CBP makes clear that certain failures can still trigger penalties—even for certified importers. 

Notable Limitations

Certification does not excuse importers from statutory recordkeeping obligations under 19 U.S.C. § 1508 and § 1509. 

• Willful failure to produce demanded entry records may result in penalties under 19 C.F.R. § 163.6(b). 

• Repeated failures—even if not willful—can also lead to penalties. 

CBP may remove an importer’s certification if the company does not take corrective action that satisfies the agency. In other words, the program rewards good‑faith efforts, but it does not eliminate accountability. 

Who May Apply? 

The program is open to importers of record who are willing to demonstrate that they have the systems and controls necessary to meet CBP’s recordkeeping requirements. 

Applicants must submit a written request to CBP that includes: 

• A description of the importer’s recordkeeping system 

• Identification of responsible personnel 

• An outline of internal controls and retrieval procedures 

• A commitment to maintain compliance and cooperate with CBP 

CBP may conduct interviews, request documentation, or perform site visits to verify the importer’s capabilities before granting certification. 

What Are the Program’s Certification Requirements?

To become certified—and remain certified—importers must meet several key requirements. Importers must maintain written procedures that describe how records are created, stored, and retrieved, who is responsible for maintaining them, and how the company ensures accuracy and completeness. Additionally, CBP expects certified importers to be able to produce demanded entry records within the required timeframes. This typically means centralized storage systems, reliable digital or physical archives, and clear retrieval workflows. 

Importers must also identify individuals responsible for overseeing recordkeeping, responding to CBP requests, and ensuring ongoing compliance. Once your procedures are in place, CBP looks for evidence of internal controls, which includes periodic self‑reviews, broker oversight, corrective action processes, and training programs for relevant staff. However, certification does not relieve importers from updating CBP on subsequentprocedural changes, which – in some cases – requires importers to explain procedural deficiencies.  

Final Thoughts: Sign Up Today! 

Recordkeeping obligations under U.S. Customs law are deceptively complex, and even a single lapse in records can expose your company to penalties, shipment delays, and reputational harm. The Recordkeeping Compliance Program is a powerful opportunity to strengthen your compliance posture — but only when approached strategically, proactively, and with a clear understanding of CBP’s expectations. 

At Diaz Trade Law, we regularly help importers: 

• Evaluate whether the Recordkeeping Compliance Program is the right fit 

• Prepare strong, complete certification submissions 

• Communicate effectively with CBP throughout the review process 

• Build or enhance internal controls to ensure long‑term compliance 

If you’re considering applying for certification — or if CBP has requested records and you’re unsure how to respond — contact us before taking your next step. Acting early gives you more options, more flexibility, and a far better chance of achieving a favorable outcome.

Learn more:

• Bloomberg Law: CBP Recordkeeping Requirements – Retention, the (a)(1)(A) List, and More
• Bloomberg Law: Import Compliance & Training Programs
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices

What Can the USTR Do? 

Section 301, formally known as Title III of the Trade Act of 1974 or “Relief from Unfair Trade Practices,” authorizes the USTR to investigate acts, policies, or practices that it considers unreasonable, discriminatory, or burdensome to US commerce. The USTR goes on to say that practices which permit forced or compulsory labor meet the criteria of unreasonable, unfair, and inequitable. If the USTR concludes that an act is “unjustifiable” and “burdens or restricts” US commerce, action is mandatory. On the other hand, if the USTR determines that such act is only “unreasonable or discriminatory” and “burdens or restricts” US commerce, action is discretionary. In either case, when the USTR aims to remedy a foreign trade practice, the agency can (1) impose tariffs or other import restrictions, (2) withdraw or suspend trade agreement concessions, or (3) enter into a binding agreement with the foreign government to either cease the conduct in question or compensate the US. Additionally, the statute requires that when USTR’s action is mandatory, the agency’s action should “affect goods or services of the foreign country in an amount that is equivalent in value to the burden or restriction being imposed by that country on U.S. commerce.” 

The Government’s Rationale to Investigate 

According to the USTR, this investigation is necessary because “ending forced labor is a key priority and an economic and national security imperative for the United States.” The background provided by the agency also cited numerous statistics that reveal millions of people globally are in forced labor schemes. USTR then outlined how firms using forced labor harm US commerce and competitiveness: 1) selling goods at artificially low prices, and 2) pushing firms not using such labor practices out of the marketplace. The agency also noted that US exports are required to compete with products made with forced labor and are consequently less successful in markets that lackforced labor import prohibitions.  

Sectors, Goods, and Countries in Scope 

The USTR identified the agricultural and industrial sectors as arenas where forced labor is most profitable. However, the agency also called out specific items from the Department of Labor’s 2024 List of Goods Produced by Child Labor or Forced Labor (“TVPRA List”), typically composed of inputs produced with forced labor: garments, textiles, critical minerals, fish, and palm fruit. In addition to the countries identified on the TVPRA List, the USTR listed 60 countries under investigation, most notable of which include Australia, Canada, the European Union (EU), Israel, Japan, Norway, Singapore, South Korea, Switzerland, and the United Kingdom.  

While the USTR recognized Canada, Mexico, and the EU’s efforts to adopt measures “intended to stop the importation or sale of products produced using forced labor,” the agency claims “none of these countries [have] adopted and effectively enforced a forced labor import prohibition to date.” In other words, the statutory ban on forced labor domestically, as seen within US-allied countries, is insufficient to prevent global businesses from profiting off forced labor in third countries. 

Looking Ahead & What This Means for Global Businesses 

Over the past eight years, Section 301 has been a tool wielded by the USTR to retaliate against globally recognized trade competitors, such as China, for discriminatory practices like intellectual property rights violations. However, the current investigation illustrates a pivot by the Trump administration to use all tools at its disposal to replace the global reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA). While the language used to classify forced labor as a threat to US commerce would fall within the “discretionary action” category, the administration’s comments prior to publishing the investigation indicate that it will act to impose some form of import restriction (i.e., tariffs) at the conclusion of this investigation. These tariffs will likely “replace” the Section 122 tariffs upon their 150-day expiration.  

While the statute does not impose a fixed timeline for USTR to conclude a Section 301 investigation after written comments, public hearing, and post-hearing rebuttal, these investigations usually take between 6-12 months to complete. Given the impending expiration of Section 122 tariffs, we expect this investigation’s timeline could be much shorter.  

The deadline to submit written comments is April 15, 2026.  

The Section 301 Committee will convene public hearings in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, on April 28, 2026, beginning at 10:00 a.m., continuing, as necessary, until May 1. 

If you would like to comment on this investigation or attend a public hearing, contact Diaz Trade Law today. We have helped numerous entities and individuals participate in the federal rule-making process and would be happy to help you as well.  

The CIT Order

In the order, Judge Eaton clearly stated that the court has jurisdiction under 28 U.S.C. § 1581(i), the CIT has national jurisdiction and the ability to issue a broad order, that he is the judge to whom all IEEPA refunds have been assigned, and that he views the facts and law as clear. It is not clear whether he is also ordering the refunds for everyone else not in court, which will unquestionably be further litigated. 

We note that in response to written questions from the court, U.S. Customs and Border Protection stated that they were continuing to liquidate entries with IEEPA duties if they were deposited at the time of entry, that they were not issuing refunds, and that they had not issued instructions to liquidate without IEEPA duties. They further stated that any refunds will require a review to determine if there was a violation of other customs laws or if other duties, taxes, and fees were still owed. In other words, CBP intends to conduct detailed reviews of all entries before issuing refunds. The responses provided by CBP to the Judge were reviewed by the Judge and likely resulted in his rather strongly worded order. 

We anticipate a prompt filing of an appeal of this order to the Court of Appeals for the Federal Circuit (CAFC), challenging both the broad nature of the relief and the potential applicability to parties not currently in court. We believe that the CAFC will set an expedited briefing process for this appeal, and we also anticipate that the United States will seek to have this order reviewed by the Supreme Court, but at least with respect to parties in court, this will be a very weak case. 

What Importers Should Do

This order is a significant positive development and strongly suggests that the court is not going to tolerate delays for tariff refunds. Importers in court may receive refunds in a matter of months, if not weeks, rather than years, as desired by the Trump administration.  

We continue to believe that filing litigation at the U.S. Court of International Trade is the surest bet to get refunds of IEEPA duties and to get refunds quickly.

Additionally, if you are not currently enrolled in ACE and/or have not set up your ACH Refund, we highly recommend you set up an ACE Account and set up your ACH Refund application through the ACE Portal.  Once an application for ACH Refund is successfully submitted and approved in the ACE Portal, all future refunds will be issued electronically to the designated U.S. bank account.

This is a quickly moving process, and we will keep you abreast as key changes come to light.  

If you have any questions regarding any other import or export-related matter, please do not hesitate to contact our office at info@diaztradelaw.com. 

Follow our tariffs & trade deals page to keep up with the latest trade news.

Read more:

• Supreme Court Rules IEEPA Tariffs Are Unlawful
• Reminder: CBP Now Issues Refunds via ACH Through ACE
• Why You Need Your Own Ace Account
• Tariffs at the Supreme Court!
• High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk
• Bloomberg Law: Tariff Classification Basics
• ICYMI: Trump Administration Imposes 25% Steel and Aluminum Tariff
• ICYMI: President Trump Signs America First Trade Policy
• Trump Administration Announces Plan for Reciprocal Tariffs
• New Tariffs on Mexico, Canada, and China: Key Updates for Importers
• Navigating Tariff Increases: Strategies to Minimize Tariff Costs Under the Trump Administration
• Webinar: Navigating Tariff Challenges: Mitigation Tools & Tactics
• Trump Administration Announces Reciprocal Tariffs

What is the NDC?

The NDC is an FDA standard for uniquely identifying drugs marketed in the U.S. Currently, the NDC assigned by the FDA for each listed drug marketed in the U.S. is a unique 10-digit number and can be in several different formats.

Current formats:

10-digit identifier

The FDA’s standard NDC is a 10-digit numerical identifier that includes a labeler code, product code, and package code.

There are 3 FDA-assigned formats for the standard NDC:

• 4-4-2
• 5-3-2
• 5-4-1

HIPAA Format

The Health Insurance Portability and Accountability Act (HIPAA) adopted a uniform 11-digit NDC format that must be used when a HIPAA-covered transaction includes an NDC. This 11-digit format is standardized into a 5-4-2 format and created by adding a leading zero to either the labeler, product, or package code.

Upcoming 6-Digit Format

The FDA will run out of 5-digit labeler codes in 10-15 years. Per FDA regulations (21 CFR 207.33), once the FDA runs out of 5-digit labeler codes, it will start assigning 6-digit labeler codes. Without this proposed change, there would be five NDC formats, 3 in 10- digits and 2 in 11-digits. There may be confusion between an FDA-assigned 11-digit NDC and a HIPAA converted 11-digit NDC.

The New NDC Standard

The Final Rule modifies existing regulations to establish a uniform, 12-digit format that can accommodate longer NDCs once the FDA begins issuing 6-digit labeler codes.

The change will impact a variety of industries and stakeholders, including:

• Human and animal drug manufacturers and distributors
• Drug importers
• Federal agencies using the NDC
• Drug databanks
• Pharmacies
• Hospitals, clinics, labs, healthcare practitioners
• Nursing care facilities
• Electronic health record vendors
• State and local governments
• Various supply chain stakeholders

The rule change standardizes the NDC format across all sectors and minimizes confusion and medication errors.

During the seven years before the rule takes effect (March 5, 2026 – March 6, 2033), the FDA will continue to assign 10-digit NDCs in the current formats. Manufacturers, distributors, repackagers, relabelers, pharmacies, health care providers, payors, and other supply chain partners should use this time to update their systems, processes, and infrastructure to handle the 12-digit NDC format by March 7, 2033.

Diaz Trade Law will continue to monitor developments concerning this proposed rule. We provide guidance on a variety of FDA matters, including food, cosmetics, drugs, alcohol, medical devices, and more.

Learn more about FDA compliance:

• Webinar: Tips on FDA’s Medical Device Registration Process
• FDA Begins Enforcement of DUNS Number Requirement for Food Facility Registrations
• Webinar: Importing Medical Devices in Compliance with U.S. FDA
• Webinar: FDA – Is it a Cosmetic, a Drug, or Both? Mitigating FDA Enforcement Actions
• Webinar: Detentions, Warning Letters, and Import Alerts: How to Use FDA’s Databases to Perform Due Diligence
• Webinar: Getting MoCRA Compliant

The Court rejected the Trump Administration’s assertion that the statutory text of IEEPA delegates Congressional tariff powers to the President, finding that Congress would not have delegated “highly consequential power” through ambiguous language.

The majority wrote, “Based on two words separated by 16 others in … IEEPA, ‘regulate’ and ‘importation’–the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight.”

The decision was 6-3, with Justice Thomas, Alito, and Kavanaugh dissenting.

What This Means for Importers

The Trump Administration has made clear that, regardless of the Supreme Court’s decision, tariffs will remain a cornerstone of their trade and “America First” policy. 

On January 9, 2026, National Economic Council Director Kevin Hassett said of the Supreme Court case: “Our expectation is that we’re going to win, and if we don’t win, then we know that we’ve got other tools that we can use that get us to the same place.” He also said in a Fox Business Interview that the Administration has a backup plan ready to go that would allow tariffs to be put “back into place almost immediately, should the Supreme Court rule against us.”

IEEPA is just one of the legislative avenues the Administration has to impose tariffs. Below is a summary of tariff tools available to the Administration.

The Administration will almost certainly pivot to another legal authority to maintain the current tariffs. 

Because the Supreme Court has upheld the Federal Circuit’s decision, the case is remanded to the Court of International Trade to determine whether it can issue a nationwide injunction, which we hope the Court of International Trade will resolve quickly.  

Importers who have filed suit at the Court of International Trade should be eligible to get their own injunction. Further, an individual injunction may not be required, given the Supreme Court decision. The key at this moment is how the Court of International Trade will implement the Supreme Court’s decision.  

We are confident that importers who have filed suit in the Court of International Trade should be eligible to receive refunds for the IEEPA Tariffs they paid. However, the Court of International Trade will need to provide specific instructions for issuing refunds. We are actively monitoring and will advise as soon as we have more information from the Court of International Trade.  

What Importers Should Do

Importers should view the current tariff environment as a long-term reality and proactively invest in strategies that legally minimize their duty exposure. There are several ways to LEGALLY minimize tariffs, including:

• Duty drawback
• Tariff engineering
• Country of origin change
• First sale
• Duty deferral
• Negotiate DDP Incoterms

Importers should also invest in compliance. The U.S. government has signaled that enforcement of trade law is a top priority and has levied hefty fines and even initiated criminal cases against importers evading duties.

Importers should:

• Conduct internal audits
• Refresh classification procedures
• Ensure the accuracy of valuation practices
• Revisit supplier agreements
• Tighten broker oversight
• Leverage technology
• Develop training for staff
• Strengthen recordkeeping practices
• Prepare for audits

Our office will continue to closely monitor and will keep you informed. Please review the following resources to stay informed on tariff updates and jumpstart your 2026 compliance program.

• Live Resource – Tariffs and Trade Deals
• Bloomberg Law: Tariff Classification Basics
• Bloomberg Law: Import Compliance & Training Programs
• Bloomberg Law: CBP’s Recordkeeping Requirements
• Navigating Tariff Increases: Strategies to Minimize Tariff Costs Under the Trump Administration
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Diaz Trade Law can assist in auditing and/or developing importer compliance programs, setting up importer ACE accounts, and executing strategies to minimize duties. If you have questions about the IEEPA case or questions regarding any other import or export-related matter, please do not hesitate to contact our office at info@diaztradelaw.com.

Reporter Lori Ann LaRocco dives into the recent rise in customs bond insufficiency notices in her Feb. 6 article: President Trump’s tariffs fueled U.S. Customs bond market boom. Now billions hang on Supreme Court ruling.

Here are two excerpts from the piece:

“Jennifer Diaz, board-certified international attorney at Diaz Trade Law, said the number of bond insufficiency notices issued has quadrupled since 2017 and has accelerated recently due to the volatile tariff environment.”

“David Craven, counsel to Diaz Trade, said the threat of new replacement tariffs, coupled with the existing liability facing surety companies, suggests that any refunds would not be immediate. “The fact that liability has gone up, and Customs is now asking the sureties for collateral … operations are at risk, and sureties understandably don’t want to be caught holding the bag,” Craven said.”

Read the full article here.

Jennifer Diaz was also featured in a separate CNBC piece on Feb. 12: Trump tariffs leave importers with record-breaking $3.5 billion U.S. Customs bond funding shortfall.

Jen said:

“In totality, it makes sense that insufficiencies are more than double,” said Jennifer Diaz, attorney at Diaz Trade Law. “Many companies take it for granted that a $50,000 bond should be able to cover you for a one-year period,” she said. “But it might not. They are not utilizing set calculations, and don’t have anyone in their corner telling them that their bond obligation is higher.”

Read the full article here.