Expeditors International of Washington, Inc. Status update

Well, welcome to our webinar series that is hosted by the Expeditors family, and then from the customs brokerage team. Today, our session, it is really about breaking down the U.S. customs enforcement Executive Order. Why are we bringing topics for our dear audience today? That really is coming from the executive orders that was issued in the 3rd of June this year, on strengthening customs enforcements for the U.S. Customs. That brought about quite a lot of inquiries, and as the shippers and as active importers, we like to learn about what are some of the advice, what does that really means for our customers.

Therefore, specially curated for our dear audience today, we are going to invite our guest speakers from the America, Vice Presidents of Customs, as well as the Directors of Customs Operation for America, Stephanie Holloway and Madeline Veigel, to join our session today. Just a little bit of housekeeping before we kick off today's session. First and foremost, to hear the webinar, please click join audio at the bottom left of your Zoom window. We do have a Q&A sessions. In fact, you can also pose the questions that you may have alongside during the session. Simply just submit those questions in the Q&A box that you can find in the control panel at the bottom of this webinar.

At the end of the session, yes, we would like for you to do a short survey for us upon completion, and then you will be guided through locations where you could download the slides. Finally, we do have several exciting webinar coming up, and so stay tuned with us by subscribing and checking out through the QR code over there. Today's session, I would like to reintroduce again. The next page, please, Gabby. Yes. We have Madeline Veigel, she is the Vice President of Customs of America, and we have Stephanie Holloway, the Directors of Customs Operations America. In the next few sessions, they will be giving us more details regarding the topic today. Thank you so much for joining us. I am Wang Ping, the Directors of Account Managements for Expeditors.

At the end of this session, my counterpart, Sonia, she will be helping to wrap up the session as well. On to Madeline and Stephanie to take us away.

Thank you, Wang Ping. Thank you.

We are going to get started. Madeline and I are also happy to take your questions. You can see the Q&A box, so if you have things that you're thinking of during this, by all means, you don't have to wait till the end. You can go ahead and type them into the box and we will maybe actually address them during the webinar or answer them as we continue on with the presentation. With that said, we always like to say that we're actually not lawyers. We are just customs brokers in the United States, and we are trying to get you the best information we have at the point that we have it. That's what this message helps describe. As Wang Ping said, this is all about what is happening with U.S. Customs right now. U.S. Customs is going through lots of changes, under the direction of the Trump administration, right?

President Trump is making a lot of changes in the United States and importing is absolutely going to be impacted. It already has been, but they are really taking steps to formalize a lot of these changes. One thing that's a little bit interesting about the Trump administration is that they will tell you what they're going to do. We don't always have a lot of notice, but they do kind of lay out what their plans are. These four documents that are listed here are really important to understand if you're trying to really understand what the Trump administration is doing or where this is all going. We're going to touch specifically on the second one, the Executive Order 14411.

But there has been a few other documents that have just come out in the last couple weeks that are very important. I just want to highlight them. So, of course, back when President Trump first took office in January 2025, one of the first documents he put out was this America First Trade Policy, and that really sets the stage for all of the things that have been happening as far as importing goes. So, there is a very strong desire by President Trump to have more items produced within the U.S., and they are actively using tariffs to help support that goal. Okay? So then in June 3rd, there was an Executive Order came out that really directs U.S. Customs to take a number of actions. That is what this webinar is about. Okay? And then in the last couple weeks, there are some, I will say, kind of scary.

This is not the same U.S. Customs from a year ago. This is, or 2 years ago. This is very different. There was a Trade Fraud Resource Guide that was published with our United States Department of Justice, so that is an area of our government that really lays out enforcement and what your expectations are if you are an importer into the U.S., and really talks about what is expected of you.

And then just a couple weeks ago, there was a report published, it was called "The Great Trade Shipment Scam," but it really talks about really the belief of freight and goods that are moving through these supply chains, and maybe not an ethical way or not the correct way, that there is a lot of freight that is not being declared correctly, maybe not being labeled correctly. So it is very important to understand this piece, because that is where a lot of this is coming from. Okay? So there is a belief from the Trump administration that there is a lot of freight, like I said, moving between countries and maybe not being legally declared correctly or being labeled a different country or things like that. Okay? So I know a number of you on, some of you might be an importer into the U.S., and this will all directly impact you.

But even if you are not directly serving as importer of record, a lot of this will still impact you because whoever is serving as the importer of record is going to have a lot more questions for you. So think of it through that lens. Even if you are not the direct U.S. importer, this will trickle down. There will be impacts to manufacturers and shippers and lots of other parties in the supply chain. So let us first quickly look at what we are seeing right now in the U.S. as far as enforcement. So like I said, there has been different documents laid out, but some of them are pretty new.

We are really starting to see the shift in U.S. Customs and what is happening, and we started seeing that last year. If you do not know, CF28 and 29, those are kind of formal requests that are sent by U.S. Customs to a U.S. importer of record. You can see here in 2025, that number has jumped dramatically. There are lots and lots of questions being asked. Also, on the right-hand side, U.S. Customs actually publishes a lot of data statistics. I have one here that is linked. If you just Google, you will find a bunch of dashboards. Customs, through their own statistics, are telling us that they are doing less audits, but collecting more money. They are now collecting almost $800,000 per audit. Also, they are issuing a lot of penalties. They have already exceeded their fiscal year in this year.

They have already collected $70 million in penalties, and that is well above what they collected last year, which was $46 million. There is a lot of activity. This is just a small portion that we are choosing to show here. Tied into this left-hand side here about document request, one thing that is really important, and I am not going to go through this in detail, but one thing that is really important to know is that when importers are getting requests from U.S. Customs now, they are very detailed requests. When they get sent these notices, it is not just a simple line like, "Please provide a certificate of origin." It is, "Show me the paper trail, show me the documents, help me understand how you came to this conclusion." Here is a very long one, right?

Even if you are not the importer of record, whoever you sold to is going to come to you because they will need help understanding and gathering all of this information. This particular example is U.S. Customs saying, "I read the description and I am looking at the value, and those two are not making sense. So help me understand the product." But it is not just, "Hey, help me understand a little bit of the product." I need photographs. I need a written detailed description. I need where was it manufactured. I need product specification sheets, right? They need a whole lot of information. Also, for the value, right? How did you get there? Wire transfer records, bank payment, account numbers. These are very detailed information.