A potential refund process for tariffs imposed under the International Emergency Economic Powers Act (IEEPA) may begin as early as April, according to a recent filing by U.S. Customs and Border Protection (CBP) with the U.S. Court of International Trade (CIT).
The development follows the Supreme Court’s earlier ruling that certain IEEPA tariffs were unlawful. While the court initially ordered CBP to begin issuing refunds immediately, the agency stated that its current systems are not capable of processing the required refunds at scale.
Instead, CBP has proposed a new process that would allow refunds to be issued through the Automated Commercial Environment (ACE) after new system functionality is developed.
CBP Plans System Update to Manage Refunds
In its filing, CBP explained that processing refunds through existing systems would require an enormous amount of time and resources. The agency noted that issuing refunds at the entry level could result in more than 53 million separate transactions.
To address this challenge, CBP stated it is working to update ACE so that refunds can be calculated and issued on an importer basis rather than an entry-by-entry basis.
CBP told the court it is confident that new ACE functionality could be developed within approximately 45 days.
If completed on schedule, the refund process could begin in April. However, CBP also noted that it is making all possible efforts to meet this timeline, and system updates can sometimes be delayed.
How the CAPE Refund Process Will Work
The functionality CBP is developing within ACE to support the refund process is called CAPE (Consolidated Administration and Processing of Entries).
Once available, importers or their authorized brokers will be able to submit a CAPE declaration through ACE identifying the entries for which IEEPA refunds are being requested.
The system will validate entries, remove applicable IEEPA tariff codes, recalculate duties, and process refunds accordingly.
After entries reach liquidation or reliquidation, ACE will route them through a CAPE-specific refund process within the ACE Collections refund module.
Refunds will be issued electronically to the importer’s designated bank account, and are expected to include interest.
The U.S. Treasury would issue refunds directly to the importer’s ACH Refund Account. CBP did not provide a timeline for how long validation and payment steps may take once the process begins.
CBP has not yet released a final operational timeline for when the CAPE system will be available. As a result, no immediate action is required until CBP formally launches the process.
Court Temporarily Suspends Immediate Refund Order
Following CBP’s filing, the CIT judge suspended the earlier order requiring immediate refunds. This decision appears to accept CBP’s proposed plan to develop a more efficient refund process through ACE.
Steps Importers Should Take Now
Although the refund process is still being developed, importers that paid IEEPA duties should begin preparing now to ensure they are eligible once refunds become available.
Set up an ACH Refund Account
CBP indicated that refunds will only be issued to importers that have completed the ACH Refund Account setup process. Of the more than 330,000 importers that paid IEEPA duties, only about 21,000 have established an account so far.
If an importer does not have an ACH Refund Account set up in ACE, refund requests may be rejected, as CBP is no longer issuing paper checks.
Monitor entry liquidation and protest deadlines
Importers should track the liquidation status of entries in ACE and file protests within 180 days where appropriate. Missing this window could limit refund eligibility.
Evaluate options for older entries
For entries that have already liquidated outside the 180-day protest period, filing suit at the Court of International Trade may be the only potential pathway to pursue a refund. However, the refund process for these entries remains uncertain.
Ensure access to ACE expertise
The upcoming process will likely require strong familiarity with ACE systems. Importers may need internal expertise or external support to properly submit declarations and manage refund filings.
While no immediate action is required before the CAPE process is launched, importers are still encouraged to review their ACE setup, confirm ACH refund account registration, export a list of IEEPA duties paid, and ensure entries remain open by tracking liquidations and filing protests where needed.
Preparing for the Next Phase
While the refund mechanism is still under development, CBP’s proposal provides the clearest indication yet of how the process may move forward.
Importers that paid IEEPA duties should begin reviewing their entries, confirming refund account setup, and preparing for potential filings in ACE. Taking these steps now can help ensure companies are ready to act quickly once the refund system becomes available.
Dimerco continues to monitor developments related to IEEPA tariffs and refund procedures. As the process evolves, importers should stay alert for updates that may affect eligibility, filing requirements, and timelines.