CAPE Phase 2 Is Live, But Millions of Tariff Refunds Are Failing: What Importers Need to Know
The rollout of U.S. Customs and Border Protection’s (CBP) automated refund mechanism for struck-down International Emergency Economic Powers Act (IEEPA) tariffs has reached a critical juncture. On July 1, 2026, CBP submitted its latest status declaration in the ongoing test case, Euro-Notions Florida, Inc. v. United States (CIT No. 25-00595). While the headline numbers show significant progress- approximately $71.06 billion in refunds certified and 18.1 million entries cleared- the data reveals that millions of entries are being rejected or left out entirely. For importers seeking to recover their share of these multi-billion-dollar tariff refunds, understanding why claims are failing is essential to securing a recovery.
On June 29, 2026, CBP officially launched Phase 2 of the Consolidated Administration and Processing of Entries (CAPE) tool, expanding the system to handle reconciliation-flagged entries (types 01, 02, and 06) where a reconciliation entry has not yet been filed. Despite this technical expansion, CBP’s report highlights severe processing roadblocks: The Failure Rate: A staggering 4.36 million entries failed CAPE’s entry-level automated checks. An additional 8,384 certified refunds are currently stalled at CBP. These funds cannot be transmitted to the U.S. Treasury simply because the Importer of Record (IOR)- or their designated party via CBP Form 4811- has failed to provide Automated Clearing House (ACH) banking information in the ACE portal. Because paper checks are no longer utilized for these disbursements, an active ACH profile is mandatory.
The most significant compliance risk involves “finally-liquidated” entries- those that settled beyond CBP’s standard 90-day reliquidation window. Under current programming, CAPE is not structured to refund these entries. The Department of Justice and CBP maintain that the agency lacks the unilateral administrative authority to reliquidate final entries or issue refunds without an importer-specific federal court order. This position is currently being aggressively contested on appeal before the U.S. Court of Appeals for the Federal Circuit (No. 26-1898). The government’s current stance is clear: it will not issue refunds on finally-liquidated entries unless the individual importer has filed a protective lawsuit in the U.S. Court of International Trade (CIT). Filing a complaint preserves your company’s standing and safeguards your claim while the appellate court decides the broader issue.
To ensure you are not leaving capital on the table, your trade compliance team or legal counsel should audit your IEEPA entry data and categorize each affected entry into one of three distinct categories: The first is refunds in progress: these are entries that successfully cleared CAPE, liquidated without the unlawful IEEPA duties, and have valid ACH info on file. For these, you simply need to monitor and confirm the electronic disbursement. The second is fixable rejections: if your entries are among the 4.36 million that failed CAPE’s baseline validation, the cause is frequently a fixable administrative error. The three most common reasons for rejection include importer/filer identity mismatches, entry-number typographical errors, and .CSV data template misalignment. These entries should be cross-referenced against your ACE data, corrected, and resubmitted before Phase 2 processing concludes. The third category consists of entries that are outside the scope of CAPE. These are entries that finally liquidated past the 90-day window. CAPE will not automatically process these refunds. Preserving your right to recover these funds requires initiating independent litigation at the CIT before the pending Federal Circuit appeal potentially forecloses your options.
The importers who maximize their structural tariff recoveries will not necessarily be those who rushed to file the earliest CAPE declarations. Success will belong to the businesses that meticulously analyze their data, immediately correct formatting rejections, and proactively litigate the final liquidations that automated systems cannot resolve. Our team can assist you with auditing your entry histories, resolving automated CAPE rejections, and filing protective CIT actions to secure final liquidation claims. Contact us today to evaluate your entry data and protect your company’s right to a full refund.
Disclaimer: “This briefing is provided for general informational purposes only and does not constitute legal advice. Please consult with qualified counsel for advice tailored to your specific trade profile.”