Court Temporarily Pauses Immediate Compliance Order as CBP Prepares System for IEEPA Tariff Refunds
New developments in the ongoing litigation over the IEEPA tariffs provide further insight into how and when importers may receive refunds of duties that courts have already held were unlawfully imposed. Recent filings from U.S. Customs and Border Protection (CBP) and an updated order from the U.S. Court of International Trade (CIT) clarify both the administrative challenges of processing refunds and the court’s current approach to implementation.
CBP Says Refund Processing Will Require New ACE Functionality
In a March 6 declaration filed with the court, CBP stated that it is not yet operationally prepared to process the court-ordered refunds of IEEPA tariffs. However, the agency indicated that it expects to develop the necessary functionality within approximately 45 days.
According to the declaration, CBP intends to implement new processes within the Automated Commercial Environment (ACE) that would allow refunds to be handled on an importer-level basis, rather than issuing refunds separately for each individual entry. The agency estimated that processing refunds entry-by-entry could involve more than 53 million individual transactions, many involving multiple payments to the same importer.
Under the process described to the court, importers would submit a declaration through ACE listing entries on which IEEPA duties were paid. The system would then validate those entries, recalculate duties without the IEEPA tariffs, compute applicable interest, and aggregate refunds by importer before transmitting the certified refund amounts to the U.S. Department of the Treasury for electronic payment.
While CBP expressed confidence that the system can be developed, the agency acknowledged that operational, legal, and technical considerations remain. As a result, even once the system is implemented, the process of reviewing declarations and issuing payments may take significant time given the scope of affected entries.
Court Suspends Immediate Compliance Requirement
Following CBP’s declaration and a conference with the parties, the CIT issued an order on March 6 modifying its earlier directive regarding implementation of refunds.
Specifically, the court ordered that its March 5 amended order is suspended to the extent that it requires immediate compliance. The suspension gives the government time to address the operational issues described by CBP while preparations for refund processing continue.
Importantly, the court’s order does not alter the underlying legal conclusions regarding the IEEPA tariffs. Rather, it reflects the court’s recognition that administering refunds for potentially millions of entries will require practical implementation steps within CBP’s systems.
What This Means for Importers
For importers, these developments reinforce an important point: while courts have already ruled that the IEEPA tariffs were unlawful, the administrative process for issuing refunds is still being developed.
CBP’s declaration indicates that the agency is working toward a centralized refund system within ACE, but that system has not yet been implemented and may take time to operate once it becomes available. In the meantime, the courts continue to oversee how the government complies with their rulings.
This evolving process also highlights why many importers have chosen to pursue litigation in the Court of International Trade. Filing suit allows companies to secure judicial oversight of their claims while the broader refund process is being defined.
Looking Ahead
The next phase of the litigation will likely focus on two parallel tracks: CBP’s development of an administrative refund mechanism and continued court supervision of the government’s compliance with rulings invalidating the tariffs.
For companies that paid significant IEEPA duties, these developments underscore that the legal right to refunds may exist, but the pathway to obtaining those refunds is still unfolding. Importers should continue to monitor the litigation and evaluate whether proactive legal action is appropriate to ensure their ability to recover duties once the refund process is fully implemented.
Possible Appeal and Delay in Implementation
As a final note, the court’s ordered refunds may be delayed by further litigation. The Government is expected to appeal the decision to the United States Court of Appeals for the Federal Circuit and seek a stay of the ruling while the appeal is pending. If the appellate court grants a stay, implementation of the United States Court of International Trade’s order—including the liquidation or reliquidation of entries without the IEEPA duties and the issuance of refunds—would be paused until the appeal is resolved. As a result, although the CIT’s order directs CBP to remove the IEEPA duties from affected entries, the ultimate timing and availability of refunds may depend on how the Federal Circuit addresses any request for a stay during the appeal process.