IEEPA Tariff Refund Process Faces Operational and Legal Challenges

There were several significant developments this week regarding the ongoing refund process for tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

Following the Supreme Court’s decision invalidating the IEEPA tariffs, the U.S. Court of International Trade (CIT) directed U.S. Customs and Border Protection (CBP) to refund those duties to importers who paid them. However, Judge Richard Eaton temporarily suspended the requirement for immediate refunds while CBP developed and implemented its Claims and Appeals Processing Environment (CAPE) system to administer the refund process.

To date, CBP has only deployed Phase 1 of CAPE. This initial phase is limited to certain unliquidated entries and entries that remain within 80 days of liquidation. CBP has not yet announced a timeline for future phases or clarified which additional categories of entries may become eligible for processing.

CBP Reports Significant Processing Issues

In a May 26 update, CBP identified several issues that are delaying the processing of IEEPA tariff refund claims.

According to CBP, nearly one-third of submitted claims have failed initial file validation. The most common reasons include:

• Importer of record or filer mismatches on CAPE declarations;
• Entry numbers that are either invalid or of incorrect length; and
• CSV files that do not conform to the template published in the ACE portal.

Even among claims that pass initial validation, additional challenges remain. CBP reported that approximately 22 percent of entries subsequently failed entry-level validation, primarily because:

• The entry date falls outside CBP’s 90-day reliquidation authority;
• The entry does not contain a Chapter 99 HTSUS number used to assess IEEPA duties; or
• The entry has already been included in a previously filed CAPE declaration.

CBP also noted that thousands of approved refunds have not yet been transmitted to the U.S. Treasury Department because Automated Clearing House (ACH) account information has not been provided by the importer of record or an authorized CBP Form 4811 designee.

Importers seeking refunds should therefore carefully review their submissions to ensure all required information is complete and accurate. They should also verify that ACH information has been properly established to facilitate electronic payment of any approved refunds.

Billions in Refund Claims Already in Process

Despite these challenges, CBP reported that approximately $85 billion in potential and certified IEEPA tariff refunds have been accepted for processing through CAPE. Of that amount, roughly $20.6 billion has already been certified by CBP and transmitted to Treasury for disbursement.

Court Signals Frustration with Refund Progress

The refund process may soon face additional legal scrutiny.

On May 27, Judge Eaton issued an order expressing concern that CBP is not doing enough to ensure refunds reach all affected importers. He specifically highlighted the issue of millions of informal entries for which liquidation occurred simultaneously—or nearly simultaneously—with entry and is now final. According to the court, CBP has not yet proposed a method for addressing these entries.

As a result, Judge Eaton ordered CBP to show cause why the court should not lift the suspension of its directive requiring immediate compliance with the refund order. CBP must respond by June 4, and the CIT has scheduled a hearing for June 9. Notably, CBP Commissioner Rodney Scott has been ordered to appear in person.

Potential Appeal Could Further Complicate Refund Process

The court’s show-cause order, or any decision to lift the suspension of immediate compliance, could prompt the Department of Justice to challenge the CIT’s authority to require refunds for all importers affected by the invalidated tariffs.

The DOJ has until June 6 to file an appeal. On Friday, the Department informed the Court of International Trade that it intends to appeal what it characterizes as the court’s authority to order nationwide refunds of all IEEPA tariffs ruled unlawful by the Supreme Court. According to reporting by Bloomberg, the government argues that refunds should be limited to importers that participated in the litigation, rather than extending to all affected parties.

At the center of the dispute is whether the CIT’s order constitutes a form of nationwide relief that exceeds the court’s authority in light of recent Supreme Court precedent restricting broad nationwide injunctions.

If the appeal proceeds, it could introduce additional uncertainty into an already complex refund process. Bloomberg observed that an appeal by the Trump administration could inject “legal chaos” into a claims system that is already actively processing tens of billions of dollars in refund requests.

What Importers Should Watch

Importers with potential IEEPA tariff refund claims should continue monitoring developments closely over the coming weeks. Key dates include CBP’s June 4 response to the court’s show-cause order, the June 6 deadline for any DOJ appeal, and the June 9 hearing before the Court of International Trade.

In the meantime, companies should ensure that refund submissions are complete, accurate, and supported by the required documentation to avoid processing delays as CBP continues to expand and refine the CAPE refund program.

If you have questions about the CAPE refund process or the ongoing litigation concerning IEEPA refunds, out team of tariff lawyers is here to help. Contact us to schedule a consultation.