US Customs to Broaden Tariff Refund Eligibility Amid Ongoing Legal Issues

The landscape of tariff refunds in the United States is poised for significant changes, as U.S. Customs and Border Protection (CBP) prepares to potentially broaden the eligibility for refunds. This could take effect as early as next month, depending on the resolution of ongoing legal challenges. Expanded Refund Processing on the Horizon CBP is actively enhancing its refund processing capabilities, specifically targeting entries that have been finally liquidated and those awaiting reconciliation. During a recent hearing, CBP Executive Assistant Commissioner Susan Thomas revealed plans for an upgraded refund portal, named Consolidated Administration and Processing of Entries (CAPE). This initiative is part of a response to the Supreme Court's ruling that nullified certain tariffs instituted by the previous administration. Phased Rollout Scheduled The rollout of new functionalities is set to occur in two phases. The first phase is expected to launch on June 29, enabling refunds for entries flagged for reconciliation, which could amount to approximately $28.7 billion. Following this, enhancements to process finally liquidated entries are projected for late July, which currently account for about $11.4 billion, or roughly 6.9%, of the tariffs imposed under the International Emergency Economic Powers Act by President Trump. Majority of Entries to Be Eligible With the introduction of these new capabilities, nearly 95% of all entries affected by IEEPA tariffs will likely qualify for refunds. However, Thomas pointed out that entries impacted by specific conditions, such as drawback claims or those not filed properly, will necessitate additional scrutiny. Legal Challenges Looming Despite these advancements, the legal environment remains uncertain. Recently, the Department of Justice (DOJ) initiated an appeal regarding a Court of International Trade order that mandates the government to issue refunds for IEEPA tariffs globally. This appeal follows the court's expansion of its initial ruling to include finally liquidated entries. Jurisdictional Disputes on Refund Orders The DOJ has expressed reservations about the court's authority to mandate refunds for finally liquidated entries, arguing that the court only holds jurisdiction for those importers who have pursued litigation against the tariffs. This matter is currently under review by the Court of Appeals for the Federal Circuit. As the situation develops, professionals in the trade and customs sector, such as Kelly Nelson from KPMG US, have noted that CBP may need a definitive court order before it can effectively process refunds for finally liquidated entries.