Process for refunding IEEPA tariffs slowly takes shape

When the US Supreme Court decided that the tariffs collected under the International Emergency Economic Powers Act (IEEPA) were unlawful it did not perscribe how businesses should be reimbursed. This decision was transferred to the Court of International Trade (CIT).

In early March CIT has ordered U.S. Customs and Border Protection (CBP) to liquidate any and all unliquidated entries that were entered subject to the IEEPA duties without regard to those IEEPA duties. Any liquidated entries for which liquidation is not final will be reliquidated without IEEPA duties. This is intended to make reimbursing the tariffs easier and to prevent importers whose goods have not been liquidated yet from taking legal action.

Additionally, CIT stopped the immediate refund of tariffs. This gives U.S. Customs and Border Protection (CBP) time to automate parts of the process. CBP had argued that it could not manually process all 53 million refund requests. Therefore, CBP will set up an automated process in its “Automated Commercial Environment” (ACE) within the next weeks.

CBP is currently planning the following process:

1) Importers use ACE to submit a declaration, listing the imports in question

2) ACE determines applicable tariffs and fees, recalculates them and determines necessary refunds (including interest).

3) ACE adds up all refunds and owed interests for each importer.

4) CBP assesses if the calculation by ACE is correct and informs the Department of the Treasury, which orders the reimbursement.

Due to a change in CBP rules , CBP has been issuing refunds exclusively electronically since February 6 (subject to certain exceptions). CBP noted that even after the introduction of the ACE functionality, importers may not receive IEEPA duty refunds if they have not completed the setup process for receiving refunds electronically. According to CBP, of the 330,566 importers who have paid IEEPA duties or customs bonds, only 21,423 companies (primarily importers or their customs brokers) have completed this process to date.