Customs and Border Protection (“CBP”) remains under court-order to refund importers the monies paid (plus interest) and have stopped collecting tariffs levied under the International Emergency Economic Powers Act (“IEEPA”). Refund timing and the process is still not certain but could start in as few as 45 days (est. April 20).
While CBP figures out the refund process, it is critically important that importers, especially those of you who only import once or twice a year, enroll immediately with CBP to receive electronic refunds via Automated Clearing House (“ACH”). Instructions can be found HERE. CBP estimates that only 6% of the 330,000 importers who paid IEEPA tariffs have completed this step. Importers should also ensure they are actively tracking liquidation dates of impacted entries and deadlines for filing protests.
Beyond the procedural unknowns, there are still other important questions that remain unanswered, including:
- Who is eligible to participate?
- What will importers need to do to participate? and,
- What will happen to impacted customs entries that:
- Have not been protested and are past their 180-day protest deadline; and,
- Are past their 90-day liquidation date but within the 180-day protest deadline.
SSA’s affiliated customs counsel Neville Peterson advises the safest option for importers wanting full refunds to mitigate the risk of falling into one of the currently ambiguous scenarios above is to:
- File a 1581(i) lawsuit with the Court of International Trade (“CIT”), and;
- File protests for all liquidated entries.
To review Neville Peterson’s full summary of the events that have unfolded this week and resulting guidance, click HERE.
Details behind these developments:
Despite much speculation and widespread mischaracterization in the press that the government intended to challenge having to pay the refunds, CBP has affirmed it will comply with the CIT’s March 4 order. CBP did however declare it is unable to immediately comply with the order due to functionality limitations in ACE, but proposed creation of new mechanism that would “streamline and consolidate refunds and interest payments on an importer basis.”
Following a conference between the parties at the CIT on March 6th to discuss CBP’s response, Judge Richard Eaton withdrew the requirement for CBP to immediately comply with the order; all other aspects of the order remain in place.
CBP predicts the proposed refund system could be deployed in as soon as 45 days; they did not specify a predicted timeline for actual refund receipt.
The proposed mechanism would work as follows:
The importer files a declaration in ACE that includes a list of entries on which IEEPA duties were paid.
- ACE runs a series of validations on each entry within the declaration and automatically re-calculates the duty owed without the IEEPA tariffs (with applicable interest).
- CBP verifies the declaration and processes refunds as soon as practicable.
- ACE automatically finalizes (liquidates or reliquidates) the entries.
- ACE automatically aggregates the refunds with interest by importer and liquidation date.
- CBP certifies the refunds.
- The Department of the Treasury issues IEEPA refunds electronically via ACH.
We are continuously tracking this developing issue and will provide additional information as it becomes available. OIA members can access Mobilize or join the Trade Advisory Council for updates and guidance. Not a member? Get in touch today to learn more.
