CIT Judge Considering Ordering CBP to Immediately Refund All IEEPA Duties
The Court of International Trade told CBP to submit a brief on why it should not be made to immediately refund all International Emergency Economic Powers Act tariffs, even on entries that liquidated more than 90 days ago.
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Judge Richard Eaton issued two orders on May 27, in the original IEEPA lawsuit, V.O.S. Selections, and in Euro-Notions Florida, the vehicle for managing refunds for parties that didn’t sue. Those orders suggest that he is ready to direct CBP to refund all the money it collected illegally.
He also ordered CBP Commissioner Rodney Scott to appear in person in New York on June 9, and explain when CBP will comply with the order to reliquidate entries and remove IEEPA duties.
Sidley Austin Trade Practice co-leader Ted Murphy wrote in a note to clients: “This is an unusual order. It indicates (to me, anyway) that the judge is not happy — either CBP is not moving fast enough, or has indicated that it does not intend to refund IEEPA tariffs outside of Phase 1 (e.g., tariffs on entries liquidated more than 80 days ago). The judge is calling the agency to the carpet. It is very unusual to require the Commissioner of CBP to testify. This is a big deal.”
Eaton, in a summary of the May 27 closed settlement conference in the Euro-Notions case, noted that the government previously said it will only refund duties on orders liquidated beyond the 90-day deadline that CBP is authorized to reliquidate, if the importers sue, and a court orders them to do so as a result of that suit. He noted that he directed refunds for all importers who paid IEEPA duties, including those for entries that have been finally liquidated, "whether the importer has brought suit or not."
“The court is particularly concerned about the millions of informal entries where liquidation was simultaneous, or nearly simultaneous, with the time of entry, and for which the liquidation is now final,” Eaton wrote. “To date, the Government has not presented a proposal as to how to address these entries.”
The Department of Justice can appeal Eaton’s order on refunds; however, the deadline for that appeal is just before the hearing, on June 6.
The plaintiffs will also file briefs on whether Eaton should re-impose his order to immediately refund all IEEPA duties.
Eaton also ordered the government to file another Consolidated Administration and Processing of Entries, or CAPE, progress report by June 10, and scheduled a closed settlement conference for June 11.