IEEPA Court Developments Mean Many Refunds May Take a Year or More, Lawyers Say
Customs has now said explicitly what many trade lawyers suspected -- that, without an importer-specific court order, "it has no intention of paying refunds on entries which are 'liquidated and final' – and more entries assume that status every day,” Neville Peterson wrote in a blog post June 1.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
In an email, John Peterson of the firm called the government's position audacious, and said, "I wouldn't blame Judge [Richard] Eaton if he was furious over this posture."
In the blog post, the firm wrote that CBP is relying on "procedural rules and jurisdictional limits" as an excuse to collect illegal tariffs on entries that are liquidating now and in coming weeks and months.
In a filing late May 29, DOJ said that the Court of International Trade doesn't have the authority to order refunds on finally liquidated entries from importers who have not sued. Neville Peterson pointed out that only about 4,000 firms out of 300,000 importers who paid International Emergency Economic Powers Act tariffs have sued.
Peterson told us: "The big question is whether Customs continues CAPE [the Consolidated Administration and Processing of Entries tool] in its current form, or decides to terminate or suspend it. If they suspend it, then importers should get their CIT cases filed ASAP. If they continue it, importers can use the system to get as many refunds as they can. But ultimately, I suspect they'll need to go to court for anything they don't get through CAPE. They have until February 2027 to do so."
The firm's blog post also said that if CAPE is suspended, firms should file protests for entries that were submitted to CAPE and those outside phase one. "There is no guarantee that protests will provide a quick or satisfactory result. There is no time limit for Customs to process protests and some government officials have gone on record as claiming CBP’s assessment of IEEPA tariffs is a non-protestable 'ministerial' activity, which could lead to another court battle."
Eaton wrote in his response to DOJ, "On March 4, 2026, the court directed that all unlawfully collected IEEPA duties should be refunded to the importers that had made deposits. On March 6, Customs acknowledged that it had an obligation to refund the duties, and proposed that it develop a voluntary system for their return." He called the CAPE program's launch expeditious, but added, "Nonetheless, there are billions of dollars of duties that currently cannot be processed by the CAPE program but still must be refunded. It is understood that most of the refunds that have been processed so far have gone to large importers, not small."
Valerie Sorensen-Clark, who represented CBP in the V.O.S. Selections case until a month ago, defended CBP's stance on finally liquidated entries as more than a procedural excuse to avoid repayment. On LinkedIn, she wrote, "Since leaving CBP, I have repeatedly emphasized that the absence of a refund process for liquidated entries was not because the government was ignoring those claims or attempting to avoid paying refunds. Rather, there is a legitimate legal question concerning the mechanism by which refunds of finally liquidated entries can occur."
She said that there is a real question whether a court may order reliquidation for importers who are not parties before the court.
"That question now appears headed for appellate resolution. Regardless of where the courts ultimately land, additional clarity on the issue will benefit importers, CBP, and the trade community alike," she wrote.