Tariff Refunds Guide and FAQ: What Importers Need to Know

When the system first launches, it will only apply to unliquidated entries and entries within the 90-day voluntary reliquidation period. CBP plans to expand the system to cover entries for which liquidation has become final, but it has not specified a date by which it will do so.

CBP has stated that the following categories of entries subject to IEEPA duties will not be processed through this system, at least initially:

• Entries that have been flagged for reconciliation, as well as Entry Type 09;
• Entries designated on a drawback claim;
• Entries covered by an open protest;
• Entries not filed in ACE, and entries without a liquidation status is ACE; and
• Entries subject to AD/CVD, for which DOC has issued liquidation instructions, that are pending liquidation.

More than 300,000 companies paid a total of approximately $166 billion in IEEPA duties that must be refunded. These duties were collected on more than 53 million entries.

U.S. importers of record who directly paid the tariffs or the person who takes ownership of the goods once they have cleared customs (the “consignee”) may be eligible for a refund.

Businesses that did not directly pay the tariffs are not eligible for a refund.

Refunds are only available for tariffs applied under IEEPA. This includes tariffs commonly known as “fentanyl,” “trafficking,” “reciprocal,” or “baseline” tariffs, as well as some other tariffs applied to goods from Brazil and India.

Refunds are not available for so-called Section 232, Section 301, Section 201, anti-dumping and countervailing duties (AD/CVDs), or most-favored nation (MFN) tariffs. To determine the legal authority under which tariffs you have paid were applied, consult your customs broker, counsel, or government sources.

"Liquidation" is "settling up" and usually occurs 314 days from the date of entry. CBP considers liquidation to be the point when the book closes on an importer's tariff payment.

At first, the refund system will only apply to unliquidated entries and entries within the 90-day voluntary reliquidation period. CBP plans to expand the system to cover entries for which liquidation has become final, but it has not specified a date by which it will do so.

That will cover approximately 63% of entries for which IEEPA duties have been paid or deposited.

Given that uncertainty, the CIT has advised importers to be aware of their rights to initiate protests.

In a declaration filed on March 12, CBP explained that it is developing the Consolidated Administration and Processing of Entries (CAPE) system to calculate and provide refunds of duties imposed under IEEPA. This new ACE functionality will have four integrated components:

• The Claim Portal will allow importers and brokers to submit refund requests to CBP via a web-based interface for processing and validation. Filers will be able to upload summaries of entries for which they are requesting IEEPA refunds in a standardized spreadsheet format.
• The Mass Processing component will remove IEEPA tariff codes and recalculate duties as if those tariffs were never applied. At the end of this stage, the system accepts the CAPE Declaration.
• The Review and Liquidation/Reliquidation component will review entries identified in the accepted CAPE Declaration. It will update the underlying entry summaries to reflect the new total duties paid and will automatically calculate interest, schedule liquidations, and direct manual reviews as needed.
• The Refund component will consolidate and process refunds electronically to designated accounts as established in the CAPE Declaration.

CBP acknowledges that in addition to refunding the IEEPA duties, they must also pay importers interest, as required by law.

The law requires that interest on “excess moneys deposited” with CBP (overpayments) shall accrue from the date the importer of record deposits estimated duties until the date of liquidation or reliquidation (19 U.S.C. § 1505(c)). Interest continues to accrue until the date of refund or liquidation/reliquidation.

The interest rate is 6% at present. CIT has noted that “interest is accumulating every day, with approximately $650 million accruing per month,” a fact that hopefully will incentivize expeditious refunds.

Customs brokers provide invaluable services for small businesses engaged in international trade and will be the front line for small businesses seeking tariff refunds.

To represent your interests appropriately, customs brokers will need to learn about the requirements for the new tariff refund system being developed, organize submissions in line with its requirements, and ensure you have taken the necessary steps to receive refunds electronically.

The answer to this question is nuanced and will depend on the treatment of the original/underlying expense and the nature and structure of your business, among other considerations. The U.S. Chamber does not provide legal or tax advice. Please consult an attorney or a qualified tax professional for more information.