IEEPA Duty Update: Trade Court Orders Refunds to Litigants on Finally Liquidated Entries
Last week, the U.S. Court of International Trade (CIT) began to take long-anticipated action to make available refunds of all duties paid under the tariffs unlawfully imposed under the International Emergency Economic Powers Act of 1977 (IEEPA) to parties that have filed suit in the court. While U.S. Customs and Border Protection (CBP) has been duly refunding IEEPA duties paid on most more recent imports, under a new order by Judge Richard K. Eaton the avenue for most older imports is now opening to importers willing to go to court while the question of whether importers that have not filed suit can recover fully plays out on appeal. Importers with substantial outstanding claims who have not filed a case now have strong reason to consider doing so sooner rather than later.
Background on the Entry and IEEPA Duty Refund Processes
As a refresher on the importing process, when goods are brought into the United States, 19 U.S.C. § 1484 generally requires the importer of record (IOR) to file an "entry," or paperwork that includes declarations of the goods' properties to determine which tariffs apply and how much duty is owed, and deposit estimated duty with CBP. Under § 1504, CBP may review the entry before "liquidating" it, meaning confirming or adjusting the duty owed, and then issuing an appropriate bill if the amount paid is found inadequate or refunding (with interest under § 1505) any overpayment to the IOR. For 90 days after liquidation, § 1501 allows CBP to "reliquidate" an entry on its own and thus to issue a new bill or refund to the IOR; after that time, the entry is considered "finally liquidated" and—at least in the context of IEEPA tariffs—a court order, from the CIT in a case under 28 U.S.C. § 1581(i), is required to authorize CBP to reliquidate finally liquidated entries.
Earlier this year, while the U.S. Supreme Court ruled in one case that tariffs imposed under IEEPA from February 4, 2025, through early 2026 were unlawful, other IORs have filed approximately 3,700 cases and counting in the CIT seeking refunds of IEEPA duties. All of these other cases were at first automatically stayed by the CIT, yet in one "test case" Judge Eaton lifted the stay and ordered that all IEEPA duties paid to CBP be refunded to all IORs that paid them through liquidation or reliquidation. As we expected, on June 2, 2026, the government appealed the order to the extent that it requires CBP to issue refunds of finally liquidated entries to non-litigants. The government argued that this part of the order amounts to an impermissible universal injunction under Trump v. CASA, Inc., and that without a valid order, CBP does not have the authority to issue such refunds.
Meanwhile, to process refunds, CBP created a new module in its Automated Commercial Environment (ACE) system called Consolidated Administration and Processing of Entries (CAPE) through which importers can file refund claims. CAPE "Phase 1" successfully launched on April 20 with the ability to accept most entries that are not finally liquidated, where final liquidation is deemed to occur at 80 days in order to give CBP a 10-day buffer to process claims within the statutory period.
CIT Cases and CAPE Status
On June 29, CBP deployed Phase 2 of CAPE, which expanded eligibility to non-finally liquidated entries flagged for reconciliation (types 01, 02, and 06) but for which a reconciliation entry (type 09) has not yet been filed, and later restricted the eligibility of warehouse entries (types 21 and 22) in favor of warehouse withdrawals effective July 7. Ineligible still are entries designated on a drawback claim, entries covered by an open protest, entries without a liquidation status in ACE, type 03 entries pending liquidation, and reconciliation entries. As of July 10, according to the latest Government filing, CAPE has accepted refund claims covering nearly three-quarters of the $166 billion in IEEPA duties collected, and refunded roughly $86.3 billion in duties plus interest. The next status update is due to the court in the newest test case, Freestyle World, Inc. v. United States, on August 4.
While Judge Eaton considered how to maximize relief to importers during the partial appeal of his order, CBP Executive Assistant Commissioner Susan S. Thomas testified in a June 9 hearing that CAPE Phase 3 would be able to accept eligible finally liquidated entries and was scheduled to deploy in late July. Thus, last week, the CIT began assigning all existing refund cases to Judge Eaton, who on July 15 began issuing reliquidation orders for finally liquidated entries in each of the existing refund cases. Recognizing that "the Government has represented that it will refund estimated IEEPA duty deposits to Plaintiffs that challenge the duties in court," the order "provides the Government with that legal authority." Counsel for each importer will receive instructions to submit the importer's IOR number to CBP to gain access to CAPE, through which the importer may file its claims on finally liquidated entries once Phase 3 launches.
Next Steps for Non-Litigant Importers
Aside from certain uncommon entry types, importers whose claims extend only to entries that have liquidated within the last 80 days or entries that remain unliquidated can fully recover through CAPE without court intervention. Importers with claims on finally liquidated entries that have filed refund cases in the CIT are now receiving their full remedy. But for those importers with claims on finally liquidated entries that have not filed in court, the question is whether to do so now while the appeal, in which no briefs have yet been filed, moves forward.
Likely, the way to obtain these refunds soonest is to file promptly. On July 13, the CIT rescinded its administrative order imposing automatic stays on newly filed refund cases, leaving importers that decide to file suit an opening to request the reliquidation order now afforded to current litigants, which the court may be partial to providing. Assuming CAPE Phase 3 is active, any litigant could then file claims on entries regardless of liquidation date. However, because there is a two-year limitations period measured from the date of deposit to file a 28 U.S.C. § 1581(i) case, an importer can defer filing suit until at least February 4, 2027, without prejudice and still receive interest through the date of reliquidation.
For importers wary of filing a case now, two considerations may suggest waiting. First, the government may lose its appeal (before the limitations period expires), in which case the original refund order will apply to all claims and importers will not need to file individual cases. Second, there is a pending motion for class certification in the original case that is intended to cover all non-litigants, which would circumvent the supposed limitations of CASA. But if the government wins its appeal—or, as a practical matter, if the appeal lasts beyond the limitations period—and a class is not certified, filing in the CIT will be the only avenue by which an IOR can recover on finally liquidated entries.
The new reliquidation orders may also put to rest the question of whether importers must file administrative "protests" to preserve IEEPA duty refund rights. 19 U.S.C. § 1514 requires importers to challenge CBP decisions by filing a protest with the agency within 180 days of liquidation, and, if CBP denies the protest, the importer may seek judicial review in the CIT under 28 U.S.C. § 1581(a). However, before the Supreme Court ruling, the CIT stated that the assessment of IEEPA duties in liquidation is not a CBP decision but rather is required by the executive order imposing the IEEPA tariffs, and thus not protestable. The CIT, and the government by acquiescence, appear to believe that this same logic applies today. Accordingly, a protest—while easily filed and non-prejudicial to a case—may not be necessary to preserve refund rights.
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DWT's international trade, investment & national security team can advise clients on filing CIT cases and CAPE claims to protect and to obtain IEEPA duty refunds and will report on further developments as they arise. Please contact the authors if you have any questions or need assistance. For more insights, sign up for our alerts.
