Dive Brief:
- U.S. Customs and Border Protection will begin issuing all refunds electronically, starting Feb. 6, according to an agency notice.
- By adopting a fully electronic refunds process and eliminating paper-based refunds, the agency said it will remove unnecessary costs and delays while increasing security against fraud. The agency is also upgrading its Automated Commercial Environment portal, which is used to process transactions with shippers.
- “Enhancing ACE enables secure electronic refunds, faster payments, fewer errors and a simplified process for importers, brokers and refund recipients,” said Susan Thomas, acting executive assistant commissioner for CBP’s office of trade, in a Jan. 6 press release.
Dive Insight:
CBP is revamping its processes ahead of what could be a rush of tariff refund requests in the coming months.
The Supreme Court is currently weighing the legality of President Donald Trump’s use of the International Emergency Economic Powers Act to install a wide range of levies. The high court held a hearing in November to assess the executive power’s reach in terms of tariffs but has yet to issue a ruling. However, the court is set to hold a public non-argument session on Friday, where it “may announce opinions,” serving as the first such date of the new year.
The court has not said if Friday’s session will include a decision on Trump’s tariffs, but the timing of CBP’s refund process changes has raised some eyebrows. Along with eliminating paper-based refunds (though exceptions can occur), the agency is adding an automated refund authorization tool and automating the importer account application process, per the agency notice.
“This has EVERYTHING to do with IEEPA refunds,” Pete Mento, director of global trade advisory services at Baker Tilly said in a LinkedIn post, adding: “This stinks of preparing for a landslide of refunds and [the] government not wanting to make it harder on them if it does.”
The Trump administration has previously stated it will issue refunds if ordered by the high court. CBP already has processes in place to disseminate refunds to importers, but it could face an unprecedented scale of requests should the Supreme Court rule against Trump, experts previously told Supply Chain Dive.
“This would be 100 times more than anything they’ve seen previously,” said Greg Tompsett, SVP of U.S. customs at Kuehne+Nagel.
Several companies have already pushed for refunds ahead of the Supreme Court’s ruling, including Costco, Revlon Consumer Products and Bumble Bee Foods, calling for funds to be returned before tariff payments finalized last month.
