U.S. Customs and Border Protection could potentially begin processing refunds for now-defunct tariffs on an expanded scope of entries as early as next month, but legal hurdles may alter the timeline.
The agency is currently working on additional functionalities to cover finally liquidated entries and those up for reconciliation within its dedicated refund portal for tariffs the Supreme Court struck down earlier this year, CBP Executive Assistant Commissioner Susan Thomas said during a hearing Tuesday.
The new capabilities, which Thomas said are scheduled to be rolled out in two distinct phases, would expand the number of entries that can access the portal, known as Consolidated Administration and Processing of Entries, or CAPE.
The first new functionality, targeting a June 29 launch, would cover entries flagged for reconciliation, which account for roughly $28.7 billion in refunds.
“And then right behind that we're working on the functionality to how do we process the finally liquidated entries,” Thomas said during the hearing, floating an estimated launch date of late July. She also added that finally liquidated entries account for roughly $11.4 billion, or 6.9%, of payments made for tariffs President Donald Trump installed using the International Emergency Economic Powers Act last year.
Once the two new capabilities are added to CAPE, about 95% of all entries that faced IEEPA tariffs will be eligible for refunds, Thomas said, noting that entries covered by drawback, under protest or that were not filed through the proper channels would require additional work.
Although CBP is developing new capabilities, legal action from the Justice Department could muck up the works. Last week, the DOJ filed an appeal to a Court of International Trade order directing the federal government to universally issue refunds for IEEPA tariffs. The initial order did not cover finally liquidated entries, but was later expanded to do so.
While the DOJ hasn’t wholly rejected the order, it has argued the court only has jurisdiction to issue refund orders for importers that have filed lawsuits against the IEEPA tariffs. The appeal is now before the Court of Appeals for the Federal Circuit.
“During the hearing, the government maintained that refunds for finally liquidated entries cannot be processed without court authorization,” Kelly Nelson, managing director of trade and customs at KPMG US, said in a LinkedIn post. Nelson noted that CBP’s ability to issue refunds for finally liquidated entries may now require a final court order or other such legal mechanisms.
Despite the recent escalation of the legal scuffle over tariff refunds, CBP’s CAPE system continues to operate apace.
As of June 5, the agency has accepted and begun processing $94.94 billion in refunds for importers, with nearly $24 billion sent to the Treasury for payment, according to a court filing Wednesday. CBP is on track to send another $480 million in refunds to the Treasury this week and to surpass the $60 billion mark by the end of the month, Thomas said during Tuesday’s hearing.
