CBP Filing Explains How Refunds Will Be Issued

Today, U.S. Customs and Border Protection (CBP) filed a declaration with the Court of International Trade explaining how it plans to process refunds following the Supreme Court’s decision striking down the IEEPA tariffs.

The filing does not change the requirement that refunds must be issued, but it explains why CBP says it cannot process them immediately using its current systems.

CBP also outlined a new automated process it plans to build to issue refunds more efficiently.

Below are answers to the most common questions about today’s filing.

FAQ: What CBP’s Filing Means for Importers

What did CBP tell the court today?

CBP informed the court that it cannot immediately process tariff refunds using its current systems.

According to CBP, the scale of the refunds is unprecedented:

• 330,000 importers paid the tariffs
• 53 million import entries include the tariffs
• Approximately $166 billion in tariffs were collected

CBP says its current system would require refunds to be processed entry by entry, which would require millions of hours of manual work.

Does this change the requirement that refunds must be paid?

No.

The court has ordered that the unlawful tariffs must be removed from import entries and refunded. CBP’s filing addresses how the agency plans to implement that order, not whether refunds will occur.

Refunds are still required.

What process is CBP proposing for refunds?

CBP told the court it plans to create a new automated refund process within its Automated Commercial Environment (ACE), the system used to manage import entries.

The proposed process would work roughly as follows:

1. Importers submit a refund declaration in ACE listing entries where IEEPA tariffs were paid.
2. ACE automatically recalculates duties without the tariffs.
3. CBP reviews the declaration and confirms the calculation.
4. Refunds are aggregated by importer rather than issued entry-by-entry.
5. The Treasury Department issues the refund electronically with interest.

CBP says this system would be significantly faster and reduce the risk of errors.

How long will it take to build this refund system?

CBP told the court it expects the new system could be ready in approximately:

45 days

The agency said it is already working to develop the new functionality.

Once the system is ready, CBP will issue instructions explaining how importers can submit refund requests.

Why does CBP say refunds are complicated?

CBP identified several technical issues in its filing:

• Many entries combine multiple tariffs on a single entry line.
• Some importers did not separately report the IEEPA tariff from other duties.
• The system currently allows only limited “mass updates.”
• Refunds must normally be reviewed and certified individually.

Under the current system, CBP estimates it would take over 4.4 million hours of manual work to process refunds.

What happens to entries that have already liquidated?

CBP’s filing explains that:

• Some entries may need to be reliquidated (recalculated after liquidation).
• Others are still unliquidated and can be corrected during liquidation.
• The court’s order requires CBP to remove the unlawful tariffs in either situation.

The new automated system is intended to address both scenarios.

Do businesses need to file anything right now?

No.

At this stage, businesses do not need to submit refund claims to CBP.

CBP will issue instructions once the new refund system is available.

What should businesses do while waiting?

Businesses can use this time to prepare by:

Working with their customs broker to identify entries that paid the tariffs.

This information typically includes:

• Entry numbers
• Entry dates
• Amount of duties paid

Having this information available will help businesses quickly submit refund requests once the system opens.

Will refunds include interest?

Yes.

Under federal law, refunds of unlawfully collected tariffs must include interest from the date the duty was paid.

How will refunds be paid?

Refunds will be issued electronically by the U.S. Treasury to the importer of record.

CBP noted in its filing that many importers have not yet completed the process required to receive electronic refunds. Importers may want to confirm with their customs broker that they are set up to receive electronic payments.

What happens next?

Over the next several weeks:

• CBP will continue developing the new refund system.
• The court will oversee the implementation of the refund order.
• CBP will publish instructions explaining how importers can request refunds.

Once that guidance is released, businesses will be able to begin submitting refund declarations.