CBP is opening the CAPE portal for Phase 2 entries on June 29. This is an important next step in the IEEPA tariff refund process, but Phase 2 does not apply to every reconciliation entry. Importers should review their entries carefully before submitting.
What Phase 2 means
Phase 2 applies to certain entries that were flagged for reconciliation and that included IEEPA tariff payments.
In plain English, reconciliation entries are entries where the final duty calculation was not fully settled at the time of entry because some information would be finalized later. This often happens when an importer needs to reconcile value, classification, assists, royalties, transfer-pricing adjustments, or other post-entry information.
CBP is now allowing certain reconciliation-flagged entries to be submitted through CAPE so that IEEPA duties can be removed and refunded separately from the later reconciliation process.
Who should apply now
Importers should begin submitting Phase 2 claims if they have entries that meet all of the following conditions:
- The entry paid IEEPA duties;
- The entry was flagged for reconciliation;
- The entry is an entry type 01, 02, or 06;
- The Type 09 reconciliation entry has not yet been filed; and
- The entry is either unliquidated or within 80 days of liquidation.
If your Type 09 reconciliation entry has already been filed, that entry is not included in this June 29 Phase 2 rollout. CBP has indicated that those entries will be handled in a future CAPE phase.
Timing is important
For eligible reconciliation-flagged entries, the order of filing matters.
Importers should submit the eligible underlying entries through CAPE before filing the Type 09 reconciliation entry.Once the reconciliation entry is filed, the underlying entries are no longer eligible to be submitted through CAPE in this phase.
CBP has also cautioned that if a reconciliation filing deadline is less than 30 days away, importers should prioritize filing the reconciliation entry. Importers should not miss a reconciliation deadline while trying to submit through CAPE.
If you are unsure whether your entries qualify, check with your customs broker, trade counsel, or internal compliance team before filing.
What importers should do now
Importers should take three immediate steps:
–>First, if you have not yet submitted your Phase 1 entries, continue working to get those submitted as soon as possible.
–>Second, identify any entries that were flagged for reconciliation and included IEEPA duties.
–>Third, for eligible Phase 2 entries where the Type 09 reconciliation entry has not yet been filed, begin submitting those entries through CAPE starting June 29.
Phase 3: final liquidated entries
Phase 3 will address entries that are already in final liquidation. These entries raise additional procedural issues because they are further along in the customs process, and CBP is still building out the CAPE portal functionality to handle them. CBP is currently working on the portal buildout for final-liquidation entries. That functionality is expected to be completed by the end of July.
We expect the parties and the court to continue sorting out during July how the Phase 3 process will function. Our hope is that by the time CBP finishes the portal buildout, there will be a clear procedure in place for importers with finally liquidated entries. We have a number of proposals for the court to address this issue.
There has been a lot of misinformation out there–
*NONE OF THE ISSUES REGARDING PHASE 3 WILL AFFECT PHASE 1 OR 2 OR REFUNDS THAT ARE IN THE PIPELINE.
*RIGHT NOW THERE IS NOTHING YOU NEED TO DO OR CAN DO FOR FINAL LIQUIDATED ENTRIES.
*YOU SHOULD QUESTION PEOPLE WHO ARE OFFERING TO SECURE YOUR PHASE 3 REFUNDS FOR A FEE BECAUSE AS OF NOW–NO ONE IS ELIGIBLE UNTIL THE PROCESS IS SORTED AND CAPE IS BUILT-OUT
For now, importers should focus on what is currently available: continue submitting any outstanding Phase 1 entries, and begin submitting eligible Phase 2 reconciliation-flagged entries starting June 29.