What Every Multinational Should Know About …Managing the Aftermath of the Supreme Court’s Historic IEEPA Tariff Decision (Part VIII)

Following the U.S. Supreme Court’s decision striking down the tariffs imposed under the International Emergency Economic Powers Act (IEEPA), attention has shifted from whether the tariffs were lawful to how companies can recover the duties that were paid.

Billions of dollars are potentially at stake. While the Court of International Trade (CIT) will ultimately determine the legal framework governing refunds, U.S. Customs and Border Protection (CBP) has now outlined an initial proposal for administering the refund process.

Although the proposal remains subject to further proceedings before the CIT, it has numerous complications that have yet to be addressed. And, it somewhat bizarrely includes an opt-in requirement that would require importers to download their own ACE data and flag imports on which IEEPA duties were paid (even though this information already is known to CBP). Nonetheless, it provides the clearest signal yet regarding how CBP expects refunds to be processed.

Thus, as the conclusion to our eight-part series on navigating the aftermath of the Supreme Court’s IEEPA decision, the Foley International Trade & National Security and Supply Chain teams are providing the final article in our eight-article series regarding how to manage the aftermath of the Supreme Court’s IEEPA decision. For those who missed our earlier articles, the links to them are as follows:

• Part I: Understanding the New Section 122 Tariffs and Preserving IEEPA Refund Rights (found here)
• Part II: Preserving the Right to IEEPA Tariff Refunds (found here)
• Part III: Contractual Issues for Companies That Are Importers of Record (found here)
• Part IV: Customs & Supply Chain Issues for Importers of Record (found here)
• Part V: Refund-Related Issues for Companies That Indirectly Paid IEEPA Tariffs (found here)
• Part VI: Avoiding Common Pitfalls When Dealing with Refund-Related Issues (found here)
• Part VII: Understanding the Future Landing Spot for Tariffs (found here)

Part VIII, which covers steps importers should take to set themselves up to receive IEEPA tariff refunds, follows below.

Setting Up to Receive IEEPA Tariff Refunds

CBP’s Proposed CAPE Refund System

In a recent filing before the CIT, CBP described a new capability being developed within the Automated Commercial Environment (ACE) called CAPE (Consolidated Administration and Processing of Entries).

Under CBP’s proposal:

• Importers or their customs brokers would submit electronic CAPE declarations through ACE identifying entries on which IEEPA tariffs were paid.
• ACE would run automated validations against entry data to confirm eligibility.
• The system would recalculate duties without the IEEPA tariffs, including applicable interest.
• Refund amounts would be aggregated by importer of record rather than paid on an entry-by-entry basis.
• After validation and reconciliation, refund payments would be issued by the Department of the Treasury, most likely through electronic funds transfer.

CBP has indicated that this centralized approach is necessary given the extraordinary scale of the refund process, which could involve tens of millions of entries and hundreds of thousands of importers.

Two practical implications of the CAPE proposal are already becoming clear:

• First, the CAPE declaration structure strongly suggests that the refund system will function as an opt-in claims process, rather than an automatic refund program, with importers being required to download their own ACE data and flag entries that paid IEEPA tariffs. Given that this information already is contained in ACE, it can be viewed as make-work at best and, more cynically, an attempt to keep any unlawfully collected duties that are not tagged or are not tagged correctly. Unless this requirement is rejected by the CIT, importers will likely need to affirmatively identify entries and submit CAPE declarations in order to trigger refunds.
• Second, because refunds will likely be aggregated at the importer-of-record level, companies should expect significant commercial and contractual discussions regarding who ultimately retains the economic benefit of refunds. In many industries, tariff costs were passed through to customers or suppliers, meaning refund ownership may not always align with the importer of record.
• Third, the CAPE framework suggests that companies will need to perform substantial data reconciliation before submitting claims. Although ACE contains the relevant entry information, companies should not assume that the underlying data will be clean or complete. In many cases, importers will need to reconcile ACE reports with broker records, internal accounting systems, and duty payment data to confirm the entries on which IEEPA tariffs were actually paid. For companies with large import volumes — or those that used multiple customs brokers — this exercise could involve reviewing thousands of entries across multiple systems.
• Fourth, broker coordination will likely become a critical operational step in the refund process. Most importers rely on customs brokers to access ACE data and submit post-entry filings. If CAPE declarations must be submitted through ACE, companies will likely need to coordinate closely with their brokers to retrieve entry data, validate claims, and submit refund requests. Companies that used multiple brokers during the relevant period may face additional logistical challenges in consolidating the necessary data.
• Fifth, entry coding issues and prior post-entry corrections may complicate the refund process. IEEPA duties were assessed through specific Chapter 99 tariff provisions. In situations where brokers initially mis-coded entries or filed post-summary corrections (PSCs), identifying which entries actually paid IEEPA duties may require additional review. Companies may also encounter situations where entries were modified after filing, which could complicate the calculation of refund amounts.
• Sixth, the CAPE system appears designed for automated processing, meaning data accuracy will be critical. CBP’s proposal suggests that the CAPE system will automatically recalculate duties and issue refunds based on existing ACE entry data. While this approach could accelerate the refund process, it also means that the system will likely rely heavily on the accuracy of the underlying entry information. If ACE data does not accurately reflect the duties paid, refund calculations may be incorrect or claims may be rejected.
• Seventh, the CAPE proposal may effectively create a “first-mover advantage” for companies that prepare early. Given the potentially enormous number of refund claims CBP will need to process, companies that organize entry data and prepare CAPE submissions in advance may be positioned to move quickly once the system becomes operational. Companies that wait until the refund mechanism is finalized before compiling entry-level data may find themselves significantly delayed in receiving refunds.

While the precise mechanics, including deadlines and documentation requirements, will be refined through ongoing proceedings before the CIT, the CAPE proposal provides a useful framework for thinking about the steps companies should begin taking now.

Companies that have already filed protective actions under 28 U.S.C. § 1581(i) remain particularly well positioned to pursue recovery. But regardless of litigation posture, importers can take practical steps today to prepare for the refund phase.

Practical Steps Companies Should Consider Now

1. Identify Affected Entries. Under CBP’s proposed CAPE framework, refund claims will almost certainly be tied to specific entries identified in ACE. Companies should begin compiling a complete list of entries where IEEPA tariffs were paid. This may involve:

• pulling entry-level data from ACE
• working with customs brokers to confirm duty payments
• identifying entries where IEEPA tariff lines, such as HTS 9903.01 or 9903.02, were applied
• confirming the duties paid on each affected entry

For many organizations, this data may be spread across multiple brokers, systems, and business units. Organizing the information now will make it significantly easier to prepare CAPE submissions once the refund system becomes operational.

2. Confirm Importer-of-Record Entities. Duty refunds are typically issued to the importer of record (IOR). Companies should confirm which entities within their corporate structure served as the IOR for affected entries.

In large multinational organizations, imports may have occurred under multiple IOR numbers, including:

• different subsidiaries
• distribution or logistics entities
• legacy importer numbers following acquisitions
• special-purpose importing entities

Because the CAPE system will likely aggregate refunds at the importer level, identifying all relevant IOR numbers now will help ensure refund claims are not missed or misdirected.

3. Preserve Entry Documentation. Companies should ensure that documentation associated with affected entries remains readily accessible. Relevant materials may include:

• Entry summaries (CBP Form 7501)
• broker statements
• duty payment records
• commercial invoices and entry packages
• internal accounting records reflecting tariff payments

Because the CAPE system will rely heavily on automated ACE validations, discrepancies in entry data may require manual reconciliation. Having supporting documentation readily available will help resolve issues quickly.

4. Prepare for Electronic Refund Payments. CBP has indicated that refund payments will likely be issued electronically once CAPE validations are complete and refund amounts are calculated. Companies should therefore ensure their importer accounts are configured for Electronic Funds Transfer (EFT).

Where companies operate under multiple importer numbers, each IOR may need to be separately configured for electronic refund payments. Taking this step now may significantly accelerate the timing of refunds once the system becomes operational.

5. Review Internal Allocation of Tariff Costs. Because refunds will likely be issued to the importer of record, companies should begin reviewing how tariff costs were handled commercially. In many industries, tariff costs were passed through in pricing or supply agreements. Companies may wish to review:

• supply contracts and purchase agreements
• pricing adjustments implemented in response to the tariffs
• contractual provisions addressing tariff refunds
• internal records documenting how tariff costs were allocated

These issues can become particularly significant once refunds begin to flow. Addressing them early can help avoid disputes and ensure that refund proceeds are handled consistently with contractual obligations.

6. Monitor Litigation and Procedural Developments. Companies should continue monitoring developments before the Court of International Trade, as upcoming orders may establish:

• deadlines for CAPE submissions
• documentation requirements for refund claims
• eligibility criteria for participating in the refund process
• how refunds will be handled for importers that did not file suit

The litigation surrounding the IEEPA tariffs has moved quickly — reaching the Supreme Court in less than a year — and the refund phase may likewise proceed rapidly.

7. Evaluate Interactions with Drawback and Other Duty Programs. Companies that filed — or are considering filing — duty drawback claims should evaluate how refunds of IEEPA tariffs may interact with those claims.

Potential issues may include:

• recalculating drawback claims that included IEEPA duties
• reconciling refunds with previously received drawback payments
• ensuring compliance with drawback reporting requirements

Companies should coordinate closely with drawback specialists and customs counsel on these issues.

8. Assess Accounting and Financial Reporting Implications. Potential refunds may also raise accounting and financial reporting considerations. Companies may wish to coordinate internally with finance and tax teams regarding:

• whether potential refunds should be treated as contingent assets
• how refunds should be recorded if tariffs were previously expensed
• implications for transfer pricing arrangements
• tax reporting treatment of refunds

These issues can become complex where tariff costs were embedded in broader supply chain pricing structures.

9. Monitor Entry Status and Bond Exposure. Although the refund process will likely occur outside the traditional protest-against-liquidation framework, companies should still monitor the status of affected entries. For example:

• large numbers of unliquidated entries may affect continuous bond calculations
• refund activity may interact with CBP bond sufficiency reviews
• liquidation timing could affect administrative processing

Maintaining visibility into entry status will help ensure that routine customs compliance issues do not complicate the refund process.

Looking Ahead

The Supreme Court’s decision invalidating the IEEPA tariffs has opened the door to potentially significant refunds. But the refund phase is only beginning, and the procedural framework will continue to evolve before the CIT and within CBP’s developing ACE-based CAPE refund system.

Companies that filed protective § 1581(i) actions are potentially positioned at the front of the line. The next phase will likely focus on how refund claims are submitted through ACE, validated by CBP, and ultimately paid by the Department of the Treasury.

Companies do not need to wait for final rules to begin preparing. By organizing entry data, confirming importer-of-record information, preserving documentation, and coordinating internally on refund ownership and accounting treatment, companies can position themselves to move quickly once the CAPE process becomes operational.

If you have questions about these developments, including strategies for securing refunds or preparing for the CAPE submission process, the Foley International Trade & National Security team is ready to assist. Please feel free to contact the authors or your Foley & Lardner relationship attorney.

The Foley International Trade & National Security Practice

The Foley International Trade & National Security Team covers the full gamut of international trade needs, including for tariffs, customs, supply chain/supply chain integrity, trade remedies/antidumping/countervailing duty, export controls, economic sanctions, and CFIUS national security filings. Our Tariff & International Trade blog regularly publishes practical guidance, like this client alert, on all international trade topics and compiles it by topic area on the Foley Tariff & International Trade Resources blog. Click Here to Register for our email list to receive future emails and practical international regulatory compliance tips, including our biweekly What Every Multinational Should Know articles.

The Foley Supply Chain Practice

The Foley Supply Chain Team helps create, strengthen, and protect every link of your supply chain. Our multidisciplinary group of attorneys brings vast experience across sectors and industries and provides practical, business‑focused legal support across every aspect of supply chain operations — from commercial contracts and compliance to logistics, supply of goods, manufacturing, and risk management. For insights on other trending supply chain topics and to get to know our supply chain team, please feel free to reach out to the authors or to visit Foley’s Supply Chain Team page.