Businesses 'very pleased' IEEPA tariff refund process has begun
by Joe Fisher · UPIApril 29 (UPI) -- The government portal for submitting tariff refund claims has been open for about a week after some importers were unsure it would ever happen.
The U.S. Supreme Court ruled in February that tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act were illegal but the court did not offer direction about what should happen with the duties that were collected.
The Court of International Trade weighed in last month, ordering U.S. Customs and Border Protection to refund revenue that was unlawfully collected under IEEPA.
"With respect to any and all unliquidated entries that were entered subject to IEEPA duties, U.S. Customs and Border Protection is hereby directed to liquidate those entries without regard to the IEEPA duties," the court ordered in the case Learning Resources, Inc. vs. Trump.
"Any liquidated entries for which liquidation is not final shall be liquidated without regard to those duties. Any liquidated entries for which liquidation is final shall be reliquidated without regard to the IEEPA duties."
The portal to submit requests for refunds opened on April 20.
Importers of record and customs brokers are the only eligible entities that can submit a refund claim in the Consolidated Administration Processing of Entries program during this first phase of refunds. CBP estimates that refunds will be issued by ACH transfer within 60 to 90 days of claims being approved.
"U.S. Customs and Border Protection launched the Consolidated Administration and Processing of Entries tool to issue refunds for importers and brokers who paid IEEPA duties, pursuant to court order," U.S. Customs and Border Protection said in a statement to UPI. "CBP made system updates to optimize processing, briefly pausing access the morning of April 20, but service was promptly restored with no delays."
The CBP website includes guidance for using the CAPE system to submit a request.
FedEx confirmed with UPI that it has begun the process of submitting requests for refunds.
"Supporting our customers as they navigate regulatory changes remains our top priority," FedEx said in a statement. "We are beginning to file claims with CBP via their refund processing portal."
About $166 billion is estimated to be refunded to more than 300,000 distinct importers to the United States, Jonathan Todd, vice chair of the Transportation & Logistics Practice Group, told UPI.
"The challenge from the very beginning has always been a volume-based challenge, assuming that the federal government was indeed willing to issue refunds," Todd said. "On the other hand, the program was launched very swiftly. It wasn't until early March that we knew that there would indeed be an administrative process. So it looks like the government rose to the occasion."
Transportation & Logistics Practice Group is a law firm that assists importers and exporters in facilitating trade around the world, including ensuring compliance with regulations.
In the first week of the CAPE system being open for refund requests, Todd said most in the importing industry are "very pleased that we are at this moment."
"There was a great deal of time when uncertainty still remained in terms of whether there would be refunds and whether the White House would seek to litigate the availability of refunds, because the Supreme Court decision only spoke to the unlawfulness of IEEPA tariffs," Todd said. "Many people took a wait-and-see approach and there were a number of negative viewpoints, believing that maybe we would not approach this point."
As of yet, the Trump administration has not raised any further challenge to tariff refunds but Kevin Hassett, White House National Economic Council director, said in a Fox News interview that the administration may seek ways to lower the amount that must be refunded.
"There's alternative authorities that perhaps could reduce that number quite a bit," Hassett said.
"I'm not sure what Hassett was talking about," Oliver J. Dunford, senior attorney with the Pacific Legal Foundation, told UPI. "And as far as I can tell, there are no other legal issues out there."
Pacific Legal Foundation filed a friend-of-the-court brief to the U.S. Supreme Court in the Learning Resources, Inc. vs. Trump case.
Todd said the process for requesting a refund in the CAPE system is "very simple." Importers are still waiting to see how long it takes for their requests to be verified, starting the clock for refunds to be received.
"They are singular submissions that essentially list entry numbers in a file that is uploaded in the CAPE system," Todd said. "What remains is for the CBP systems to validate those entries and confirm that indeed IEEPA duties were paid on those amounts owed. Many expect compliance screening in general on those entries. The work is not complete yet but when it comes to standing up a system that can manage the administrative burden of adjudicating and issuing these refunds it appears like the government has met the challenge."
As the Court of International Trade ordered, the first phase of refunds encompasses liquidated entries and entries that have been liquidated within the last 80 days. Liquidated entries are entries into the system that have received a final determination by CBP on the duties, taxes and fees owed for being imported, making the import legally settled.
For imports that do not meet these criteria, Todd said companies are again in a wait-and-see position.
"The importing community is looking to see what phase two looks like, whether there will be additional phases," he said. "In particular there's a question about a finally liquidated entry, which is an entry that has been liquidated for which protest is no longer available. It remains an open question how those will be handled. In general, this is the first step of an administrative process and the importing community, at least based on my visibility, is very pleased that we're here."
This week in Washington
Britain's King Charles III delivers an address to a joint meeting of Congress at the U.S. Capitol on Tuesday. The king and Queen Camilla are on a four-day state visit to the U.S. with stops in Washington and New York. Photo by Bonnie Cash/UPI | License Photo