This update follows our March 3, 2026 publication, “The Supreme Court Strikes Down IEEPA Tariffs: Practical Implications and Next Steps,” which analyzed the Supreme Court’s landmark decision in Learning Resources, Inc. v. Trump holding that the IEEPA does not authorize the President to impose tariffs. Since that publication, the U.S. Court of International Trade has issued orders directing U.S. Customs and Border Protection to process refunds, and CBP has begun developing a new automated refund system. This update addresses those developments and provides practical guidance for importers seeking to recover IEEPA duties.
Key Takeaways
Following the Supreme Court’s ruling in Learning Resources, Inc. v. Trump that IEEPA-based tariffs are unlawful, the U.S. Court of International Trade (“CIT”) has ordered U.S. Customs and Border Protection (“CBP”) to liquidate or reliquidate all affected entries without assessing IEEPA duties. To administer refunds, CBP is developing a new system called the Consolidated Administration and Processing of Entries (“CAPE”) within its Automated Commercial Environment (“ACE”), though no component is fully built.
Even once fully operational, CAPE will have significant limitations. Entries for which liquidation has already become final are not covered and may require importers to file formal protests under 19 U.S.C. § 1514 within 180 days of liquidation to preserve their right to a refund. Additionally, CAPE’s first phase excludes entries subject to antidumping or countervailing duty orders, suspended or extended liquidations, warehouse withdrawals, and drawback claims, with no timeline announced for subsequent phases. Importers should act promptly to audit their entry portfolios, identify CAPE-eligible entries, and pursue alternative remedies where CAPE does not reach, as strict deadlines apply and CBP’s guidance continues to evolve.
Key Court Orders
On March 4, 2026, the CIT held a hearing in Atmus Filtration, Inc. v. United States and, following the Supreme Court’s ruling in Learning Resources, Inc. v. Trump that IEEPA-based tariffs are unlawful, ordered CBP to liquidate all unliquidated entries subject to those duties without assessing them. The CIT declared that all importers of record are entitled to benefit from the Supreme Court’s decision.
On March 20, 2026, the CIT issued an amended order expanding the scope of relief to include IEEPA duties on imports from Brazil and India, and directing CBP to reliquidate any liquidated entries for which liquidation is not yet final. The CIT noted that its March 19, 2026, closed conference failed to reach a resolution on reliquidation of entries for which liquidation has become final, and advised importers to be aware of the protest remedies available under 19 U.S.C. § 1514 (Protest against decisions of Customs Service). The CIT has suspended the requirement for immediate compliance while CBP builds out its new automated refund system, with the next progress report and settlement conference set for March 31, 2026.
What is CAPE?
As noted above, CBP is developing a new capability within its ACE, called CAPE, to administer IEEPA refunds. The system has four components:
A. Refunds for Importers of Record
A web-based portal through which importers and brokers submit “CAPE Declarations” — CSV files listing entry summary numbers for which they are requesting IEEPA refunds. ACE will run two rounds of validation: (1) file-level checks (required information, formatting, importer-of-record authorization, file integrity); and (2) entry-specific checks (confirming summaries exist in ACE and contain at least one IEEPA HTS Chapter 99 number). Submissions that fail file-level validation are rejected in their entirety; entries that fail entry-specific validation are removed while the remaining entries continue processing.
B. Mass Processing (45% complete)
The CAPE Mass Processing component automatically removes applicable IEEPA HTS numbers from validated entry summaries and recalculates duties as if IEEPA duties had never been declared. CBP is also building an event history tracking function to maintain an audit trail.
C. Review and Liquidation/Reliquidation (80% complete)
This component sets entries to liquidate or reliquidate for the entries identified in the accepted CAPE Declaration on a specified timeline, automatically calculates interest, and processes liquidations/reliquidations Monday through Thursday each week. CBP retains the ability to conduct manual reviews.
D. Refund (63% complete)
When entries reach their scheduled liquidation/reliquidation date, ACE directs them to a CAPE-specific refund process within the ACE Collections module, consolidating refunds by liquidation/reliquidation date and importer of record (or designated Form 4811 recipient) and sending them electronically to the designated bank account.
Unresolved Issues
While CAPE offers a standardized pathway for recovering IEEPA refunds, significant gaps and unresolved issues remain.
A. Excludes Entries Where Liquidation Has Become Final
The CIT’s March 20 order expressly noted that no resolution was reached regarding entries for which liquidation has already become final. Remedies for these entries may be available under 19 U.S.C. § 1514, but those remedies require affirmative filings subject to strict deadlines.
Importers of record may need to file a protest with CBP requesting a refund within 180 days of liquidation. This is a formal process to administratively contest CBP decisions related to imported merchandise and request refunds. Notably, since liquidation generally occurs 314 days after an imported good’s date of entry, and the earliest IEEPA-based tariffs are now undergoing liquidation. Once a protest has been filed, CBP cannot finalize a liquidation while the protest is pending.
B. CAPE Phase 1 Exclusions
Phase 1 of CAPE will not process entries subject to antidumping or countervailing duties, or entries for which the liquidation status in ACE is “Suspended,” “Extended,” or “Under Review,” and certain other entry types such as warehouse withdrawals, and entries designated on a drawback claim. CBP has not announced a timeline for subsequent phases that would cover these entries. Importers with complex portfolios that include any of these entry types need counsel to pursue alternative remedies.
C. CAPE Is Incomplete and Untested at Scale
No CAPE component is fully built. Mass Processing, the core engine of the system, is only 45% complete, and CBP has acknowledged that all components must go through “multiple rounds of critical testing before deployment to the live ACE environment.” How CAPE will perform in practice remains to be seen.
Further, CBP indicated that it still “evaluating any additional steps that may need to be taken to comply with the Paperwork Reduction Act,” which could delay CAPE’s rollout. Importers should act promptly to secure their refund rights. We recommend auditing entry portfolios to identify CAPE-eligible entries, filing protests for entries where liquidation has become final or is nearing the 180-day deadline, and monitoring CBP’s evolving guidance as the CAPE system is built and tested. Given the strict statutory deadlines and the exclusions in CAPE Phase 1, a wait-and-see approach risks forfeiting recovery.
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For a printable version of this post, please click here. We will continue to monitor developments and provide updates as the CIT and CBP finalize the refund process. Please contact us if you have questions about your specific situation or need assistance pursuing IEEPA refunds so that we may be able to assist in navigating the complex and changing landscape.
