Barnes & Thornburg | IEEPA Tariff Refunds: Critical Developments, Phase III Delays, and Action Steps for Importers

• IEEPA refunds are being processed under CAPE Phases I and II, but CAPE Phase III is temporarily delayed. CBP announced that it will begin to issue refunds for finally liquidated entries under CAPE Phase III, but only for importers that have filed a lawsuit at the Court of International Trade (CIT).
• Non-litigating importers with finally liquidated entries may face the greatest exposure. If the Federal Circuit sides with the Department of Justice on the universal refund order appeal, only importers who have independently filed CIT lawsuits may be able to recover.
• Importers should be proactive. Relying on pending class-certification or appellate outcomes to preserve claims may carry significant risk. Filing deadlines under the CIT’s residual jurisdiction (19 U.S.C. § 1581(i)) are as early as February 2027 for some entries. 

As discussed in prior client alerts, the Supreme Court struck down the International Emergency Economic Powers Act (IEEPA) tariffs, United States Customs and Border Protection (CBP) launched its Consolidated Administration and Processing of Entries (CAPE) refund system, and refunds began flowing. Recent developments have added complications and urgency for importers, including the CAPE Phase III delay and pending Federal Circuit appeal.

CAPE Refund Progress and Phase II Launch

As previously reported, CAPE Phase I covers only unliquidated and non-finally liquidated entries. On June 29, CBP launched CAPE Phase II, extending the system to entries flagged for reconciliation for which no reconciliation entry has been filed. Type 9 entries (i.e., those for which a reconciliation entry has been filed) are not eligible for Phase II and have been deferred to a later phase.

Entries subject to both antidumping/countervailing duty (AD/CVD) orders and IEEPA duties remain excluded from CAPE. CBP has not confirmed when those overlapping entries will be addressed.

Approximately $1.7 billion in refunds remains stalled because the relevant importers have not registered ACH payment information with CBP.

CAPE Phase III Delayed

CBP announced that CAPE Phase III will cover finally liquidated entries (e.g., entries liquidated for longer than 80 days and therefore ineligible for Phase I) — but only for importers who have filed lawsuits at the CIT.

CBP maintains that it lacks authority to reliquidate finally liquidated entries absent a specific court order for the importer. CIT Judge Eaton has begun issuing court orders in individual IEEPA cases directing CBP to reliquidate, without regard to IEEPA duties, any and all of the plaintiff’s entries that have been liquidated for more than 80 days, thereby resolving CBP’s concern. CBP intends to add a “Phase III” functionality to CAPE to allow importers that have received an order from the CIT to file claims for finally liquidated entries.

On Aug. 25, CBP confirmed that CAPE Phase III is temporarily delayed while it builds new validations. No revised launch date has been announced.

No other confirmed process currently exists for importers to obtain refunds of IEEPA duties for finally liquidated entries, which has created a sense of urgency for some importers to file suit at the CIT. However, as discussed below, other litigation is ongoing that may negate any need to file in the CIT.

Class Certification Proceedings

On Aug. 6, the CIT heard oral argument on the Liberty Justice Center’s motion to certify a nationwide class under Rule 23(b)(2) in V.O.S. Selections, Inc. v. United States. The motion seeks to enable importers to recover IEEPA tariff refunds on finally liquidated entries without requiring each importer to file an individual lawsuit.

The CIT has not issued a ruling to date. If certified, the class could enable non-litigating importers to access refunds on finally liquidated entries. However, the government is expected to appeal any favorable certification ruling to the federal circuit, and final resolution may not occur before the end of 2026.

Federal Circuit Appeal

The Department of Justice’s appeal of the CIT’s original universal refund order remains pending before the U.S. Court of Appeals for the Federal Circuit. In its opening brief, DOJ argues that:

• The CIT exceeded its authority by ordering universal relief for non-plaintiffs, citing the Supreme Court’s decision in Trump v. CASA, Inc., 606 U.S. 831 (2025); and
• CBP lacks statutory authority to reliquidate finally liquidated entries without an importer-specific court order.

The outcome could materially affect whether non-litigating importers receive refunds on finally liquidated entries. If the government prevails, only importers who have independently filed CIT lawsuits may be entitled to Phase III refunds.

Considerations for Importers

Importers should consider the following actions, depending upon the status and value of their entries, as well as their risk tolerance:

For Importers with Unliquidated or Recently Liquidated Entries

If your entries are eligible under CAPE Phases I or II, the refund process is functioning; over $106 billion has already been sent to Treasury. Importers should:

• Ensure CAPE declarations are submitted for all eligible entries, directly or through your customs broker.
• Confirm ACH enrollment. Refunds cannot be issued without valid ACH details on file.

For Importers with Finally Liquidated Entries

This presents the greatest risk. For importers that have not filed suit, no confirmed administrative or judicial mechanism currently exists to recover refunds on finally liquidated entries. Importers may consider:

• Filing suit at the CIT under its residual jurisdiction (28 U.S.C. § 1581(i)) to qualify for Phase III and obtain a court order directing reliquidation.
• Wait for class certification in V.O.S. Selections — but timing and outcome are uncertain, and the government will almost certainly appeal any favorable ruling.
• Wait for the federal circuit to resolve the government’s appeal of the universal refund order — but if the government prevails, non-litigating importers may be permanently barred from recovery.

Timing Considerations

Importers should account for the two-year window from the date of entry to file a residual-jurisdiction action under Section 1581(i) at the CIT. The deadline may vary by entry – for example, entries made on April 5, 2025, would have a filing deadline of April 5, 2027, whereas later entries would have deadlines later in 2027 and 2028. Importers can check their ACE accounts or consult with their brokers on relevant entry dates and evaluate their situation with counsel rather than assume pending class-certification or appellate proceedings will preserve every claim.

Importers may consider filing a protest with CBP within 180 days of liquidation for any liquidated entries. Entries subject to open protests are not specifically contemplated in the CIT’s orders, although CIT Judge Eaton indicates that CBP is considering additional CAPE functionality to process them. Currently, CBP is not processing CAPE claims for entries on which a protest has been filed. Importers should confer with counsel about whether protests are necessary or advisable.