CIT Stays The Course On IEEPA Refund Litigation As CBP Prepares To Launch Administrative Process

On April 14, the Court of International Trade (“CIT”) issued another order in Euro-Notions Florida, Inc. v. CBP regarding International Emergency Economic Powers Act (“IEEPA”) tariff refunds. The CIT’s order followed another closed conference regarding the U.S. Customs and Border Protection’s (“CBP”) fourth declaration concerning its progress on developing an administrative refund process known as the Consolidated Administration and Processing of Entries (“CAPE”). CBP’s declaration provides updated development progress for each CAPE Phase 1 component (summarized in the table below), reports a large increase in importers of record that have registered to receive electronic refunds, and explains considerations over issuing pre-liquidation refunds for entries for which liquidation is suspended due to antidumping and countervailing duty orders. The CIT ordered CBP to file another declaration concerning its progress in developing CAPE by April 28, after which another closed conference will follow. 
 
The CIT continues to insist on holding closed conferences, including by striking from the docket a letter from news agencies asking the CIT to open the conferences to the public due to a procedural error in the letter’s filing. Nevertheless, the CIT’s order reports that CBP confirmed at yesterday’s conference that it is “on track” to launch CAPE Phase 1 on April 20. CBP has published instructions and FAQs for importers to guide importers filing refund claims through CAPE (see here). Importers should also be aware of the limitations of CAPE Phase 1, which are summarized here. According to the CIT’s order, CBP’s instructions “do not limit the use of CAPE to those claimants who have commenced an action” at the CIT, though the language on CBP’s website is not explicit about this.
 
The CIT’s order further discloses the following: “Importers should be aware that, by voluntarily using CAPE, any IEEPA cash deposits will be available to offset amounts owed with respect to other duties. Customs will provide a method for identifying entries for which an adjustment has been made.” It is not clear what this means. It may be that CBP will offset other duties owed on the same entries (such as antidumping or countervailing duties) to the extent it is determined additional duties are owed at liquidation. It should not mean that CBP will use IEEPA tariff cash deposits to offset duties owed on other entries, such as Section 122 duties that are currently in place. Those duties apply only to entries that post-date the Supreme Court’s decision in Learning Resources v. Trump, meaning there should be no overlap between entries subject to IEEPA tariffs and entries subject to Section 122 tariffs (which are also currently being challenged at the CIT).
 
Nevertheless, importers should be aware that “by voluntarily using CAPE, any IEEPA cash deposits will be available to offset amounts owed with respect to other duties.” As before, the CIT’s course for litigating IEEPA tariff refunds leaves much uncertainty, including the possibility that the Government will appeal the CIT’s orders at any time. Thus, filing an action at the CIT remains the surest way to preserve importers’ rights to refunds.
 

Component              1st Report                2nd Report              3rd Report               4th Report

Claim Portal              70%                             73%                            85%                             95%

Mass Processing       40%                             45%                             60%*                           85%*

Review &

Liquidation/               80%                             80%                            80%                             90%

Reliquidation

Refund                       60%                             63%                             75%                            90%

See limitations on CAPE Phase 1 Mass Processing here.