Summary: Customs and Border Protection (CBP) has expanded CAPE Phase 1, allowing more importers to submit IEEPA tariff refund claims. While this creates a clearer path to recovery, refunds remain tied to liquidation timelines, and key exclusions and delays still apply. Businesses should act now to identify eligible entries, prepare submissions, and manage expectations around timing and compliance requirements.
Recent developments from U.S. Customs and Border Protection (CBP) mark a step forward in the process for refunding tariffs imposed under the International Emergency Economic Powers Act (IEEPA). With the expansion of CAPE Phase 1, more importers now have a defined pathway to seek relief, but important limitations and timing considerations remain.
For businesses that have absorbed the financial impact of these tariffs, this update signals progress. However, it also introduces new procedural steps that will directly affect how and when refunds are realized.
What changed in the IEEPA tariffs refund process?
CBP has expanded the score of entries eligible for submission through the Claims and Appeals Processing Engine (CAPE) under Phase 1 of the refund process. Importers can now submit declarations for entries marked suspended, extended, or under review.
For validated entries, CBP will remove the HTS code tied to IEEPA duties; recalculate duties without those charges; and move the entry through the standard liquidation process. This expansion provides more businesses with access to the refund process and reflects continued progress toward a broader solution.
CBP has also shared updates on system development:
- The claim portal is now approximately 85% complete
- Mass processing is nearly 60% complete
- Review and liquidation processes are about 80% complete
- Refund processing is almost 75% complete
While these updates indicate forward momentum, the full process is still being finalized. The expansion may signal that CBP is prioritizing scalability, but the uneven progress across system components suggests that execution risk remains. Businesses should be prepared for inconsistencies in processing timeline, particularly as volume increases.
How does the CAPE process impact refund timing?
The expanded CAPE process improves access, but it does not accelerate refunds in the way some might expect. Instead, refunds follow a multi-step process:
- Importers submit eligible entries through CAPE
- CBP validates and adjusts the entry
- The entry is liquidated in the normal course
- Refunds are issued upon liquidation
This means refund timing is tied to liquidation cycles rather than submission date.
CBP has indicated that it may take up to 45 days after accepting a CAPE declaration to review and liquidate validated entries, assuming no additional compliance review is required.
For businesses, this could introduce a gap between submission and cash recovery that must be accounted for in financial planning. The timing structure creates a critical working capital consideration. Companies with significant exposure to IEEPA duties should evaluate how delayed refunds impact liquidity, borrowing needs, and forecasting accuracy. In some cases, this may influence broader supply chain or sourcing decisions.
What challenges and limitations remain?
Despite progress, several factors continue to complicate the refund process.
Entries involving AD/CVD
Entries subject to antidumping (AD) or countervailing duties (CVD) may face delays because liquidation may remain suspended, or because CBP must wait for guidance from the U.S. Department of Commerce, or timelines for refund processing are less predictable.
Excluded entries
Certain entities remain outside the scope of Phase 1, including: drawback entries, reconciliation entries, entries covered by an open protest, and certain AD/CVD entries. These exclusions mean some businesses will need to wait for future phases or additional guidance.
Ongoing system development
Although CBP has made meaningful progress, the system is not fully operational. Key elements, including mass processing and the claim portal, are still under development. As a result, businesses should expect continued updates and potential procedural changes as implementation evolves.
The biggest risk at the moment is not ineligibility, but incomplete visibility. Many organizations do not have a centralized view of affected entries, statuses, or documentation readiness. Without that foundation, even eligible refunds may be delayed or missed entirely.
What should importers do now?
With the process advancing, businesses should consider taking proactive steps to prepare for what’s ahead.
- Identify eligible entries: Review historical entries subject to IEEPA duties and determine which fall within the expanded Phase 1 criteria.
- Confirm entry status: Validate whether entries are suspended, extended, or under review, and flag those involving AD/CVD for additional monitoring.
- Prepare CAPE submissions: Ensure all documentation is complete and HTS classifications and duty calculations are accurate.
- Plan for timing impacts: Incorporate potential delays into cash flow planning and set realistic expectations internally regarding refund timing.
- Monitor ongoing updates: Stay informed as CBP releases additional guidance and expands eligibility in future phases.
Beyond compliance, businesses can take a strategic approach to recovery by evaluating whether internal processes can support high-volume submissions; how to prioritize entries based on refund value; and seeking opportunities to align tariff recovery with broader tax and supply chain strategies.
Final thoughts: IEEPA tariff refund outlook
This is the most significant development on IEEPA tariff refunds since the U.S. Supreme Court ruling on IEEPA tariffs. However, the path to repayment is not settled. An appeal is possible, and CBP’s operational approach, along with the level of enforcement scrutiny, will shape both timing and outcomes.
A window for preparation is open now, but may not remain so. As processes mature and scrutiny increases, the burden may shift toward documentation, quality, accuracy, and defensibility. Businesses that move early to organize data, validate entries, and align internal stakeholders will be better positioned not only to recover funds, but to do so efficiently and with minimal disruption.
